Hello,

I need you to solve the circled question for the module XII which you will fined in the PDF file.

Attached the PDF and Excel Files about that module.

Note : please use Excel program to calculate any number.

Note : I need someone expert in auditing.

Thank you

WP 20 BILTRITE BICYCLES, INC. Estimated Liability for Product Warranty December 31, 2009 1/1/09 Audited balance 2009 Provision for warranty 2009 Warranty claims by customers 12/31/09 Ledger balance Recommended audit adjustment (below) 12/31/09 Audited balance Prepared by: Date: Reviewed by: Date: Account 2070 Estimated Liability $860,000 $1,139,000 & $1,999,000 ($1,455,000) E $544,000 Account 8330 Warranty Expense #DIV/0! #DIV/0! #DIV/0! ===================== #DIV/0! =============== $1,139,000 $1,139,000 Explanation of audit legends: & Recalculated at 1/2% of cost of sales E Examined underlying documentation on a test basis Data from clientprepared analysis of warranty claims: Year of Claim 2006 2007 2008 2008 Cost of Goods Sold Year of Sale 2008 2009 2007 2006 $412,000 $1,100,000 $344,000 $830,000 $560,000 $227,800,000 * $246,000 $895,000 $1,141,000 $1,174,000 $1,512,000 $215,600,000 $209,440,000 $211,365,000 Warranty claims as a percent of cost of goods sold Appropriate percentage based on analysis Appropriate provision based on analysis 2009 claims already honored 12/31/09 Calculated liability 12/31/09 Ledger balance Recommended adjustment * Unaudited cost of goods sold Audit adjustment No. 1 Audit adjustment No. 3 Audited cost of goods sold #DIV/0! #DIV/0! ($560,000) #DIV/0! $544,000 #DIV/0! ===================== $227,800,000 $227,800,000 ===================== Audit Adjustment 12 8330 Product Warranty Expense 2070 Estimated Liability for Product Warranty To adjust liability to amount considered reasonable based on past history of warranty claims