the question was expalined in the blue pic. i need to write about three relationships from the following schedules just like the (example) we have in the last pic. please explain your answer well.
thank you!!
Instructions: For this assignment you'll chose three different relationships (A, B, and c) from the trial balance (a relationship - 2 or more accounts) and hypothesize at least two reasons we see the change we do, as well as if you think RMM should increase, decrease or remain neutral. Use your GAAP knowiedge and your business acumen to appropriately address what may or may not be expected. You are free to use any information available to you either via the memos or the competitor financial statements. Don't know where to begin? Hint: It is useful to first figure out what the company does... Account ID Apollo Shoes, Inc Preliminary Analytical Procedures Audited Unaudited 2019 2020 Raw Change (Unaudited) (CY-PY (Audited) Account Description $287.95 $1,987.28 PY $2,275.23 TB 10100 Cash on Hand $359,009.40 $557,125.92 TB 10200 Regular Checking Account $198,116,52 PY $0.00 $0.00 PY $0.00 TB 10300 Payroll Checking Account $3,044,958.13 PY $3,645,599.15 TB $600,641.02 10400 Savings Account 11000 Accounts Receivable $16,410,902.71 PY $51,515,259.98 TB $35,104,357.27 $0.00 PY $1,250,000.00 11400 Other Receivables $1,250,000.00 TB 11500 Allowance for Doubtful Accounts (51,262,819.88) PY $23,810.13 (51 239,009.75) TB 12000 Inventory $18,825,205,24 PY $67,724,527.50 TB $48,899,322 26 ($3,012,000.00) PY 12300 Reserve for Inve Par Obsolescence $2,166,000.00 (5846,000.00) TB 14100 Prepaid Insurance $743,314,38 PY $3,424,213.78 TB $2,680,899.40 14200 Prepaid Rent $200,000.00 PY $0.00 TB ($200,000.00) 14300 Office Supplies $7,406.82 PY $8,540.00 TB $1,133.18 14400 Notes Receivable-Current $0.00 PX $0.00 TB $0.00 14700 Other Current Assets $0.00 PY $0.00 TB $0.00 15000 Land $117,000.00 PY $117,000.00 TB $0.00 15100 Buildings and Land Improvements $623,905 92 PY $674,313.92 TB $50,408.00 15200 Machinery, Equipment, Office Furniture $433,217.10 PY $2,929,097.13 TB $2,495,880.03 17000 Accum. Depreciation ($164,000.00) PY (5610,000.00) TB (5446,000.00) 19000 Investments $572,691.08 PY $1,998,780.39 TB $1,426,089 31 19900 Other Noncurrent Assets $53,840.59 PY $53,840.59 TB $0.00 20000 Accounts Payable (54,633,118.09) PY ($1,922,095.91) TB 23100 Sales Tax Payable $2,711,022.18 $0.00 PY $0.00 TB $0.00 23200 Wages Payable ($29,470.32) PY $0.00 TB 23300 FICA Employee Withholding $29,470.32 23350 Medicare Withholding ($1,318.69) PY ($8,43965) TB ($7,120.96) 23400 Federal Payroll Taxes Payable (5583.99) PY ($11,414,99) TB ($10,831.00) 23 500 FUTA Tax Payable ($6,033.01) PY ($118,086,12) TB ($112,053.11) $0.00 PY 23600 State Payroll Taxes Payable $0.00 TB $0.00 23700 SUTA Tax Payable (52,815,47) PY ($55,106.86) TB ($52,291 39) 23800 FICA Employer Withholding $0.00 PY $0.00 TB $0.00 23900 Medicare Employer Withholding ($1,318.69) PY ($8.43965) TB ($583.99) PY (57,120 96) 24100 Line of Credit ($11,414.99) TB ($10,831.00) 24200 Current Portion Long-Term Debt ($10,000,000,00) PY (544,403,000.00) TB (534,403,000.00) 24700 Other Current Liabilities $0.00 PY $0.00 TB $0.00 27000 Notes Payable-Noncurrent $0.00 PY $0.00 TB $0.00 39003. Common Star $0.00 PY ($12,000,000.00) TB ($12,000,000.00) ( I WAN: B-1 Prelim Analytical Procedure 105.000.00TR $0.00 Percent Change (Raw Change PY2 14% 181% 0% 20% 214% E 100% -2% E 260% -72% 361% -100% 15% 0% 0% 0% 8% 576% 272% 249% 0% -59% 0% - 100% 540% 18559 1857% 0% 1857% 0% 540% 1855% 344% 0% 0% #DIV/0! 09A . 