Hi, I am doing a preminary analytical procedures for Apollo Shoes I have to find a unusual percentage and explain two possible hypotheses for why the change occurred I found one that increased prepaid insurace( 361 ) ID 14100, but decreased in insurance expense( 96 )ID 68000 I know this is strange because when prepaid insurance goes up, insurance expense should go up, but I dont' know how to explain Would you please help me Thank you Prepared by Apollo Shoes, Inc Reviewed by Trial Balance Audited Unaudited 2013 2014 Raw Change Percent Change Account ID Account Description (Audited) (Unaudited) (CY PY) (Raw Change PY) 10100 Cash on Hand $1,987 28 $2,275 23 $287 95 14 10200 Regular Checking Account $198,116 52 $557,125 92 $359,009 40 181 10300 Payroll Checking Account $0 00 $0 00 $0 00 10400 Savings Account $3,044,958 13 $3,645,599 15 $600,641 02 20 11000 Accounts Receivable $16,410,902 71 $51,515,259 98 $35,104,357 27 214 11400 Other Receivables $0 00 $1,250,000 00 $1,250,000 00 100 11500 Allowance for Doubtful Accounts ($1,262,819 88) ($1,239,009 75) $23,810 13 2 12000 Inventory Spotlight $18,825,205 24 $67,724,527 50 $48,899,322 26 260 12300 Reserve for Inventory Obsolescence ($3,012,000 00) ($846,000 00) $2,166,000 00 72 14100 Prepaid Insurance $743,314 38 $3,424,213 78 $2,680,899 40 361 14200 Prepaid Rent $200,000 00 $0 00 ($200,000 00) 100 14300 Office Supplies $7,406 82 $8,540 00 $1,133 18 15 14400 Notes Receivable Current $0 00 $0 00 $0 00 14700 Other Current Assets $0 00 $0 00 $0 00 15000 Land $117,000 00 $117,000 00 $0 00 0 15100 Buildings and Land Improvements $623,905 92 $674,313 92 $50,408 00 8 15200 Machinery, Equipment, Office Furniture $433,217 10 $2,929,097 13 $2,495,880 03 576 17000 Accum Depreciation ($164,000 00) ($610,000 00) ($446,000 00) 272 19000 Investments $572,691 08 $1,998,780 39 $1,426,089 31 249 19900 Other Noncurrent Assets $53,840 59 $53,840 59 $0 00 0 20000 Accounts Payable ($4,633,118 09) ($1,922,095 91) $2,711,022 18 59 23100 Sales Tax Payable $0 00 $0 00 $0 00 23200 Wages Payable ($29,470 32) $0 00 $29,470 32 100 23300 FICA Employee Withholding ($1,318 69) ($8,439 65) ($7,120 96) 540 23350 Medicare Withholding ($583 99) ($11,414 99) ($10,831 00) 1855 23400 Federal Payroll Taxes Payable ($6,033 01) ($118,086 12) ($112,053 11) 1857 23500 FUTA Tax Payable $0 00 $0 00 $0 00 23600 State Payroll Taxes Payable ($2,815 47) ($55,106 86) ($52,291 39) 1857 23700 SUTA Tax Payable $0 00 $0 00 $0 00 23800 FICA Employer Withholding ($1,318 69) ($8,439 65) ($7,120 96) 540 23900 Medicare Employer Withholding ($583 99) ($11,414 99) ($10,831 00) 1855 24100 Line of Credit ($10,000,000 00) ($44,403,000 00) ($34,403,000 00) 344 24200 Current Portion Long Term Debt $0 00 $0 00 $0 00 24700 Other Current Liabilities $0 00 $0 00 $0 00 27000 Notes Payable Noncurrent $0 00 ($12,000,000 00) ($12,000,000 00) 39003 Common Stock ($8,105,000 00) ($8,105,000 00) $0 00 0 39004 Paid in Capital ($7,423,000 00) ($7,423,000 00) $0 00 0 39005 Retained Earnings ($2,219,120 65) ($6,590,483 64) ($4,371,362 99) 197 40000 Sales ($246,172,918 44) $3,459,465 56 1 41000 Sales Returns $4,497,583 20 $11,100,220 89 $6,602,637 69 147 42000 Warranty Expense $1,100,281 48 $1,158,128 47 $57,846 99 5 45000 Income from Investments $0 00 ($1,426,089 31) ($1,426,089 31) 46000 Interest Income ($204,302 81) ($131,881 46) $72,421 35 35 47000 Miscellaneous Income $0 00 ($2,166,000 00) ($2,166,000 00) 50010 Cost of Goods Sold $141,569,221 61 $130,196,645 