Creator is the principal owner of ABC Company, a medium-sized company that sells office equipment to an office supply Company that operates in the Midwest. Recently, creator received an anonymous tip that financial statements of ABC for the most recent years, 2012, were fraudulent. Creator has contacted you, a forensic accountant, to perform an analysis of the company as a starting point of an investigation. You have organized the information into the following table.

ABC CompanyVertical Analy sis Horizontal AnalysisBalance Sheet Year 2011 Year 2012 Change Elements Amount % % Amount Amount % $ $Cash 1,035,263 643,258Accounts receivable (net) 5,738,932 8,532,970Inventory 9,250,164 8,432,581Plant and equipment (net0 12,593,298 12,789,315Total assets 28,617,657 30,398,124Accounts payable 739,582 738,431Non-current debt 1,075,213 985,234Common stock 400,000 400,000Paid-in capital 953,621 953,621Retained earnings 25,449,241 27,320,838Total liability & equity 28,617,657 30,398,124Net sales 16,358,172 20,951,359Cost of goods sold 9,814,903 9,179,156Gross profit 6,543,269 11,772,203Selling expenses 1,938,251 2,539,487Administrative expenses 2,583,421 3,062,512Net income 2,021,597 6,170,204

Required:

1. Complete the above table.
2. What areas, if any, appear to deserve closer examination?
3. For any areas identified in (b), name two procedures that you could perform to determine whether the area is misstated.