Required:

a . Design analytical procedures to evaluate the reasonableness of the ending inventory account. ( 8 Marks)

c. What concerns, if any, do you have about the ending inventory at Working Nest Sores ? (2 Marks)

Your client, working nest Stores, specializes in office furniture. The company maintains an inventory of sofa sets, desk tables, chairs, and meeting tables. The client has provided the following selected financial statement information for the year ending December 31, 2020: 2020 2019 2018 Sales 52,793,900 50,050,440 47,734,300 COGS 45,121,880 44,160,900 42,020,400 Ending Inventory 7,153,500 5,950,220 5,080,660 Following is a breakdown of the ending inventory account as of December 31, 2020: Inventory Description Quantity Ending Balance Sofa Set 6,450 1,290,000 Desk Tables 7.865 786,500 Chairs 15,672 783,600 Meeting Tables- Small Size 4,008 1,202,400 Meeting Tables-Large Size 5,620 3,091,000 Total 7,153,500 Working Nest stores inventory in a 70,000 square foot warehouse facility at a location different from its corporate office. A single sofa set is stored on a 3 foot by 2 foot pallet. Warehouse storage shelves allow the company to store 1 pallet on the floor while 2 additional pallets are placed on shelves above the first pallet. Desk tables and small size meeting tables are also stored on similar sized pallets and are stored as well as the sofa sets,one unit can on a shelf above another pallet that rests on the floor. Chairs are stored in boxes that are 2 foot by 2 foot. Three boxes can be stacked on top of the box that sits on the floor, and two more on the shelves. A simple meeting table-large size is stored on a 4 foot by 4 foot pallet. One pallet on the floor and another one on the shelves