Apollo Shoes Fluctuation Review: Using the Apollo Shoes Fluctuation spreadsheet and the Apollo Shoes Ratios, please prepare a one-page summary. (1/4 of a page): Facts: My audit supervisor assigned me to perform a fluctuation and ration review of Apollo Shoes financial statement accounts. Issues: Based on our class discussion, I identified and give business reasons for the following: Significant Account: Ratio Fluctuation: Recommendations: I recommend that based on the information presented above be used in the audit planning process for Apollo Shoes. Needed information: E F G H C 2016 Debit D 2016 Credit 2017 Credit Amt S Change Debit Amt 4 $1,987.28 S198,116.52 $0.00 $3,044,958.13 $16,410,902.71 $0.00 2017 Debit Amt $2,275.23 $557,125.92 0 $3,645,599.15 $51,515,259.98 $1,250,000.00 $287.95 $359,009.40 $0.00 $600,641.02 $35.104,357.27 $1,250,000.00 $ Change %Change %Change Credit Amt Debit Amt Credit Amt 0 14% #DIV/0! 0 181% #DIV/0! o #DIV/0! #DIV/0! 0 20% #DIV/0! 0 214% #DIV/0! O #DIV/0! #DIV/0! $1,262,819.88 9 s 1,239,009.75 $18,825,205.24 $0.00 $48,899,322.26 10 $67,724,527.50 -23810.13 #DIV/0! -2% 0 260% #DIV/0! $3,012,000.00 $ 846,000.00 $3,424,213.78 11 12 13 14 15 16 17 $743,314.38 $200,000.00 $7,406.82 $8,540.00 $0.00 $2,680,899.40 ($200,000.00) $1,133.18 $0.00 $0.00 $0.00 -2166000 #DIV/0! -72% 0 361% #DIV/0! 0 -100% #DIV/0! 0 15% #DIV/0! O #DIV/0! #DIV/0! O #DIV/0! #DIV/0! 0 0% #DIV/0! $117,000.00 $117,000.00 Account ID Account Description 10100 Cash on Hand 10200 Regular Checking Account 10300 Payroll Checking Account 10400 Savings Account 11000 Accounts Receivable 11400 Other Receivables Allowance for Doubtful 11500 Accounts 12000 Inventory - Spotlight 12300 Reserve for Inventory Obsolescence 14100 Prepaid Insurance 14200 Prepaid Rent 14300 Office Supplies 14400 Notes Receivable-Current 14700 Other Current Assets 15000 Land 15100 Buildings and Land Improvements 15200 Machinery, Equipment, Office Furniture 17000 Accum. Depreciation 19000 Investments 19900 Other Noncurrent Assets 20000 Accounts Payable 23100 Sales Tax Payable 23200 Wages Payable 23300 FICA Employee Withholding 23350 Medicare Withholding 23400 Federal Payroll Taxes Payable 23500 FUTA Tax Payable 23600 State Payroll Taxes Payable 23700 SUTA Tax Payable 23800 FICA Employer Withholding 23900 Medicare Employer Withholding $623,905.92 $674,313.92 18 $50,408.00 0 8% #DIV/0! $433,217.10 $2,929,097.13 19 S163,500.00 $609,500.00 $572,691.08 $53,840.59 $1,998,780.39 $53,840.59 $1,922,095.91 20 21 22 23 24 25 26 27 28 29 30 31 32 $4,633,118.09 $0.00 $29,470.32 $1,318.69 S583.99 $6,033.01 $2,495,880,03 0 576% #DIV/0! $0.00 446000 #DIV/0! 