Hi,

I need help with homework.

Please see attached for audit assignment. need to answer the following questions

1- which account balances and or relationships appear to require attention, and why you have reached that conclusion? Pay particular attention to conflicting interrelationships. if appropriate, suggest unrecorded liabilities, obsolete inventories etc. note that this section should be the bulk of your analysis.

2- make an assessment of overall financial condition( weak, strong, etc) of dossier company, refer to specific ratios or trends to support your analysis.

3- make an appraisal of overall side risk ( high, medium, or low) inherent in this engagement and explain your rationale.

Assets Cash Accounts Receivable Allowance for bad debts Net Receivables Inventory Total Current Assets Land Buildings Accum. Depreciation -Buildings Machinery and Equipment Accum. Depreciation -Machinery & Equip Automotive Equipment Accum. Depreciation -Auto Equipment Furniture and Fixtures Accum. Depreciation -Furniture and Fixtures Property, Plant, and Equipment Total Assets Liabilities Accounts Payable Accrued Interest Dividends Payable Federal Income Tax Payable Short-Term Notes Payable Total Current Liabilities Long term Notes Payable Total Liabilities Owners Equity Common Stock Paid-In Capital Retained Earnings Dividends $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Audited 2014 313,444 107,820 (8,961) 98,859 708,294 1,120,597 48,138 257,450 (61,645) 510,803 (152,323) 92,454 (49,958) 99,111 (35,702) 708,328 1,828,925 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Audited 2015 339,415 124,021 (10,485) 113,536 777,152 1,230,103 82,250 276,263 (65,416) 540,845 (160,866) 99,425 (52,798) 106,433 (37,581) 788,555 2,018,658 Unaudited 2016 $ 595,810 $ 197,420 $ (15,105) $ 182,315 $ 873,673 $ 1,651,798 $ 82,250 $ 276,263 $ (74,625) $ 726,245 $ (178,683) $ 113,825 $ (79,454) $ 120,533 $ (43,255) $ 943,099 $ 2,594,897 Vertical Analysis 2014 2015 2016 17% 17% 23% 6% 6% 8% 0% -1% -1% 5% 6% 7% 39% 38% 34% 61% 61% 64% 3% 4% 3% 14% 14% 11% -3% -3% -3% 28% 27% 28% -8% -8% -7% 5% 5% 4% -3% -3% -3% 5% 5% 5% -2% -2% -2% 39% 39% 36% 100% 100% 100% $ $ $ $ $ $ $ $ 217,003 15,094 15,725 22,872 120,750 391,444 37,110 428,554 $ $ $ $ $ $ $ $ $ $ $ $ 878,950 91,566 268,866 (15,725) $ $ $ $ Horizontal Analysis 2015 Change 2016 Change 8% 76% 15% 59% 17% 44% 15% 61% 10% 12% 10% 34% 71% 0% 7% 0% 6% 14% 6% 34% 6% 11% 8% 14% 6% 50% 7% 13% 5% 15% 11% 20% 10% 29% 223,161 10,625 15,725 23,023 125,000 397,534 397,534 $ $ $ $ $ $ $ $ 197,945 15,833 15,725 25,000 254,503 475,000 729,503 12% 1% 1% 1% 7% 21% 2% 23% 11% 1% 1% 1% 6% 20% 0% 20% 8% 1% 1% 1% 0% 10% 18% 28% 3% -30% 0% 1% 4% 2% -100% -7% -11% 49% 0% 9% -100% -36% #DIV/0! 