Task 1 for the Audit Case Review assignment is to complete the attached worksheet. The task is to prepare the analytical review ratios for the Keystone Computers & Networks. See Problem 6C-4 in the textbook on page 276 for further instructions. Use the documents found in Appendix 6C on pages 268-275 for reference. Once you complete the worksheet, upload the file to this page. (You can use the video below for further instructions on calculating the ratios.) Worksheet (NOTE: If the following link does not work, use the link in the module.) Task 1 Worksheet-4.docx Download Task 1 Worksheet-4.docx or Task 1 Worksheet PDF.pdf To help in case the link does not work, I pasted it below. Instructions (Problem 6C-4) For the first task of the Audit Case Review, you will recalculate the analytical review ratios for the Keystone Computers & Networks. The working paper on page 272 shows the ratios prepared by the auditors. Use this working paper as a reference to perform the following procedures: Use the worksheet on page 2 to recalculate the ratios for 12/31/X5. Refer to the Working Trial Balance on pages 270-271 to calculate the ratios. Show your work on the worksheet and insert the results below: Keystone Computers & Networks, Inc. Analytical Review Ratios For the Period Ended December 31, 20X5 12/31/X5 12/31/X4 Industry Current Ratio 1.215 1.300 Days' Sales in Accounts Receivable, Computed with Average Accounts Receivable 33.2 37.000 Allowance for Doubtful Accounts / Accounts Receivable 1.1% ------ Bad Debt Expense / Net Sales 0.2% ------ Total Liabilities to Net Worth 2.7 2.900 Return on Total Assets 8.3% 9.0% Return on Net Worth 30.5% 29.0% Return on Net Sales 1.0% 2.3% Gross Profit / Net Sales 23.2% 24.0% Selling, Operating and Administrative Expense 21.4% 23.9% Times Interest Earned 4.1 5.5 After completing part (a), review the ratios and identify below the financial statement accounts that should be investigated because the related ratios are not comparable to prior-year ratios, industry averages, or your knowledge of the company. For each account identified in part (b), list potential reasons for the unexpected account balances and related ratios. Case 6C-4 Details of Computations of 20X5 ratios Current Ratio Current Assets / Current Liabilities Days Sales in A/R Computed with Average A/R Sales per day = Sales / 365 = Average A/R = (Beg. A/R + End A/R) / 2 = Days sales = Average A/R / Sales per day = Allowance for Bad Debts / A/R Bad Debts Expense / Net Sales Inventory Turnover Computed with Average Inventory Average Inv. = (Beg. Inv. + End Inv) / 2 = Inv. Turnover = Cost of Goods Sold / Average Inv. = Days Inventory Computed with Average Inventory CGS per day = Cost of Goods Sold / 365 = Days Inv. = Average Inv. / CGS per day = Total Liabilities to Net Worth Total Liabilities / Stockholders' Equity Return on Total Assets Net Income / Total Assets Return on Net Worth Net Income / Stockholders' Equity Return on Net Sales Net Income / Net Sales Gross Profit / Net Sales Gross Profit / Net Sales Selling, Operating and Admin. Expense / Net Sales Selling, Operating and Admin. Exp. / Net Sales Times Interest Earned Operating Income / Interest Expense