273% $1,426,089.31 0 249% #DIV/0! $0.00 0 0% #DIV/0! $0.00 -2711022.18 #DIV/0! -59% $0.00 0 #DIV/0! WDIV/0! $0.00 -29470.32 #DIV/0! - 100% $0.00 7120.96WDIV/0! 540% $0.00 10831 #DIV/0! 1855% $0.00 112053.11 #DIV/0! 1857% $0.00 O #DIV/0! #DIV/0! $0.00 52291.39 #DIV/0! 1857% $0.00 O NDIV/0! #DIV/0! $0.00 7120.96 #DIV/0! 540% $8,439.65 $11,414.99 $118,086.12 $2,815.47 $55,106.86 $1,318.69 58,439.65 $583.99 $ 33 34 11,414.99 S44,403,000.00 $0.00 $0.00 10831 #DIV/0! 34403000 #DIV/0! 1855% 344% 24100 Line of Credit $10,000,000.00 35 36 37 38 39 24200 Current Portion Long-Term Debt 24700 Other Current Liabilities 27000 Notes Payable-Noncurrent 39003 Common Stock 39004 Paid-in Capital $0.00 $0.00 $0.00 $0.00 $0.00 #DIV/0! #DIV/0! O #DIV/0! #DIV/0! 12000000 NDIV/0! 0' #DIV/0! 0% O NDIV/0! 0% $12,000,000.00 $8,105,000.00 $7,423,000.00 NDIV/0! 58,105,000.00 $7,423,000.00 A B C F D 2016 E 2017 1 2016 2017 Debit Credit Debit Amt $2,219,620.65 $246,172,918.44 Credit Amt $6,590,983.64 $242,713,452.88 $4,497,583.20 $1,100,281.48 $11,100,220.89 $1,158,128.47 $0.00 S204,302.81 $1,426,089.31 $131,881.46 $2,166,000.00 Account ID Account Description 2 40 39005 Retained Earnings 41 40000 Sales 42 41000 Sales Returns 43 42000 Warranty Expense 44 45000 Income from Investments 45 46000 Interest Income 46 47000 Miscellaneous Income 47 50010 Cost of Goods Sold 48 57500 Freight 49 60000 Advertising Expense 50 61000 Auto Expenses 51 62000 Research and Development 52 64000 Depreciation Expense 53 64500 Warehouse Salaries 54 65000 Property Tax Expense 55 66000 Legal and Professional Expense 56 67000 Bad Debt Expense 57 68000 Insurance Expense 58 70000 Maintenance Expense 59 70100 Utilities 60 70110 Phone 61 70120 Postal 62 71000 Miscellaneous Office Expense 63 72000 Payroll Tax Exp 64 73000 Pension/Profit-Sharing Plan Ex 65 74000 Rent or Lease Expense 66 77500 Administrative Wages Expense 67 78000 Interest Expense 68 78500 Income Tax Expense - Federal 69 78510 Income Tax Expense - State 70 80000 Loss on Legal Settlement 71 $130,196,645.26 $4,240,263.09 $1,036,854.01 $210,502.80 $528,870.44 $446,000.00 $4,720,715.56 $99,332.45 $4,913,224.45 $141,569,221.61 $4,302,951.46 $897,140.01 $208,974.39 $31,212,334.17 $133,000.00 $4,633,383.82 $80,495.32 $3,605,133.96 $1,622,425.99 $853,942.65 $61,136.04 $135,642.99 $76,373.78 $128,033.21 $17,023.27 $1,550,989.06 $3,000,000.00 $2,603,485.87 $16,875,305.98 $875,000.00 $2,365,000.00 $429,000.00 $12.172.000.00 $283 238 404 03 H I $ Change $ Change %Change %Change Debit Amt Credit Amt Debit Amt Credit Amt $0.00 4371362.99 #DIV/0! 