INCOME STATEMENT

For the Twelve Months Ended 12/31/17 and 12/31/16 *Capitalization threshold = $5000

Analyze the Balance Sheet and Income Statement for ABC Company.

1) Come up with 6 questions for the client that you would like to dig deeper into based on the change from 2016 to 2017. 2) For each of the 6 questions, list audit steps you would take to check for material misstatements 3) Would you allow yourself to eventually sign off on the audit report.

2017 2016 Revenues and Gains Sales revenues Interest revenues Gain on sale of assets 120,000 150,000 1,000 1,500 2,000 136,000 153,500 15,000 Total revenue and gains Expenses and losses Cost of goods sold Office supplies e Maintenance expense Depreciation expense Office equipment expense Advertising expense Interest expense Loss from lawsuit 32,000 40,000 30,000 10,000 10,000 20,000 3,000 15,00025,000 3,000 2,500 5,0005,800 2,000 120,000 108,300 xpense 5,000 20,000 Total expenses and losses Net Income 256,000 261,800