For this assignment, you are engaged in the audit of Simon Corp, a new client. You are auditing the equity accounts for its first fiscal year ended, April 30, 20X1. Two files are included below. The first is the assignment information, and the second enter answers into excel where you will record your answers.

Assignment information

You are engaged in the audit of Simon Corp., a new client, at the close of its first fiscal year, April 30, 20X1. The accounts had been closed before the time you began your year-end fieldwork. You review the following stockholders equity accounts in the ledger: Other information in your working papers includes the following:

a. Simons articles of incorporation filed April 17, 20X0, authorized 100,000 shares of no par-value capital stock.

b. Directors minutes include the following resolutions:

4/18/X0 Established $50 per share stated value for capital stock.

4/30/X0 Authorized issue of 10,000 shares to an underwriting syndicate for $75 per share.

9/13/X0 Authorized acquisition of 1,000 shares from a dissident holder at $80 per share.

2/1/X1 Authorized reissue of 500 treasury shares at $85 per share.

4/28/X1 Declared 10% stock dividend, payable May 18, 20X1 to stockholders of record May 4, 20X1.

c. The following costs of the May 1, 20X0 and February 2, 20X1, stock issuances were charged to the named expense accounts;

Printing expense, $2,500,

Legal fees, $17,350,

Accounting fees $12,000,

SEC fees, $150

d. Market values for Simon Corp capital stock on various dates were:

9/13/X0 $78.50

2/2/X1 $85.00

9/14/X0 $79.00

4/28/X1 $90.00

A few hints as you analyze the Equity activity for this client and consider any Proposed Adjusting Journal Entries (PAJE's)

• The Directors' minutes will show authorization for the activity in the various capital accounts (issuing stock and repurchasing stock). Hint- these entries are recorded properly.
• Simon declared a stock dividend - consider the treatment of stock dividends - Is this a small stock dividend or large stock dividend? Was it recorded properly?
• Simon incurred stock issuance costs - consider how Simon recorded these costs - did they record them properly?

A comment about PAJE's. You must be able to analyze "what should have been recorded" vs. "what the client recorded". The difference is the PAJE. This is what I am asking you to determine.