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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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