Analysis Problems AP11.1 (LO 1, 2) Basic Understanding the entity and its environment Your client is a regional motel chain. It owns 27 properties in your region and manages another 40 properties for absentee owners. All the motels are located on interstate highways and achieve at least 60% of capacity on a regular basis. In the past, many motels have been fully booked during the summer travel season; however, the economy has taken a turn for the worse and people are traveling less. Required Explain how your knowledge of the business and industry would impact your audit of total revenues and accounts receivable for the client. AP11.2 (LO 2) Moderate Analytical procedures The following data was taken from the production and accounting records for Casuccio Manufacturing, Inc. Unaudited Audited Audited 2023 2022 2021 Operating Data Capacity in units 450,000 450,000 450,000 Production in units 450,000 400,000 300,000 Inventory in units 32,000 28,000 21,000 Financial Data ($000) Total revenues $ 35,200 $ 27,500 $ 21,200 Total assets $ 23,000 $ 19,500 $ 15,700 Accounts receivable, net $ 5,900 $ 4,300 $ 3,900 Bad debt expense $ 175 $ 135 Accounts receivable written off $ 165 $ 125 $ 100 Required a. Calculate the following ratios for 2023, 2022, and 2021: 1. Sales to total assets. 2. Sales to production. 3. Revenue per unit sold. 4. Accounts receivable growth to sales growth. 5. Uncollectible accounts expense to net credit sales. 6. Uncollectible accounts expense to accounts receivable written off. 7. Accounts receivable turnover in days. 1. Describe the implications of the resulting ratios for the auditor's audit strategy for the year 2023. 2. What specific assertions are likely to be misstated? 3. How should the auditor respond in terms of potential audit tests? 105