Southeast Distributor, Inc Shoe erformance of Tests of Balances for the Expenditure Cycle Acquisitions and Cash Disbursements) MARK S. BEASLEY FRANK A. BUC LESS STEVEN M. GLOVER DoUGLAS F. PRAWITT LEARNING OBJECTIVES After completing and discussing this case you should be able to (U Recognize common documents and records used 14] Evaluate the results of tests of balances for in the expenditure cycle accounts payable using a nonstatistical approach 12] Recognize common tests of balances for [5] Recognize the linkage of substantive tests of ccounts payable balances to management assertion 13] Perform tests of balances for accounts payable INTRODUCTION Southeast Shoe Distributor (SSD) is a closely-owned business that was founded 10 years ago by Stewart Green and Paul Williams. SSD is a distributor that purchases and resells men's, women's, and children's shoes to retail shoe stores located in small to midsize communities. The company basic strategy is to obtain a broad selection of designer-label and name-brand footwear at low prices r resell to small one-location retail stores. SSD targets stores that have a difficult time obtaining reasonable quantities of designer and name-brand footwear. The company is able to keep the cost of tootwear low by (1) selectively purchasing large blocks of production overruns, overorders, mid- and late- season deliveries and last season's stock from manufacturers and other retailers at significarnt discounts, (2) sourcing in-season name-brand and branded designer footwear directly from factories negotiating favorable prices with manufacturers by ordering in Brazil, Italy, and Spain, and (3) ootwea r during off-peak production periods and taking delivery at one central warehou During he company purchased merchandise from over 50 domestic and vendors, independent resellers, manufacturers and other retailers that have frequent inventory. Designer and name-brand footwear sold by the company include the following arks, Dexter, Fila, Florsheim, Naturalizer, and Rockport. At the present time, SSD has one use located in Atlanta, Georgia. Last year SSD had net sales of $7,311,214. Sales are strongest cond and fourth calendar-year quarters, with the first calendar-year quarter substantially xcess warehous weaker than the rest Southeast Distributor, Inc Shoe erformance of Tests of Balances for the Expenditure Cycle Acquisitions and Cash Disbursements) MARK S. BEASLEY FRANK A. BUC LESS STEVEN M. GLOVER DoUGLAS F. PRAWITT LEARNING OBJECTIVES After completing and discussing this case you should be able to (U Recognize common documents and records used 14] Evaluate the results of tests of balances for in the expenditure cycle accounts payable using a nonstatistical approach 12] Recognize common tests of balances for [5] Recognize the linkage of substantive tests of ccounts payable balances to management assertion 13] Perform tests of balances for accounts payable INTRODUCTION Southeast Shoe Distributor (SSD) is a closely-owned business that was founded 10 years ago by Stewart Green and Paul Williams. SSD is a distributor that purchases and resells men's, women's, and children's shoes to retail shoe stores located in small to midsize communities. The company basic strategy is to obtain a broad selection of designer-label and name-brand footwear at low prices r resell to small one-location retail stores. SSD targets stores that have a difficult time obtaining reasonable quantities of designer and name-brand footwear. The company is able to keep the cost of tootwear low by (1) selectively purchasing large blocks of production overruns, overorders, mid- and late- season deliveries and last season's stock from manufacturers and other retailers at significarnt discounts, (2) sourcing in-season name-brand and branded designer footwear directly from factories negotiating favorable prices with manufacturers by ordering in Brazil, Italy, and Spain, and (3) ootwea r during off-peak production periods and taking delivery at one central warehou During he company purchased merchandise from over 50 domestic and vendors, independent resellers, manufacturers and other retailers that have frequent inventory. Designer and name-brand footwear sold by the company include the following arks, Dexter, Fila, Florsheim, Naturalizer, and Rockport. At the present time, SSD has one use located in Atlanta, Georgia. Last year SSD had net sales of $7,311,214. Sales are strongest cond and fourth calendar-year quarters, with the first calendar-year quarter substantially xcess warehous weaker than the rest