84% 925,000 95,979 429,855 (15,725) $ $ $ $ 925,000 95,979 600,145 (15,725) 48% 5% 15% -1% 46% 5% 21% -1% 36% 4% 23% -1% 5% 5% 60% 0% 0% 0% 40% 0% Current Net Income Total Owners' Equity Total Liabilities and Owners' Equity $ $ $ 176,714 $ 1,400,371 $ 1,828,925 $ 186,015 $ 1,621,124 $ 2,018,658 $ 259,995 1,865,394 2,594,897 10% 77% 100% 9% 80% 100% 10% 72% 100% 5% 16% 10% 40% 15% 29% Audited 2014 Revenue Sales Sales Returns and Allowances Net Sales Expenses Costs of Goods Sold Gross Margin Operating Expenses Wage Expense Payroll Tax Expense Depreciation Expense Rent Expense Office Supplies Expense Small Tools Expense Advertising Expense Insurance Expense Repairs and Maintenance Property Tax Expense Utilities Expense Professional Fees Miscellaneous Expense Provision for Bad Debts Freight Expense Total Operating Expenses Income From Operatons Other Income (Expense) Interest Expense Sale of Assets Miscellaneous Income Other Income (Expense) Net Income Before Taxes Federal Income Taxes Net Income Audited 2015 Unaudited 2016 Vertical Analysis 2014 2015 2016 Horizontal Analysis 2015 Change 2016 Change $ 2,348,263.00 $ 2,471,690.00 $ 3,103,242.00 $ (70,429.00) $ (73,970.00) $ (31,110.00) $ 2,277,834.00 $ 2,397,720.00 $ 3,072,132.00 103% -3% 100% 103% -3% 100% 101% -1% 100% 5% 5% 5% 26% -58% 28% $ 1,349,886.00 $ 1,403,323.00 $ 1,753,479.00 $ 927,948.00 $ 994,397.00 $ 1,318,653.00 59% 41% 59% 41% 57% 43% 4% 7% 25% 33% $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 424,080.00 45,988.00 61,201.00 3,563.00 8,184.00 2,839.00 10,747.00 24,450.00 16,976.00 12,790.00 10,137.00 11,281.00 287.00 9,112.00 27,060.00 668,695.00 259,253.00 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 456,400.00 49,408.00 66,422.00 3,750.00 9,115.00 2,988.00 11,813.00 26,737.00 18,869.00 13,663.00 10,770.00 11,675.00 312.00 9,591.00 29,884.00 721,397.00 273,000.00 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 617,078.00 64,716.00 82,141.00 3,750.00 11,625.00 3,650.00 14,090.00 30,412.00 17,470.00 14,050.00 11,398.00 10,420.00 772.00 12,288.00 39,287.00 933,147.00 385,506.00 19% 2% 3% 0% 0% 0% 0% 1% 1% 1% 0% 0% 0% 0% 1% 29% 11% 19% 2% 3% 0% 0% 0% 0% 1% 1% 1% 0% 0% 0% 0% 1% 30% 11% 20% 2% 3% 0% 0% 0% 0% 1% 1% 0% 0% 0% 0% 0% 1% 30% 13% 8% 7% 9% 5% 11% 5% 10% 9% 11% 7% 6% 3% 9% 5% 10% 8% 5% 35% 31% 24% 0% 28% 22% 19% 14% -7% 3% 6% -11% 147% 28% 31% 29% 41% $ $ $ $ $ $ $ (26,125.00) 17,806.00 (8,319.00) 250,934.00 74,222.00 176,712.00 $ $ $ $ $ $ $ (27,700.00) 18,738.00 (8,962.00) 264,038.00 78,023.00 186,015.00 $ $ $ $ $ $ $ (21,146.00) (4,365.00) (25,511.00) 359,995.00 100,000.00 259,995.00 -1% 1% 0% 0% 11% 3% 8% -1% 1% 0% 0% 11% 3% 8% -1% 0% 0% -1% 12% 3% 8% 6% 5% #DIV/0! 8% 5% 5% 5% -24% -123% #DIV/0! 185% 36% 28% 40% Current Ratio Quick Ratio Receivable Turnover Days' Receivable Inventory Turnover Days' Inventory Asset Turnover Return on Net Assets (ROE) Return on Assets (ROA) Debt to Net Assets Debt to Total Assets Times Interest Earned 2014 2015 2016 Industry Median 2.86 3.09 6.49 1.80 1.05 1.14 3.06 0.90 23.04 22.58 20.77 11.13 15.84 16.16 171.82 32.80 1.91 1.89 2.12 5.30 191.52 193.18 171.82 68.87 1.25 1.25 1.33 3.23 0.13 0.12 0.15 0.14 0.10 0.10 0.11 0.05 0.31 0.25 0.39 1.14 0.23 0.20 0.28 0.53 10.61 10.53 18.02 N/A