197% $0.00 -3459465.56 #DIV/0! -1% $6,602,637.69 0 147% #DIV/0! $57,846.99 0 5% #DIV/0! $0.00 1426089.31 #DIV/0! #DIV/0! $0.00 -72421.35 #DIV/0! -35% $0.00 2166000 #DIV/0! #DIV/0! ($11,372,576.35) 0 -8% #DIV/0! ($62,688.37) 0 -1% #DIV/0! $139,714.00 0 16% #DIV/0! $1,528.41 0 1% #DIV/0! ($30,683,463.73) 0 -98% #DIV/0! $313,000.00 0 235% #DIV/0! $87,331.74 0 2% #DIV/0! $18,837.13 0 23% #DIV/0! $1,308,090.49 0 36% #DIV/0! ($1,622,425.99) 0 - 100% #DIV/0! ($817,835.73) 0 -96% #DIV/0! ($25,633.17) 0 -42% #DIV/0! $1,689.19 0 1% #DIV/0! ($23,774.76) 0 -31% #DIV/0! ($50,229.60) 0 -39% #DIV/0! $7,868.55 0 46% #DIV/0! $26.822.79 0 2% #DIV/0! $300,000.00 0 10% #DIV/0! ($1,396,911.87) 0 -54% #DIV/0! ($678,080.55) 0 -4% #DIV/0! $1,716,736.50 0 6%#DIV/0! $6,535,000.00 0 6% #DIV/0! $2,671,000.00 0 623% #DIV/0! ($19,172,000.00) #VALUE! -100% #VALUE! $36, 106.92 $35,502.87 $137,332.18 $52,599.02 $77,803.61 $24,891.82 $1,577,811.85 $3,300,000.00 $1,206,574.00 $16,197,225.43 $2,591,736.50 $8,900,000.00 $3,100,000.00 S0.00 $283 238.404.03 $329 788 915 21 $329 788 915 21 Apollo Shoes Ratios Apollo Shoes, Inc. Selected Ratios 12/31/17 Audited 12/31/16 Unaudited 12/31/17 Percentage Change Ratios Current Ratio 2.40 2.71 13.05% Debt Ratio 0.40 0.45 11.86% Debt-Equity Ratio 0.66 0.81 21.41% Asset Turnover 6.54 1.76 -73.14% Liability Turnover 16.39 3.94 -75.98% Days Sales in Inventory 48.54 189.86 291.14% Days Sales in AR 24.90 81.59 227.69% 20,481,828.95 79,504,533.64 288.17% Apollo Shoes Fluctuation Review: Using the Apollo Shoes Fluctuation spreadsheet and the Apollo Shoes Ratios, please prepare a one-page summary. (1/4 of a page): Facts: My audit supervisor assigned me to perform a fluctuation and ration review of Apollo Shoes financial statement accounts. Issues: Based on our class discussion, I identified and give business reasons for the following: Significant Account: Ratio Fluctuation: Recommendations: I recommend that based on the information presented above be used in the audit planning process for Apollo Shoes. Needed information: E F G H C 2016 Debit D 2016 Credit 2017 Credit Amt S Change Debit Amt 4 $1,987.28 S198,116.52 $0.00 $3,044,958.13 $16,410,902.71 $0.00 2017 Debit Amt $2,275.23 $557,125.92 0 $3,645,599.15 $51,515,259.98 $1,250,000.00 $287.95 $359,009.40 $0.00 $600,641.02 $35.104,357.27 $1,250,000.00 $ Change %Change %Change Credit Amt Debit Amt Credit Amt 0 14% #DIV/0! 0 181% #DIV/0! o #DIV/0! #DIV/0! 0 20% #DIV/0! 0 214% #DIV/0! O #DIV/0! #DIV/0! $1,262,819.88 9 s 1,239,009.75 $18,825,205.24 $0.00 $48,899,322.26 10 $67,724,527.50 -23810.13 #DIV/0! -2% 0 260% #DIV/0! $3,012,000.00 $ 846,000.00 $3,424,213.78 11 12 13 14 15 16 17 $743,314.38 $200,000.00 $7,406.82 $8,540.00 $0.00 $2,680,899.40 ($200,000.00) $1,133.18 $0.00 $0.00 $0.00 -2166000 #DIV/0! -72% 0 361% #DIV/0! 