Please rewrite the answers in your words for audit homework. I attached questions and answers below.

Audit Points 1. The assistant's noting for stamps of $5.80 and for other supplies $4.91 is acceptable due to immateriality and does not require adjustment being petty item. 2. Under account 103 \"General accounts\" assistance has reflected prior year $90,328.00 and adjusted as per Exhibit A-1 $26,200.14 Requirement: Assistant should note down the break-up of balance $64,127.86 and the treatment made after year end for the same. 3. In cash lead schedule account 104 for $75,000 as per Exhibit A-1-1 reported by assistant is incorrect. The bank confirmation A-1-1 reflects the balance payable for mortgage outstanding for $75,500 and will be due on 06/30/13. It is future obligation and is still to be met out. The bank has only paid interest @ 8% on 11/01/11. The assistant has not mentioned regarding verification of payment of interest with the books of Wilco Inc. It requires further verification. 4. CC deposit in transit for $7,200 included in bank reconciliation statement A-1 is credit card sales included in cash. The assistant is incorrect as it should be included in cash equivalents. 5. In bank reconciliation A-1 the outstanding checks as per A-1-3 for ($6,022.08) are taken. a. Check no. 217 dated 01/06/11for $2,000 stated to be encashed but payee's detail are not noted by assistant. b. The check no 1028 dated 12/29/2011 for $40 and check no. 1030 dated 12/30/11for $22.22 reported by assistant not returned with cut off statement. The assistant is incorrect by recommending the amount is immaterial therefore pass further analysis. These requires further analysis that when these checks are passed by the bank the amount is whether material or not is irrelevant. c. Check no. 217 dated06/01/2011 for $2,000 and check no. 222 dated 01/22/2011 for $2.50 have not been encashed and long period has passed assistant agrees with controller to \"leave sleeping dogs lie\" is not correct. These should be inquired and status should be traced as if lost by the receiver fresh check can be issued after completing required formalities, otherwise these shall remain a part of bank reconciliation forever. d. Check no. 1038 and 1039 dated 12/31/2011 for $2,000 and $3,000 respectively properly recorded in cash disbursement journal and shown in cut off statement but are not shown in Exhibit A-1-3 in outstanding checks therefore not included in bank reconciliation. These should form part of bank reconciliation. e. In bank reconciliation statement other-note collected by bank $5,000 is included and no clarification about it is noted by assistant. It should not form the part of reconciliation and assistant should enquire that if it forms the part of bank reconciliation means the Wilco Inc. has not passed entry for note collected by bank. It requires adjustment and will not form part of bank reconciliation. 6. The bank reconciliation state deposit in transit as per A-1-2 $8,010.50 is incorrect and requires adjustment as it is currency deposit in bank which is evident by deposit slip A-12. Assistant mentioned that it is properly posted on cut off bank statement on 01/09/2012. Evidence required bank cut off statement because it should not form part of cut off statement. It should be shown in bank statement up to 12/31/2011. Requires cut off statement and further verification. Wilco This exercise involves evaluating the sufficiency of audit evidence and reviewing working papers. You are the senior auditor on the Wilco Inc. audit at 12/31/X1. James Adler is the audit associate assigned to work on cash. He has completed the cash working papers on this, his first engagement, and has given them to you for your review. James is a U of A graduate. Review the schedules presented, noting any errors, missing indexes or cross references, lack of sufficient evidence, unclear explanations, etc. Make a list of "audit points" to summarize your review. Note on cutoff statements - A cutoff statement (not included in these materials, but referred to), is a bank statement for a period less than a month. For example, in this case the auditors received a cutoff statement directly from the bank for the period from January 1 through January 10, 20X2 (the process is that the client requests the bank to send it directly to the auditor); a cutoff statement includes canceled checks, deposit receipts, etc. Auditors use a cutoff statement to examine whether year end reconciling items on the bank statements are properly handled. For example, if the client's books show a 12/31 deposit that is not shown on the 12/31 bank statement, the deposit should be included early in January on the cutoff statement. Finally, schedule A-1-1 is a standard form used by auditors to confirm both the cash and debt with a financial institution. The referencing is as follows: A A-1 A-1-1 A-1-2 A-1-3 Cash lead schedule Bank reconciliation Bank confirmation Deposit in transit information Schedule of 12/31 outstanding checks Wilco Inc. Cash Lead Schedule 12/31/X1 A/C Description Prior Year Unadj. 