Question 29 (8 points) Scarlata & Garvin, CPAs is auditing the financial statements of Dunder-Mifflin, Inc. (DM) for the year ended December 31, 2019. You are an assistant on the audit, and you are applying analytical procedures to the interest expense account. The only obligation that DM has that bears interest is a line of credit with First National Bank of Scranton. The loan agreement specifies that interest is due each month on the average monthly balance at the rate of "prime plus 2 percent." The bank gave you a report that showed the prime rate of interest was 4% for the first six months of the year and 5% for the last six months. The bank was also able to give you a report that showed the average balance on the line of credit by quarter, which is shown below. You notice that that the balance on the line of credit did not fluctuate much during the quarters: Quarter Average Balance Jan.-March $2.350.000 Apr-June $2.500.000 July-Sept. Oct-Dec. $2,000,000 $2.200,000 Part A: Prepare an estimate of the balance you expect to find in the interest expense account. Provide enough detail that I can understand the computation of your estimate. [Note: In addition to typing your response, you may want to write your final answer down on a piece of paper to use for parts B and C) Question 30 (4 points) This information is repeated from the previous question: Scarlata & Garvin, CPAs is auditing the financial statements of Dunder-Mifflin, Inc. (DM) for the year ended December 31, 2019. You are an assistant on the audit, and you are applying analytical procedures to the interest expense account. The only obligation that DM has that bears interest is a line of credit with First National Bank of Scranton The loan agreement specifies that interest is due each month on the average monthly balance at the rate of "prime plus 2 percent." The bank gave you a report that showed the prime rate of interest was 4% for the first six months of the year and 5% for the last six months. The bank was also able to give you a report that showed the average balance on the line of credit by quarter, which is shown below. You notice that that the balance on the line of credit did not fluctuate much during the quarters: ne prime give you the Quarter Jan-March Apr-June July-Sept Oct-Dec. Average Balance $2,350.000 $2.500,000 32,600,000 $2.200,000 Part B: The actual account balance of interest expense is $552.000, and the tolerable difference is $50.000. Given the result that you calculated in Part A, what would be your conclusion? What additional steps should you apply. If any? Question 31 (4 points) The information below is repeated from a previous question (scroll past the problem information to the requirements): Scarlata & Garvin, CPAs is auditing the financial statements of Dunder Mifflin, Inc. (DM) for the year ended December 31. 2019. You are an assistant on the audit, and you are applying analytical procedures to the interest expense account. The only obligation that DM has that bears interest is a line of credit with First National Bank of Scranton. The loan agreement specifies that interest is due each month on the average monthly balance at the rate of "prime plus 2 percent." The bank gave you a report that showed the prime rate of interest was 4% for the first six months of the year and 5% for the last six months. The bank was also able to give you a report that showed the average balance on the line of credit by quarter, which is shown below. You notice that that the balance on the line of credit did not fluctuate much during the quarters: Quarter Average Balance Jan-March $2,350,000 Apr-June $2,500,000 July-Sept. $2,600,000 Oct-Dec. $2,200,000 Part C: Ignore your answer to part (B). Assume the actual account balance is $641,000, and the tolerable difference is $50.000. Given the result that you calculated in Part A, what would be your conclusion? What additional steps should you apply, if any? Question 29 (8 points) Scarlata & Garvin, CPAs is auditing the financial statements of Dunder-Mifflin, Inc. (DM) for the year ended December 31, 2019. You are an assistant on the audit, and you are applying analytical procedures to the interest expense account. The only obligation that DM has that bears interest is a line of credit with First National Bank of Scranton. The loan agreement specifies that interest is due each month on the average monthly balance at the rate of "prime plus 2 percent." The bank gave you a report that showed the prime rate of interest was 4% for the first six months of the year and 5% for the last six months. The bank was also able to give you a report that showed the average balance on the line of credit by quarter, which is shown below. You notice that that the balance on the line of credit did not fluctuate much during the quarters: Quarter Average Balance Jan.-March $2.350.000 Apr-June $2.500.000 July-Sept. Oct-Dec. $2,000,000 $2.200,000 Part A: Prepare an estimate of the balance you expect to find in the interest expense account. Provide enough detail that I can understand the computation of your estimate. [Note: In addition to typing your response, you may want to write your final answer down on a piece of paper to use for parts B and C) Question 30 (4 points) This information is repeated from the previous question: Scarlata & Garvin, CPAs is auditing the financial statements of Dunder-Mifflin, Inc. (DM) for the year ended December 31, 2019. You are an assistant on the audit, and you are applying analytical procedures to the interest expense account. The only obligation that DM has that bears interest is a line of credit with First National Bank of Scranton The loan agreement specifies that interest is due each month on the average monthly balance at the rate of "prime plus 2 percent." The bank gave you a report that showed the prime rate of interest was 4% for the first six months of the year and 5% for the last six months. The bank was also able to give you a report that showed the average balance on the line of credit by quarter, which is shown below. You notice that that the balance on the line of credit did not fluctuate much during the quarters: ne prime give you the Quarter Jan-March Apr-June July-Sept Oct-Dec. Average Balance $2,350.000 $2.500,000 32,600,000 $2.200,000 Part B: The actual account balance of interest expense is $552.000, and the tolerable difference is $50.000. Given the result that you calculated in Part A, what would be your conclusion? What additional steps should you apply. If any? Question 31 (4 points) The information below is repeated from a previous question (scroll past the problem information to the requirements): Scarlata & Garvin, CPAs is auditing the financial statements of Dunder Mifflin, Inc. (DM) for the year ended December 31. 2019. You are an assistant on the audit, and you are applying analytical procedures to the interest expense account. The only obligation that DM has that bears interest is a line of credit with First National Bank of Scranton. The loan agreement specifies that interest is due each month on the average monthly balance at the rate of "prime plus 2 percent." The bank gave you a report that showed the prime rate of interest was 4% for the first six months of the year and 5% for the last six months. The bank was also able to give you a report that showed the average balance on the line of credit by quarter, which is shown below. You notice that that the balance on the line of credit did not fluctuate much during the quarters: Quarter Average Balance Jan-March $2,350,000 Apr-June $2,500,000 July-Sept. $2,600,000 Oct-Dec. $2,200,000 Part C: Ignore your answer to part (B). Assume the actual account balance is $641,000, and the tolerable difference is $50.000. Given the result that you calculated in Part A, what would be your conclusion? What additional steps should you apply, if any