26 ($11,372,576 35) 8 57500 Freight $4,302,951 46 $4,240,263 09 ($62,688 37) 1 60000 Advertising Expense $897,140 01 $1,036,854 01 $139,714 00 16 61000 Auto Expenses $208,974 39 $210,502 80 $1,528 41 1 62000 Research and Development $31,212,334 17 $528,870 44 ($30,683,463 73) 98 64000 Depreciation Expense $133,000 00 $446,000 00 $313,000 00 235 64500 Warehouse Salaries $4,633,383 82 $4,720,715 56 $87,331 74 2 65000 Property Tax Expense $80,495 32 $99,332 45 $18,837 13 23 66000 Legal and Professional Expense $3,605,133 96 $4,913,224 45 $1,308,090 49 36 67000 Bad Debt Expense $1,622,425 99 $0 00 ($1,622,425 99) 100 68000 Insurance Expense $853,942 65 $36,106 92 ($817,835 73) 96 70000 Maintenance Expense $61,136 04 $35,502 87 ($25,633 17) 42 70100 Utilities $135,642 99 $137,332 18 $1,689 19 1 70110 Phone $76,373 78 $52,599 02 ($23,774 76) 31 70120 Postal $128,033 21 $77,803 61 ($50,229 60) 39 71000 Miscellaneous Office Expense $17,023 27 $24,891 82 $7,868 55 46 72000 Payroll Tax Exp $1,550,989 06 $1,577,811 85 $26,822 79 2 73000 Pension Profit Sharing Plan Ex $3,000,000 00 $3,300,000 00 $300,000 00 10 74000 Rent or Lease Expense $2,603,485 87 $1,206,574 00 ($1,396,911 87) 54 77500 Administrative Wages Expense $16,875,305 98 $16,197,225 43 ($678,080 55) 4 78000 Interest Expense $875,000 00 $2,591,736 50 $1,716,736 50 196 78500 Income Tax Expense Federal $2,365,000 00 $8,900,000 00 $6,535,000 00 276 78510 Income Tax Expense State $429,000 00 $3,100,000 00 $2,671,000 00 623 80000 Loss on Legal Settlement $19,172,000 00 $0 00 ($19,172,000 00) 100 $0 00 $0 00

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Hi, I am doing a preminary analytical procedures for Apollo Shoes. I have to find a unusual percentage and explain two possible hypotheses for why

Hi, I am doing a preminary analytical procedures for Apollo Shoes. I have to find a unusual percentage and explain two possible hypotheses for why the change occurred. I found one that increased prepaid insurace( 361%) ID:14100, but decreased in insurance expense(-96%)ID:68000. I know this is strange because when prepaid insurance goes up, insurance expense should go up, but I dont' know how to explain. Would you please help me? Thank you.


					Prepared by
	Apollo Shoes, Inc				Reviewed by
	Trial Balance
		Audited	Unaudited
		2013	2014	Raw Change	Percent Change
Account ID	Account Description	(Audited)	(Unaudited)	(CY-PY)	(Raw Change/PY)
10100	Cash on Hand	$1,987.28	$2,275.23	$287.95	14%
10200	Regular Checking Account	$198,116.52	$557,125.92	$359,009.40	181%
10300	Payroll Checking Account	$0.00	$0.00	$0.00
10400	Savings Account	$3,044,958.13	$3,645,599.15	$600,641.02	20%
11000	Accounts Receivable	$16,410,902.71	$51,515,259.98	$35,104,357.27	214%
11400	Other Receivables	$0.00	$1,250,000.00	$1,250,000.00	100%
11500	Allowance for Doubtful Accounts	($1,262,819.88)	($1,239,009.75)	$23,810.13	-2%
12000	Inventory - Spotlight	$18,825,205.24	$67,724,527.50	$48,899,322.26	260%
12300	Reserve for Inventory Obsolescence	($3,012,000.00)	($846,000.00)	$2,166,000.00	-72%
14100	Prepaid Insurance	$743,314.38	$3,424,213.78	$2,680,899.40	361%
14200	Prepaid Rent	$200,000.00	$0.00	($200,000.00)	-100%
14300	Office Supplies	$7,406.82	$8,540.00	$1,133.18	15%
14400	Notes Receivable-Current	$0.00	$0.00	$0.00
14700	Other Current Assets	$0.00	$0.00	$0.00
15000	Land	$117,000.00	$117,000.00	$0.00	0%
15100	Buildings and Land Improvements	$623,905.92	$674,313.92	$50,408.00	8%
