The owner of a small snack food and potato chip manufacturer, California Crunch Company, has asked you to investigatea possible issue withthe company's payroll.They have provided you with this year and last year's income statements and two payroll files.The "HR Master" file gives you important information about each employee.The "Payroll" file details the company's payroll for the last 5 pay periods of the year. You will be conducting some audit procedures for California Crunch andanalyzingthe results.

Review the income statements given to you by the owner of California Crunch Company.Based on the AICPA Code of Professional Conduc, how would youplan to proceed to addressthe owner's concernsand what specific steps you would take to audit this company.

e Writing Project - Income Statements (1) [Compatibility Mode] - Excel ... + FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW QuickBooks Shauni Warwick do Cut Arial - 13 AA Be Wrap Text General EX AutoSum * As BB Copy Fill .00 4.0 Insert Delete Format Clear Sort & Find & Paste BIU . Merge & Center Conditional Format as Cell Format Painter Formatting Table Styles Filter * Select Clipboard Font Alignment Number Styles Cells Editing A1 California Crunch Company B C G H J K L M N P Q R S T U V W Y 2 AA AB AC AD California Crunch Company Statements of Income For the year ended December 31 2018 2017 Net Sales (less returns & allow ances) #8,353,542 $7,998,832 Cost of Goods Sold 3,745,623 3,621,532 4% 3% Gross Margin 4,607.919 4.377 300 Operating Expenses: Advertising 115,325 65,232 113,452 62,585 2% Bad Debt Expense 4% Depreciation and Amortization 75,210 73.565 2% Dues & Subscriptions 600 575 4% Insurance 60,800 50,600 300 285 0% Licenses & Fees 5% Marketing & Promotion 12,632 51,025 3%% Meals and Entertainment 25,030 24.345 3% Office Expense: 14,325 -2% Office Supplies 24,003 14,652 23,458 2% Salaries & Wages ,380,105 39,700 2.192,032 9% Professional Fees 38,500 3%% Property Taxes 19,220 19,000 1% Rent 35,230 34,360 1% Repairs & Maintenance 1,450 1,500 -3% Shipping Deliver 770 730 5% Travel Expenses '5,830 73,560 Utilities 35,230 34,250 3% 28 Leased Equipment 44,000 43,750 29 Other 15,320 14.756 4% 30 Total Operating Expenses 3.130,312 ,477,607 2.926.980 7% 31 Operating Income 1,450,320 2% 32 Interest Expense 84.65 83,950 33 Other Income (interest, royalties) 5,920 5,725 1,372.095 3% 34 Income Before Takes ,398,869 35 Income Taxes 489,604 480.233 36 Net Income $ 909,265 $ 891,862 37 38 Income Statement + + 56% READY