12/31/X1 $ Cr. 101 Petty Cash $ 103 Genl. Acct. $90,328.00 $ 26,200.14 A-1 26,200.14 104 CD 0.00 $ 75,000.00 A-1-1 75,000.00 TOTAL 50.00 Dr. $90,378.00 50.00 Adj. 12/31/X1 $101,250.14 f $ --- --- 50.00 $101.250.14 f f f Column footed. Counted petty cash on January 2, 20X2. Fund was not replenished at year end and included $39.29 of cash, a receipt for $5.80 for stamps, and one for $4.91 for other supplies. Both had been purchased prior to year-end. Pass adjustment due to immateriality. A Wilco Inc. Bank Reconciliation--General Account 12/31/X1 Balance per Bank @ 12/31/X1--per A-1-1 Deposit in Transit--per A-1-2 $12,002.22 8,010.50 CC Deposits in Transit 7,200.00 Outstanding Checks--per A-1-3 (6,022.08) Other--Note Collected by Bank 5,000.00 9.50 Bank Service Charge Balance per Books @12/31/X1 f $26,200.14 f Column footed. Amount agrees to amount recorded as a deposit on the bank statement as of 12/31/X1. This cash was recorded in the cash receipts journal on 12/30/X1. Amount agrees to 12/31/X1 bank statement and charge slip enclosed with that statement. Client recorded charge on 1/7/X2 after reconciling bank account. Pass year-end adjustment as amount involved is immaterial. Represents December 30-31 credit card sales (Entry recorded is to debit Cash and to credit Credit Card Sales). Cash is ordinarily wired to account 2-3 days after sale as the company uses a batch process to runs the transactions every 2-3 days. Agreed to general ledger. A-1 Wilco Inc. Standard Bank Confirmation 12/31/X1 STANDARD FORM TO CONFIRM ACCOUNT BALANCE INFORMATION WITH FINANCIAL INSTITUTION Wilco Inc._________ CUSTOMER NAME ORIGINAL To be mailed to accountant Financial Institution's Name and Address Bank of Arizona Tempe Branch 1601 E. Broadway Tempe, AZ 85282 1. We have provided to our accountants the following information as of the close of business on ___12/31, X1_ _ , regarding our deposit and loan balances. Please confirm the accuracy of the information, noting any exceptions to the information provided. If the balances have been left blank, please complete this form by furnishing the balance in the appropriate space below. Although we do not request nor expect you to conduct a comprehensive, detailed search of your records, if during the process of completing this confirmation additional information about other deposit and loan accounts we may have with you comes to your attention, please include such information below. At the close of business on the date listed above, our records indicated the following deposit balance(s): ACCOUNT NAME INTEREST RATE GENERAL 2. ACCOUNT NO. 0044-9834 BALANCE -0- $12,002.22 A-1 We were directly liable to the financial institution for loans at the close of business on the date listed above as follows: ACCOUNT NO./ DESCRIPTION BALANCE DATE DUE INTEREST RATE DATE THROUGH WHICH INTEREST IS PAID 8% 11/1/X1 DESCRIPTION OF COLLATERAL A-1 37-353-23-56 $75,500 6/30/X3 Brian Dyman 1st mortgage on building 12/29/X1 (Customer's Authorized Signature) (Date) The information presented above by the customer is in agreement with our records. Although we have not conducted a comprehensive, detailed search of our records, no other deposit or loan accounts have come to our attention except as noted below. Will Clarke 1/5/X2 (Financial Institution Authorized Signature) (Date) Assistant Controller (Title) EXCEPTIONS AND/OR COMMENTS Please return this form directly to our accountants: Gill & Co, CPA's 2552 E. Camelback Road Phoenix, AZ 85002 Ordinarily, balances are intentionally left blank if they are not available at the time the form is prepared. A-1-1 Wilco Inc. Deposit in Transit 12/31/X1 Copy of Deposit Slip for Deposit in Transit DEPOSIT SLIP Wilco Inc. PO Box 2833353 Tempe, AZ 85282 Currency Coin Checks 7510.00 500.50 Date: 12/31, 20X1 DEPOSITS MAY NOT BE AVAILABLE FOR IMMEDIATE WITHDRAWAL Total From Other Side DEPOSIT TICKET USE OTHER SIDE FOR ADDITIONAL LISTINGS TOTAL Less Cash TOTAL ITEMS NET DEPOSIT 8010.50 A-1 BE SURE EACH ITEM IS PROPERLY ENDORSED. f Bank of Arizona Tempe Branch 1601 E. Broadway Avenue Tempe, AZ 85282 21133544: 933..50023333 The client saved a copy of the deposit slip that is filled out. This is a copy of it. Per client, the cash represents cash sales on 12/31/X1. I agreed totals to the Cash Receipts Journal on 12/31/X1. Properly posted on cutoff bank statement as having been received by bank on 1/9/X2. A-1-2 CP Wilco Inc. Outstanding Checks--General Account 12/31/X1 Check # Date 217 222 1021 1024 1025 1028 1030 1034 1035 1036 1/ 6/X1 1/22/X1 12/15/X1 12/22/X1 12/24/X1 12/29/X1 12/30/X1 12/31/X1 12/31/X1 12/31/X1 Amount $2,000.00 2.50 1,000.00 1,110.32 1,147.04 40.00 22.22 900.00 350.00 450.00 $6,022.08 Traced and agreed to canceled check included in 1/10/X2 cutoff statement sent directly to us. Amount and date agreed. Check not returned with cutoff statement. Traced to cash disbursements journal (payee, amount, date, and number). No exceptions noted. Pass further analysis since amount is immaterial. Per client, these checks have not been cashed. Controller believes payee may have lost them and wishes to "leave sleeping dogs lie." Per client, check written (to pay account payable) before year-end, but not mailed until 1/2/X2 because on 12/31/X1 the last office mail was picked up at 3 PM due to year-end party of mail room employees at Durant's. NOTE:Also included with the cutoff statement were two checks #s 1038 and 1039, for $2,000 and $3,000 respectively, dated 12/31/X1. I discussed this with controller and he showed me where they had been properly recorded in the cash disbursements journal on December 31, 20X1. A-1-3