Add-ins EQUITY & LIABILITIES Capital & Reserves Share Capital ($1 Ord Shares) 220,000 200,000 Share Premium 15,000 15,000 General Reserves 37,000 47,000 Retained Earnings 121,000 393,000 257,000 519,000 Non-Current Liabilities 10% Debenture 202,000 47,000 Current Liabilities Creditors Bank overdraft Tax Rayable Dividends 17,000 24,000 6,000 14,000 20,000 10,000 41,000 21,000 71.000 636,000 637,000 MARCH 31 CONDENSED INCOME STATEMENT 2017 $ Sales 1055,000 Gross Profit 750,000 Profit before Tax 245,000 Tax (61.250) Profit After Tax for Quarter 183,750 Dividends $34000 Reserves Transfer $10,000 During the month of March, TBL signed contracts with some of its customers to supply toys of 300 or more per month. The contract with the supermarket chain allows a credit period of 60 days compared with 30 days for all other customers. Phillip believes that he needs to conduct extensive analytic procedures on accounts payable, receivables, and revenue for March because of the new contract. He obtained the financial statements and transactions for March to conduct the analysis. The materiality level for the income statement account is $15,000 and tolerable error as a percentage of the materiality level is 50%. Based on Phillip's extensive knowledge of the client, he believes that the internal control systems established by management have been deteriorating as there have been several changes to key management personnel during the period under review. The company's controller resigned in March so Phillip knows that he will have to conduct an extensive trend analysis for March. Requirements: Conduct of review of the interim financial statements (i) Prepare an engagement letter for the interim financial statements (5%) Prepare an audit plan (15%) Prepare internal controls and risk assessment questionnaires (5%) Focus ENC + 50% 9:44 PM