15200	Machinery, Equipment, Office Furniture	$433,217.10	$2,929,097.13	$2,495,880.03	576%
17000	Accum. Depreciation	($164,000.00)	($610,000.00)	($446,000.00)	272%
19000	Investments	$572,691.08	$1,998,780.39	$1,426,089.31	249%
19900	Other Noncurrent Assets	$53,840.59	$53,840.59	$0.00	0%
20000	Accounts Payable	($4,633,118.09)	($1,922,095.91)	$2,711,022.18	-59%
23100	Sales Tax Payable	$0.00	$0.00	$0.00
23200	Wages Payable	($29,470.32)	$0.00	$29,470.32	-100%
23300	FICA Employee Withholding	($1,318.69)	($8,439.65)	($7,120.96)	540%
23350	Medicare Withholding	($583.99)	($11,414.99)	($10,831.00)	1855%
23400	Federal Payroll Taxes Payable	($6,033.01)	($118,086.12)	($112,053.11)	1857%
23500	FUTA Tax Payable	$0.00	$0.00	$0.00
23600	State Payroll Taxes Payable	($2,815.47)	($55,106.86)	($52,291.39)	1857%
23700	SUTA Tax Payable	$0.00	$0.00	$0.00
23800	FICA Employer Withholding	($1,318.69)	($8,439.65)	($7,120.96)	540%
23900	Medicare Employer Withholding	($583.99)	($11,414.99)	($10,831.00)	1855%
24100	Line of Credit	($10,000,000.00)	($44,403,000.00)	($34,403,000.00)	344%
24200	Current Portion Long-Term Debt	$0.00	$0.00	$0.00
24700	Other Current Liabilities	$0.00	$0.00	$0.00
27000	Notes Payable-Noncurrent	$0.00	($12,000,000.00)	($12,000,000.00)
39003	Common Stock	($8,105,000.00)	($8,105,000.00)	$0.00	0%
39004	Paid-in Capital	($7,423,000.00)	($7,423,000.00)	$0.00	0%
39005	Retained Earnings	($2,219,120.65)	($6,590,483.64)	($4,371,362.99)	197%
40000	Sales	($246,172,918.44)	############	$3,459,465.56	-1%
41000	Sales Returns	$4,497,583.20	$11,100,220.89	$6,602,637.69	147%
42000	Warranty Expense	$1,100,281.48	$1,158,128.47	$57,846.99	5%
45000	Income from Investments	$0.00	($1,426,089.31)	($1,426,089.31)
46000	Interest Income	($204,302.81)	($131,881.46)	$72,421.35	-35%
47000	Miscellaneous Income	$0.00	($2,166,000.00)	($2,166,000.00)
50010	Cost of Goods Sold	$141,569,221.61	$130,196,645.26	($11,372,576.35)	-8%
57500	Freight	$4,302,951.46	$4,240,263.09	($62,688.37)	-1%
60000	Advertising Expense	$897,140.01	$1,036,854.01	$139,714.00	16%
61000	Auto Expenses	$208,974.39	$210,502.80	$1,528.41	1%
62000	Research and Development	$31,212,334.17	$528,870.44	($30,683,463.73)	-98%
64000	Depreciation Expense	$133,000.00	$446,000.00	$313,000.00	235%
64500	Warehouse Salaries	$4,633,383.82	$4,720,715.56	$87,331.74	2%
65000	Property Tax Expense	$80,495.32	$99,332.45	$18,837.13	23%
66000	Legal and Professional Expense	$3,605,133.96	$4,913,224.45	$1,308,090.49	36%
67000	Bad Debt Expense	$1,622,425.99	$0.00	($1,622,425.99)	-100%
68000	Insurance Expense	$853,942.65	$36,106.92	($817,835.73)	-96%
70000	Maintenance Expense	$61,136.04	$35,502.87	($25,633.17)	-42%
70100	Utilities	$135,642.99	$137,332.18	$1,689.19	1%
70110	Phone	$76,373.78	$52,599.02	($23,774.76)	-31%
70120	Postal	$128,033.21	$77,803.61	($50,229.60)	-39%
71000	Miscellaneous Office Expense	$17,023.27	$24,891.82	$7,868.55	46%
72000	Payroll Tax Exp	$1,550,989.06	$1,577,811.85	$26,822.79	2%
73000	Pension/Profit-Sharing Plan Ex	$3,000,000.00	$3,300,000.00	$300,000.00	10%
74000	Rent or Lease Expense	$2,603,485.87	$1,206,574.00	($1,396,911.87)	-54%
77500	Administrative Wages Expense	$16,875,305.98	$16,197,225.43	($678,080.55)	-4%
78000	Interest Expense	$875,000.00	$2,591,736.50	$1,716,736.50	196%
78500	Income Tax Expense - Federal	$2,365,000.00	$8,900,000.00	$6,535,000.00	276%
78510	Income Tax Expense - State	$429,000.00	$3,100,000.00	$2,671,000.00	623%
80000	Loss on Legal Settlement	$19,172,000.00	$0.00	($19,172,000.00)	-100%
		$0.00	$0.00