Assume that all the steps of the inventory audit program were done and the misstatements were only found in the machinery account, AC# 200-101.
Inventory Lead Sheet
Account name and Number Unadjusted Adjusted
Balance Adjustments Balance
200-101 Inventory _ Machines $9,634,800 ?? ??
200-102 Inventory _ Parts $3,028,080 0.0 ??
200-103 Inventory _ Supplies $1,101,120 0.0 ??
Total ?? ?? ??
| Conclusions: The inventory account is ????? (fairly on NOT fairly stated) [Hint: calculate the projected misstatement in WP 30-15 and see if it is material] |
Results of Inventory Valuation Tests
Summary of Misstatements:
| Item # | Recorded Value | Lower cost or Replacement | Amount of misstatement - over (under) | Notes |
| 150-201 [Machines] | $218,520 | $216,620 | $1,900 | |
| 151-520 [Machines] | $150,000 | $150,860 | ($860) | Shipping cost was not included |
| 151-620 [Machines] | $180,300 | $179,000 | $1,300 | |
| | | | | |
| Net Misstatement in the sample | | | $2,340 | |
Recorded amount of inventory is $13,764,000
Sample size is $4,300,000
The projected misstatement is $???
Adjusting Entries Inventory
($ thousands) 12/31/20 12/31/19 12/31/18 21/31/2017 ASSETS Cash & Equivalents Net Receivables Inventories Prepaid Expenses Other Current Assets 24991 26388 13764 0 12864 29514 25606 13642 0 14908 30240 22813 14039 0 14409 28096 14439 14714 0 12747 Total Current Assets Gross Plant Property & Equipment Accumulated Depreciation 78007 63750 12349 83670 44078 9275 81501 36679 7429 69996 31662 5817 Net Plant Property & Equipment Investments at Equity Other Investments Intangibles Deferred Charges Other Assets 51401 9201 18500 5947 0 31464 34803 8350 16006 6410 0 28438 29250 8094 14354 7228 0 25917 25845 6883 6954 8782 0 30962 194520 177677 166344 149422 0 TOTAL ASSETS LIABILITIES Long Term Debt Due In One Year Notes Payable Accounts Payable Taxes Payable Accrued Expenses Other Current Liabilities 0 19562 24062 0 5865 21977 14988 22529 0 5726 22458 0 14158 23621 0 4844 19789 4629 889 25166 0 5063 18245 Total Current Liabilities Long Term Debt Deferred Taxes Investment Tax Credit Other Liabilities 71466 43549 0 0 39182 65701 31853 0 62412 22025 0 0 38733 53992 10532 603 0 47295 0 44099 154197 141653 0 123170 0 112422 0 0 TOTAL LIABILITES Redeemable Noncontrolling Int. EQUITY Preferred Stock - Redeemable Preferred Stock - Nonredeemable 0 0 0 0 3109 0 10391 O 0 Total Preferred Stock Common Stock Capital Surplus Retained Earnings Less: Treasury Stock 15 27607 12249 0 0 16 28937 6504 o 3109 15 28780 10703 0 10391 14 23834 2005 0 Common Equity 39871 35457 39498 25853 Stockholder's Equity- Parent Nonredeemable Noncontrolling Int. 39871 452 35457 567 42607 567 36244 756 40323 36024 43174 37000 Stockholder's Equity-Total TOTAL LIABILITIES & EQUITY COMMON SHARES OUTSTANDING 194520 1500 177677 1600 166344 1500 149422 1366.374 ($ thousands) 12/31/20 12/31/19 12/31/18 21/31/2017 ASSETS Cash & Equivalents Net Receivables Inventories Prepaid Expenses Other Current Assets 24991 26388 13764 0 12864 29514 25606 13642 0 14908 30240 22813 14039 0 14409 28096 14439 14714 0 12747 Total Current Assets Gross Plant Property & Equipment Accumulated Depreciation 78007 63750 12349 83670 44078 9275 81501 36679 7429 69996 31662 5817 Net Plant Property & Equipment Investments at Equity Other Investments Intangibles Deferred Charges Other Assets 51401 9201 18500 5947 0 31464 34803 8350 16006 6410 0 28438 29250 8094 14354 7228 0 25917 25845 6883 6954 8782 0 30962 194520 177677 166344 149422 0 TOTAL ASSETS LIABILITIES Long Term Debt Due In One Year Notes Payable Accounts Payable Taxes Payable Accrued Expenses Other Current Liabilities 0 19562 24062 0 5865 21977 14988 22529 0 5726 22458 0 14158 23621 0 4844 19789 4629 889 25166 0 5063 18245 Total Current Liabilities Long Term Debt Deferred Taxes Investment Tax Credit Other Liabilities 71466 43549 0 0 39182 65701 31853 0 62412 22025 0 0 38733 53992 10532 603 0 47295 0 44099 154197 141653 0 123170 0 112422 0 0 TOTAL LIABILITES Redeemable Noncontrolling Int. EQUITY Preferred Stock - Redeemable Preferred Stock - Nonredeemable 0 0 0 0 3109 0 10391 O 0 Total Preferred Stock Common Stock Capital Surplus Retained Earnings Less: Treasury Stock 15 27607 12249 0 0 16 28937 6504 o 3109 15 28780 10703 0 10391 14 23834 2005 0 Common Equity 39871 35457 39498 25853 Stockholder's Equity- Parent Nonredeemable Noncontrolling Int. 39871 452 35457 567 42607 567 36244 756 40323 36024 43174 37000 Stockholder's Equity-Total TOTAL LIABILITIES & EQUITY COMMON SHARES OUTSTANDING 194520 1500 177677 1600 166344 1500 149422 1366.374
