compute an independent estimation of the accrued product warranty liability as of December 31, 2012. since this figure will be an estimate, a audit document to indicate exactly how the estimation was derived. Also, indicate whether or not the $45,465 figure reported for accrued product warranty is reasonable. (Hint: Remember the matching and the periodicity accounting principles)

SUMMARY OF PRODUCT WARRANTY EXPENSE (Prepared by Clicun) SUMMARY O January 2011 dirough December 2012 January February March April May June July August September October November December January February March April May June 2011 2011 2011 2011 2011 201 1 2011 201 1 2011 2011 2011 201 2012 2012 2012 2012 2012 2012 Sales for Month 1,064,000 632,000 718,000 958 000 972,00D 825,000 742,000 920.000 684,DDO 1,086,090 1,172,00D 1,600,000 1,221,000 762,000 692.000 1,114,000 1,180,000 818,090 Remrs During Month: From - Current Month Sales 386 274 354 444 254 122 517 568 420 584 1,010 846 872 468 842 736 - 1 Month Old Sales 890 1,066 776 658 736 1,028 652 126 994 1,118 1,168 1,126 1,896 1,938 732 702 1,340 1,472 - 2. Month Old Sales 1,198 1,386 1,674 638 962 960 1,250 858 1,138 924 1.258 1,332 1,314 1,770 1,722 794 820 1,532 -3 Month Old Sales 1,110 846 2,574 1,750 1.324 1,316 1,182 882 1,594 1,082 1.276 1,328 1,834 1.690 2.148 1,830 1,160 1,054 - 4 Month Old Sales 1,140 1,816 1,972 2,378 686 640 912 1 404 2,058 1,470 1,024 1,208 1,188 1,250 1,596 2,402 2,046 1,098 - 9 Month Old Sale 656 578 1,526 2 042 1.584 1,142 410 456 1.624 1,396 980 912 1350 1,398 1.000 1,314 2.020 1,616 - 6 Month Old Sales 646 670 506 370 422 890 914 502 404 1,034 440 544 398 782 280 1,166 1,408 1,390 Total Return During Month 6.076 6.036 9 382 6.010 6.098 5.732 5.196 8.232 Z460 5.626 9.500 7.046 5.878 9.636 8.898 Audit Objectives: Scope: Audit Procedures: Comments: Audit Conclusion:Exhibit 12-1 (Cont.) Lakeside Company SUMMARY OF PRODUCT WARRANTY EXPENSE (Prepared by Client) January 2011 through December 2012 May June July August September 2012 October 2012 November 2012 2012 December 2012 2012 2012 2012 1,180,000 818,000 844,000 1,100,000 1,022,000 1,205,000 1,284,000 1,748,000 842 736 1, 198 502 554 1,340 1,472 440 846 884 674 1,008 1,504 820 1,532 1,476 1,368 1,538 1,032 1,570 1,160 750 1,054 2,406 2,108 1,660 1,894 1,868 2,046 1,328 1,098 1,498 584 1,704 1,436 1,752 2,020 1,788 1,616 1,254 1,038 1,648 936 1,204 1, 150 1,408 1,390 1,998 970 1, 106 610 1,048 1,288 1,340 1, 158 1,032 9.636 8.898 8.150 Z.084 8.362 10.412 9.660 9.482