Comparative income statement information for Uden Supply Company is presented in the below table. Reculred: b. Determine the expected amounts for 20x4 for each of the income statement items. (Pound gross proft ratlo and Income toxes retlo to neerest four declmal pleces. Round other ratlos to neerest two declmal places. Round all other Intermediete computations to the nearest whole value. Enter your onswers in thousands.) c. Uden's unaudited financial statements for the current year show a 31 peicent gross profit rate. Assuming that this represents a misstatement from the amount that you developed as an expectation, calculate the estimated effect of this misstatement on net income before taxes for 204. (Enter your enswers in thousends.) Martyn Terrill is the senior auditor for the audit of Uden Supply Company for the year ended December 31,20x4. In planning the audit Marilyn is attempting to develop expectations for planning analytical procedures based on the financial information for prior years and her knowledge of the business and the industry, including these: 1. Based on economic conditions, she believes that the increase in sales for the current year should aporoximate the historicat trend in terms of actual dolas increases. 2 Based on her knowledge of industry trends, she believes that the gross profit percentage for 204 should be about 2 percent less than the percentage for 203 3. Based on her knowiedge of regugtions. she is awate that the effective tax rate for the company for 204 has been reduced by 5 percent from that in 203 4. Based on her knowiedge of economic concitions she is avare that the effective interest rate on the company's line of credit for 204 was approximately 12 percent Tine average outstanding balance of the fine of credit is $2300.000. This line of credit is the cormpany's only interest-bearing debt. 5. Bused on her discussions whth managertent and herknovedge of the industry, she oelleves that the amount of other expenses should be consistent with the trends from pror years. Comperative ncome stotement nforngton for Gden 5 foply Compdey is preseated in the beiow table Required: b. Determine the expected dmounts for 204 focedch of the income statement tems. (Round uros p oroflt rotio and Incorme taxes retio to nesrest four declmal ploces. Round other ratios to neareat two declmol places. Round all other intermediate comoutatlons to the neerest whole volue. Enter your enswers in thousends.) Requlred: b. Determine the expected amounts for 204 for each of the income statement items. (Round gross proft ratio ond income taxes ratio to nearest four decimal places. Round other ratios to nearest two declmal places. Round all other intermedlate computatlons to the nearest whole value. Enter your answers in thousands.) c. Uden's unaudited financial statements for the current year show a 31 percent gross profit rate. Assuming that this represents a misstatement from the amount that you developed as an expectation, calculate the estimated effect of this misstatement on net income before taxes for 204. (Enter your answers In thousends.)