0 -100% #DIV/0! 0 15% #DIV/0! O #DIV/0! #DIV/0! O #DIV/0! #DIV/0! 0 0% #DIV/0! $117,000.00 $117,000.00 Account ID Account Description 10100 Cash on Hand 10200 Regular Checking Account 10300 Payroll Checking Account 10400 Savings Account 11000 Accounts Receivable 11400 Other Receivables Allowance for Doubtful 11500 Accounts 12000 Inventory - Spotlight 12300 Reserve for Inventory Obsolescence 14100 Prepaid Insurance 14200 Prepaid Rent 14300 Office Supplies 14400 Notes Receivable-Current 14700 Other Current Assets 15000 Land 15100 Buildings and Land Improvements 15200 Machinery, Equipment, Office Furniture 17000 Accum. Depreciation 19000 Investments 19900 Other Noncurrent Assets 20000 Accounts Payable 23100 Sales Tax Payable 23200 Wages Payable 23300 FICA Employee Withholding 23350 Medicare Withholding 23400 Federal Payroll Taxes Payable 23500 FUTA Tax Payable 23600 State Payroll Taxes Payable 23700 SUTA Tax Payable 23800 FICA Employer Withholding 23900 Medicare Employer Withholding $623,905.92 $674,313.92 18 $50,408.00 0 8% #DIV/0! $433,217.10 $2,929,097.13 19 S163,500.00 $609,500.00 $572,691.08 $53,840.59 $1,998,780.39 $53,840.59 $1,922,095.91 20 21 22 23 24 25 26 27 28 29 30 31 32 $4,633,118.09 $0.00 $29,470.32 $1,318.69 S583.99 $6,033.01 $2,495,880,03 0 576% #DIV/0! $0.00 446000 #DIV/0! 273% $1,426,089.31 0 249% #DIV/0! $0.00 0 0% #DIV/0! $0.00 -2711022.18 #DIV/0! -59% $0.00 0 #DIV/0! WDIV/0! $0.00 -29470.32 #DIV/0! - 100% $0.00 7120.96WDIV/0! 540% $0.00 10831 #DIV/0! 1855% $0.00 112053.11 #DIV/0! 1857% $0.00 O #DIV/0! #DIV/0! $0.00 52291.39 #DIV/0! 1857% $0.00 O NDIV/0! #DIV/0! $0.00 7120.96 #DIV/0! 540% $8,439.65 $11,414.99 $118,086.12 $2,815.47 $55,106.86 $1,318.69 58,439.65 $583.99 $ 33 34 11,414.99 S44,403,000.00 $0.00 $0.00 10831 #DIV/0! 34403000 #DIV/0! 1855% 344% 24100 Line of Credit $10,000,000.00 35 36 37 38 39 24200 Current Portion Long-Term Debt 24700 Other Current Liabilities 27000 Notes Payable-Noncurrent 39003 Common Stock 39004 Paid-in Capital $0.00 $0.00 $0.00 $0.00 $0.00 #DIV/0! #DIV/0! O #DIV/0! #DIV/0! 12000000 NDIV/0! 0' #DIV/0! 0% O NDIV/0! 0% $12,000,000.00 $8,105,000.00 $7,423,000.00 NDIV/0! 58,105,000.00 $7,423,000.00 A B C F D 2016 E 2017 1 2016 2017 Debit Credit Debit Amt $2,219,620.65 $246,172,918.44 Credit Amt $6,590,983.64 $242,713,452.88 $4,497,583.20 $1,100,281.48 $11,100,220.89 $1,158,128.47 $0.00 S204,302.81 $1,426,089.31 $131,881.46 $2,166,000.00 Account ID Account Description 2 40 39005 Retained Earnings 41 40000 Sales 42 41000 Sales Returns 43 42000 Warranty Expense 44 45000 Income from Investments 45 46000 Interest Income 46 47000 Miscellaneous Income 47 50010 Cost of Goods Sold 48 57500 Freight 