Review the journal, ledgers, and financial statements prepared by the CFO found in Requirement 3's reading.

Develop and list 7-10 in-depth questions and/or requests for additional information that you would ask the CFO to provide in order to clarify the financial statement data that you read over. The answers will be used in the preparation of year-end financial statements and disclosure notes. Be as specific as possible and phrase your requests in the form of questions that would normally be asked of a client.

HYDRDQUAL, INC. Preliminary Flnanclals 2mm In early December EDXE. Rick Eiailey called Tom Fasbee to tell him that, in addition to meeting several other criteria. Hydroual's loan covenants required annual nancial statements he submitted to the bank. Regina Sontag at Midwest American Bank had reminded Rick that the statements must be reviewed by a CPA and that the review and related report should be comparable to what Dunes S Driftwood had done last year. In addition, the bank requested comparative nancial statements, including notes that provide the fair value of all nancial instruments and information on major customers. Rick wanted to know if Dunes S Driftwood would do the work again. Tom said his rm would be delighted to do it. Rick then requested that Tom send out the same person. He indicated that Hydroual's people knew you and had condence in your ability. Tom indicated that Rick's stafng request would be 'no problem.\" You, of course, were happy to be called on again. You made arrangements with Jerry Loos to obtain nancial statements as earty as possible in sop-r3. You received HydroDual's 2ox2 nancial statements on Wednesday, January 13. A preliminary review revealed the large crew truck investment made earlier in the year. You decided that a quick stop at Martha Mason's ofce would be appropriate. Martha represented Dunes S Driftwood on HydroDual's tax work. You asked Martha how the crew trucks would be depreciated for tax purposes. She indicated that they would be depreciated using the 5-year hatt year convention Modied Accelerated lDost Recovery System {MACRS} schedule. She also reminded you that the shop equipment purchased last year is being depreciated using the T-year hatt year convention MAC RS schedule. She also noted that she understood that all items classied as property. plant, and equipment are depreciated to the nearest full year for book purposes. Martha had a number of questions for you on another client, so you completed your conversation over lunch. Before leaving, she reminded you that the MADRS depreciation schedules -n be found on the |RS.gov website. You planned to spend the afternoon reviewing HydroDual's preliminary nancial statements in detail and get questions to Jerry by Thursday. Jerry then would prepare responses so that you could begin the review on the following Monday. REQUIRED: The journal entries and nancial statements prepared by Jerry Loos are attached. The crew truck cost schedule you recommended Jerry prepare is also included. You will nd that it is not at all clear how Jerry calculated the numbers on the schedule. Review the client's data and prepare a list of additional information items needed from Jerry. Be sure to include any necessary questions to get the information needed to reconcile each truck schedule number, and to add any needed items. Be as specic as possible and phrase your requests in the form of questions as they normally would be asked of a client. Be sure to provide a written reason that you are asking each question and also provide a reference to the PASS codication where appropriate. Jerry assured you that the bank account has been reconciled and that outstanding checks account for the only reconciling items. He also indicated that all vendor invoices reflecting business through December 31, EDXE have been booked. \f\f\f\f