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Please show all work. thank you Marilyn Terrill is the senior auditor for the audit of Uden Supply Company for the year ended December 31,
Please show all work. thank you
Marilyn Terrill is the senior auditor for the audit of Uden Supply Company for the year ended December 31, 20x4. In planning the audit. Marilyn is attempting to develop expectations for planning analytical procedures based on the financial Information for prior years and her knowledge of the business and the industry, including these: 1. Based on economic conditions, she believes that the increase in sales for the current year should approximate the historical trend in terms of actual dollar increases. 2. Based on her knowledge of industry trends, she believes that the gross pront percentage for 20x4 should be about 2 percent less than the percentage for 20x3. 3. Based on her knowledge of regulations, she is aware that the effective tax rate for the company for 20x4 nas been reduced by S percent from that in 20x3 4. Based on her knowledge of economic conditions, she is aware that the effective interest rate on the company's line of credit for 20x4 was approximately 12 percent. The average outstanding balance of the line of credit is $4,400,000. This line of credit is the company's only interest-bearing debt. 5. Based on her discussions with management and her knowledge of the industry, she believes that the amount of other expenses should be consistent with the trends from prior years. Comparative Income statement information for Uden Supply Company is presented in the below tobie Required: b. Determine the expected amounts for 20X4 for each of the income statement items (Round gross profit ratio and Income taxes ratto to nearest four decimal places. Round other ratios to nearest two decimal places. Round all other intermediate computations to the nearest whole value. Enter your answers in thousands.) UDEN SUPPLY COMPANY Comparative Income Statements Year End Daremher OXT 20x7 and 2013 IDEN SUPPLY CCOMPANY Sales Cost of goods sold Gross profit Sales commissions Advertising Salaries Payroll taxes Employee benefits Rent Depreciation Supplies Utilities Legal and accounting Miscellaneous Interest expense Net income before taxes Income taxes Net income Comparative Income Statements Years Ended December 20X1, 20X2, and 20x3 (Thousands) 20x1 Audited 20x2 Audited 20x3 Audited 20X4 Expected 15,000 15,600 16,200 10,350 10,770 11,210 4,650 4,830 4,990 0 1,050 1,090 1,130 300 310 320 1,166 1,208 1,250 205 219 233 188 202 216 81 83 85 81 83 85 47 49 51 42 44 46 55 57 59 33 35 37 462 480 492 940 970 986 212 218 222 728 752 764 $ 0 000 1 DO Step by Step Solution
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