49 60000 Advertising Expense 50 61000 Auto Expenses 51 62000 Research and Development 52 64000 Depreciation Expense 53 64500 Warehouse Salaries 54 65000 Property Tax Expense 55 66000 Legal and Professional Expense 56 67000 Bad Debt Expense 57 68000 Insurance Expense 58 70000 Maintenance Expense 59 70100 Utilities 60 70110 Phone 61 70120 Postal 62 71000 Miscellaneous Office Expense 63 72000 Payroll Tax Exp 64 73000 Pension/Profit-Sharing Plan Ex 65 74000 Rent or Lease Expense 66 77500 Administrative Wages Expense 67 78000 Interest Expense 68 78500 Income Tax Expense - Federal 69 78510 Income Tax Expense - State 70 80000 Loss on Legal Settlement 71 $130,196,645.26 $4,240,263.09 $1,036,854.01 $210,502.80 $528,870.44 $446,000.00 $4,720,715.56 $99,332.45 $4,913,224.45 $141,569,221.61 $4,302,951.46 $897,140.01 $208,974.39 $31,212,334.17 $133,000.00 $4,633,383.82 $80,495.32 $3,605,133.96 $1,622,425.99 $853,942.65 $61,136.04 $135,642.99 $76,373.78 $128,033.21 $17,023.27 $1,550,989.06 $3,000,000.00 $2,603,485.87 $16,875,305.98 $875,000.00 $2,365,000.00 $429,000.00 $12.172.000.00 $283 238 404 03 H I $ Change $ Change %Change %Change Debit Amt Credit Amt Debit Amt Credit Amt $0.00 4371362.99 #DIV/0! 197% $0.00 -3459465.56 #DIV/0! -1% $6,602,637.69 0 147% #DIV/0! $57,846.99 0 5% #DIV/0! $0.00 1426089.31 #DIV/0! #DIV/0! $0.00 -72421.35 #DIV/0! -35% $0.00 2166000 #DIV/0! #DIV/0! ($11,372,576.35) 0 -8% #DIV/0! ($62,688.37) 0 -1% #DIV/0! $139,714.00 0 16% #DIV/0! $1,528.41 0 1% #DIV/0! ($30,683,463.73) 0 -98% #DIV/0! $313,000.00 0 235% #DIV/0! $87,331.74 0 2% #DIV/0! $18,837.13 0 23% #DIV/0! $1,308,090.49 0 36% #DIV/0! ($1,622,425.99) 0 - 100% #DIV/0! ($817,835.73) 0 -96% #DIV/0! ($25,633.17) 0 -42% #DIV/0! $1,689.19 0 1% #DIV/0! ($23,774.76) 0 -31% #DIV/0! ($50,229.60) 0 -39% #DIV/0! $7,868.55 0 46% #DIV/0! $26.822.79 0 2% #DIV/0! $300,000.00 0 10% #DIV/0! ($1,396,911.87) 0 -54% #DIV/0! ($678,080.55) 0 -4% #DIV/0! $1,716,736.50 0 6%#DIV/0! $6,535,000.00 0 6% #DIV/0! $2,671,000.00 0 623% #DIV/0! ($19,172,000.00) #VALUE! -100% #VALUE! $36, 106.92 $35,502.87 $137,332.18 $52,599.02 $77,803.61 $24,891.82 $1,577,811.85 $3,300,000.00 $1,206,574.00 $16,197,225.43 $2,591,736.50 $8,900,000.00 $3,100,000.00 S0.00 $283 238.404.03 $329 788 915 21 $329 788 915 21 Apollo Shoes Ratios Apollo Shoes, Inc. Selected Ratios 12/31/17 Audited 12/31/16 Unaudited 12/31/17 Percentage Change Ratios Current Ratio 2.40 2.71 13.05% Debt Ratio 0.40 0.45 11.86% Debt-Equity Ratio 0.66 0.81 21.41% Asset Turnover 6.54 1.76 -73.14% Liability Turnover 16.39 3.94 -75.98% Days Sales in Inventory 48.54 189.86 291.14% Days Sales in AR 24.90 81.59 227.69% 20,481,828.95 79,504,533.64 288.17%