Question
Preliminary Analytical Procedures - Conclusions of Ratio Analysis 12/31/2020 Liquidity: Conclusions and comments on the client liquidity ratios here. Profitability: Conclusions and comments on the
Preliminary Analytical Procedures - Conclusions of Ratio Analysis
12/31/2020
Liquidity:
Conclusions and comments on the client liquidity ratios here.
Profitability:
Conclusions and comments on the client profitability ratios here.
Solvency:
Conclusions and comments on the client Solvency ratios here.
Going concern:
Conclusions and comments on the client's ability to continue as a going concern based on the above ratio analysis here.
WP 3-5
XYZ Corp.
Preliminary materiality Judgment
Measurement base
(e.g., income, revenue, assets)
Percentage Applied
Preliminary materiality
$
( name of the base here)
%
$ (rounded)
WP 25-1
XYZ Corp.
Accounts Receivable Lead sheet
Account name and Number Unadjusted Adjusted
BalanceAdjustmentsBalance
100-101 Accounts receivable jQuery22408845730375137939_1603728510977 ?? ??
Conclusions:
The accounts receivable account is ????? (fairly on NOT fairly stated)
WP 25-2
XYZ Corp.
Calculation of Sample Size
Book value of recorded population = $26,388,000 (150 accounts)
Book value for individual material accounts = $ 17,462,207 (20 accounts)
(test all of them)
Book value for all remaining accounts = $8,925,793
(test only a sample)
Performance materiality = $393,000
Confidence factor = ??
(From table above assuming ROIA of 10%
and Ratio of expected to material misstatement
of 5%)
Sample size* = ?? accounts (round up)
Total accounts to be confirmed = ?? accounts
[*Sample size = confidence factor / (Performance materiality / Population value)]
Hint: population value in the equation above is the population value that you selected a sample from.
WP 25-5
XYZ Corp.
Adjusting Entries
Account
Dr.
Cr.
**********************************************************************************************
Sheet 1:XYZ Balance Sheet
XYZ CorporationANNUAL BALANCE SHEET
($ thousands) below:
line one- 12/31/2020
line two-12/31/2019
line three-12/31/2018
line four-21/31/2017
ASSETS
Cash & Equivalents
24991
29514
30240
28096
Net Receivables
26388
25606
22813
14439
Inventories
13764
13642
14039
14714
Prepaid Expenses
0
0
0
0
Other Current Assets
12864
14908
14409
12747
Total Current Assets
78007
83670
81501
69996
Gross Plant Property & Equipment
63750
44078
36679
31662
Accumulated Depreciation
12349
9275
7429
5817
Net Plant Property & Equipment
51401
34803
29250
25845
Investments at Equity
9201
8350
8094
6883
Other Investments
18500
16006
14354
6954
Intangibles
5947
6410
7228
8782
Deferred Charges
0
0
0
0
Other Assets
31464
28438
25917
30962
TOTAL ASSETS
194520
177677
166344
149422
LIABILITIES
Long Term Debt Due In One Year
0
0
0
4629
Notes Payable
19562
14988
14158
889
Accounts Payable
24062
22529
23621
25166
Taxes Payable
0
0
0
0
Accrued Expenses
5865
5726
4844
5063
Other Current Liabilities
21977
22458
19789
18245
Total Current Liabilities
71466
65701
62412
53992
Long Term Debt
43549
31853
22025
10532
Deferred Taxes
0
0
0
603
Investment Tax Credit
0
0
0
0
Other Liabilities
39182
44099
38733
47295
TOTAL LIABILITES
154197
141653
123170
112422
Redeemable Noncontrolling Int.
0
0
0
0
EQUITY
Preferred Stock - Redeemable
0
0
0
0
Preferred Stock - Nonredeemable
0
0
3109
10391
Total Preferred Stock
0
0
3109
10391
Common Stock1
5
16
15
14
Capital Surplus
27607
28937
28780
23834
Retained Earnings
12249
6504
10703
2005
Less: Treasury Stock
0
0
0
0
Common Equity
39871
35457
39498
25853
Stockholder's Equity - Parent
39871
35457
42607
36244
Nonredeemable Noncontrolling Int.
452
567
567
756
Stockholder's Equity - Total
40323
36024
43174
37000
TOTAL LIABILITIES & EQUITY
194520
177677
166344
149422
COMMON SHARES OUTSTANDING
1500
1600
1500
1366.374
***********************************************************************************************
Sheet 2:XYZ Income Statement
XYZ Corporations ANNUAL INCOME STATEMENT
($ ThousandsEXCEPT PER SHARE)
12/31/2020
12/31/2019
12/31/2018
21/31/2017
Sales
152356
155929
155427
152256
Cost of Goods Sold
123800
131657
130909
132229
Gross Profit
28556
24272
24518
20027
Selling, General &Administrative Expense
11530
11756
11910
13593
Operating Income Before Deprec.
17026
12516
12608
6434
Depreciation, Depletion & Amortization
7219
6238
5908
5888
Operating Profit
9807
6278
6700
546
Interest Expense
2160
1899
1130
889
Non-Operating Income/Expense
2914
2987
2297
2958
Special Items
-2843
-3120
-409
-31310
Pretax Income
7718
4246
7458
-28695
Total Income Taxes
-1897
228
2127
-34831
Income Before Extraordinary Items and Noncontrolling Interests
9615
4018
5331
6136
Noncontrolling Interest - Inc Acc-72
69
-15
-52
Income Before Extraordinary Items & Discontinued Operations9687
3949
5346
6188
Preferred Dividends
0
1145
1576
859
Available for Common
9687
2804
3770
5329
Savings Due to Common Stock Equivalents
0
0
0
-470
Adjusted Available for Common
9687
2804
3770
4859
Extraordinary Items
0
0
0
0
Discontinued Operations0
0
0
0
Adjusted Net Income
9687
2804
3770
4859
Income to Company Incl Extraordinary Items & Disc Ops
9615
4018
5331
6136
Earnings Per Share Basic -Excluding Extra Items & Disc Op
6.11
1.75
2.71
3.1
Earnings Per Share Basic - Including Extra Items & Disc Op
6.11
1.75
2.71
3.1
Earnings Per Share Diluted-Excluding Extra Items & Disc Op
5.91
1.65
2.38
2.92
Earnings Per Share Diluted - Including Extra Items & Disc Op
5.91
1.65
2.38
2.92
EPS Basic from Operations
5.01
3.06
2.88
0.23
EPS Diluted from Ops
4.87
2.9
2.52
0.23
Dividends Per Share
1.38
1.2
0
0
Com Shares for Basic EPS
1586
1605
1393
1566
Com Shares for Diluted EPS
1640
1687
1676
1675
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