27000 Notes Payable-Noncurrent 39003 Common Stock 39004 Paid-in Capital 39005 Retained Earnings 40000 Sales 41000 Sales Returns 42000 Warranty Expense 45000 Income from Investments 46000 Interest Income 47000 Miscellaneous Income 50010 Cost of Goods Sold 57500 Freight 60000 Advertising Expense 61000 Auto Expenses 62000 Research and Development 64000 Depreciation Expense 64500 Warehouse Salaries 65000 Property Tax Expense 66000 Legal and Professional Expense 67000 Bad Debt Expense 68000 Insurance Expense 70000 Maintenance Expense 70100 Utilities 70110 Phone 70120 Postal 71000 Miscellaneous Office Expense 72000 Payroll Tax Exp 73000 Pension/Profit Sharing Plan Ex 78600 Controllers' Clearning Account 74000 Rent or Lease Expense 77500 Administrative Wages Expense 78000 Interest Expense 78500 Income Tax Expense - Federal 78510 Income Tax Expense - Stato 80000 Loss on Legal Settlement $0.00 PY ($12,000,000.00) TB (512,000,000.00) ($8,105,000.00) PY ($8,105,000.00) TB $0.00 ($7,423,000.00) PY (57,423,000.00) TB $0.00 ($2,219,120.65) PY ($6,590,483,64) TB (54,371,362.99) ($246,172,918.44) PY (5242,713,452.88) TB $3,459,465.56 $4,497,583.20 PY $11,100,220.89 TB $6,602,637.69 $1,100,281.48 PY $1,158,128.47 TB $57,846.99 $0.00 PY ($1.426.089.31) TB ($1.426,08931) ($204,302.81) PY ($131,881.46) TB $72,421.35 $0.00 PY ($2,166,000.00) TB ($2,166,000.00) $141,569,221.61 PY $130.196,645.26 TB ($11,372,576.35) $4,302,951.46 PY $4,240,263.09 TB (562,688 37) $897,140.01 PY $1,036,854.01 TB $139,714.00 $208,974,39 PY $210,502.80 TB $1,528.41 $31,212,334.17 PY $528,870.44 TB ($30,683,463.73) $133,000.00 PY $446,000.00 TB $313,000.00 $4,633,383.82 PY $4,720,715.56 TB $87,331.74 $80,495,32 PY $99,332.45 TB $18,837.13 $3,605,133.96 PY $4,913,224.45 TB $1,308,090.49 $1,622,425.99 PY $0.00 TB ($1,622,425.99) $853,942.65 PY $36,106.92 TB (5817,835 73) $61,136.04 PY $35,502.87 TB ($25,633.17) $135,642.99 PY $137,332.18 TB $1,689 19 $76,373.78 PY $52,599.02 TB ($23,774.76) $128,033.21 PY $77,803.61 TB ($50,229.60) $17,023.27 PY $24,891.82 TB $7,868.55 $1,550,989.06 PY $1,577,811.85 TB $26,822.79 $3,000,000.00 PY $3,630,375.80 TB $630,375.80 $0.00 PY ($330,375.80) TB ($330,375.80) $2,603,485.87 PY $1,206,574.00 TB ($1,396,911.87 $16,875,305.98 PY $16,197,225.43 TB (5678,080 55) $875,000.00 PY $2,591,736.50 TB $1,716,736.50 $2,365,000.00 PY $8,900,000.00 TB $6,535,000.00 $429,000.00 PY $3,100,000.00 TB $2,671,000.00 $19,172,000.00 PY $0.00 TB (519,172,000.00) $0.00 #DIV/0! 0% 0% 197% -1% E 147% 5% 100% -35% 100% -8% -1% 16% 1% -98% 235% 2% 23% 36% -100% E -96% 4296 1% -31% -39% 469 296 21% 100% -54% -4% 1966 276% 6239 . 3 -10096 5 $0.00 Example) The auditor notes a significant increase in AR (214%) while Sales remain relatively constant (-1%). One reason we see this unexpected change in AR without a supporting change in sales is that the credit policy changed and credit sales were extended to lower quality customers who have been less likely to remit payment. Further investigation will be performed. Another reason we may see the change is that some uncollectible accounts in AR were not removed, we note a supporting decrease in Bad Debt Expense which has no balance for the current year. This raises the risk of material misstatement associated with AR and the ADA and BDE. A) I I B) C) n radno 0 Instructions: For this assignment you'll chose three different relationships (A, B, and c) from the trial balance (a relationship - 2 or more accounts) and hypothesize at least two reasons we see the change we do, as well as if you think RMM should increase, decrease or remain neutral. Use your GAAP knowiedge and your business acumen to appropriately address what may or may not be expected. You are free to use any information available to you either via the memos or the competitor financial statements. Don't know where to begin? Hint: It is useful to first figure out what the company does... Account ID Apollo Shoes, Inc Preliminary Analytical Procedures Audited Unaudited 2019 2020 Raw Change (Unaudited) (CY-PY (Audited) Account Description $287.95 $1,987.28 PY $2,275.23 TB 10100 Cash on Hand $359,009.40 $557,125.92 TB 10200 Regular Checking Account $198,116,52 PY $0.00 $0.00 PY $0.00 TB 10300 Payroll Checking Account $3,044,958.13 PY $3,645,599.15 TB $600,641.02 10400 Savings Account 11000 Accounts Receivable $16,410,902.71 PY $51,515,259.98 TB $35,104,357.27 $0.00 PY $1,250,000.00 11400 Other Receivables $1,250,000.00 TB 11500 Allowance for Doubtful Accounts (51,262,819.88) PY $23,810.13 (51 239,009.75) TB 12000 Inventory $18,825,205,24 PY $67,724,527.50 TB $48,899,322 26 ($3,012,000.00) PY 12300 Reserve for Inve Par Obsolescence $2,166,000.00 (5846,000.00) TB 14100 Prepaid Insurance $743,314,38 PY $3,424,213.78 TB $2,680,899.40 14200 Prepaid Rent $200,000.00 PY $0.00 TB ($200,000.00) 14300 Office Supplies $7,406.82 PY $8,540.00 TB $1,133.18 14400 Notes Receivable-Current $0.00 PX $0.00 TB $0.00 14700 Other Current Assets $0.00 PY $0.00 TB $0.00 15000 Land $117,000.00 PY $117,000.00 TB $0.00 15100 Buildings and Land Improvements $623,905 92 PY $674,313.92 TB $50,408.00 15200 Machinery, Equipment, Office Furniture $433,217.10 PY $2,929,097.13 TB $2,495,880.03 17000 Accum. Depreciation ($164,000.00) PY (5610,000.00) TB (5446,000.00) 19000 Investments $572,691.08 PY $1,998,780.39 TB $1,426,089 31 19900 Other Noncurrent Assets $53,840.59 PY $53,840.59 TB $0.00 20000 Accounts Payable (54,633,118.09) PY ($1,922,095.91) TB 23100 Sales Tax Payable $2,711,022.18 $0.00 PY $0.00 TB $0.00 23200 Wages Payable ($29,470.32) PY $0.00 TB 23300 FICA Employee Withholding $29,470.32 23350 Medicare Withholding ($1,318.69) PY ($8,43965) TB ($7,120.96) 23400 Federal Payroll Taxes Payable (5583.99) PY ($11,414,99) TB ($10,831.00) 23 500 FUTA Tax Payable ($6,033.01) PY ($118,086,12) TB ($112,053.11) $0.00 PY 23600 State Payroll Taxes Payable $0.00 TB $0.00 23700 SUTA Tax Payable (52,815,47) PY ($55,106.86) TB ($52,291 39) 23800 FICA Employer Withholding $0.00 PY $0.00 TB $0.00 23900 Medicare Employer Withholding ($1,318.69) PY ($8.43965) TB ($583.99) PY (57,120 96) 24100 Line of Credit ($11,414.99) TB ($10,831.00) 24200 Current Portion Long-Term Debt ($10,000,000,00) PY (544,403,000.00) TB (534,403,000.00) 24700 Other Current Liabilities $0.00 PY $0.00 TB $0.00 27000 Notes Payable-Noncurrent $0.00 PY $0.00 TB $0.00 39003. Common Star $0.00 PY ($12,000,000.00) TB ($12,000,000.00) ( I WAN: B-1 Prelim Analytical Procedure 105.000.00TR $0.00 Percent Change (Raw Change PY2 14% 181% 0% 20% 214% E 100% -2% E 260% -72% 361% -100% 15% 0% 0% 0% 8% 576% 272% 249% 0% -59% 0% - 100% 540% 18559 1857% 0% 1857% 0% 540% 1855% 344% 0% 0% #DIV/0! 09A . 27000 Notes Payable-Noncurrent 39003 Common Stock 39004 Paid-in Capital 39005 Retained Earnings 40000 Sales 41000 Sales Returns 42000 Warranty Expense 45000 Income from Investments 46000 Interest Income 47000 Miscellaneous Income 50010 Cost of Goods Sold 57500 Freight 60000 Advertising Expense 61000 Auto Expenses 62000 Research and Development 64000 Depreciation Expense 64500 Warehouse Salaries 65000 Property Tax Expense 66000 Legal and Professional Expense 67000 Bad Debt Expense 68000 Insurance Expense 70000 Maintenance Expense 70100 Utilities 70110 Phone 70120 Postal 71000 Miscellaneous Office Expense 72000 Payroll Tax Exp 73000 Pension/Profit Sharing Plan Ex 78600 Controllers' Clearning Account 74000 Rent or Lease Expense 77500 Administrative Wages Expense 78000 Interest Expense 78500 Income Tax Expense - Federal 78510 Income Tax Expense - Stato 80000 Loss on Legal Settlement $0.00 PY ($12,000,000.00) TB (512,000,000.00) ($8,105,000.00) PY ($8,105,000.00) TB $0.00 ($7,423,000.00) PY (57,423,000.00) TB $0.00 ($2,219,120.65) PY ($6,590,483,64) TB (54,371,362.99) ($246,172,918.44) PY (5242,713,452.88) TB $3,459,465.56 $4,497,583.20 PY $11,100,220.89 TB $6,602,637.69 $1,100,281.48 PY $1,158,128.47 TB $57,846.99 $0.00 PY ($1.426.089.31) TB ($1.426,08931) ($204,302.81) PY ($131,881.46) TB $72,421.35 $0.00 PY ($2,166,000.00) TB ($2,166,000.00) $141,569,221.61 PY $130.196,645.26 TB ($11,372,576.35) $4,302,951.46 PY $4,240,263.09 TB (562,688 37) $897,140.01 PY $1,036,854.01 TB $139,714.00 $208,974,39 PY $210,502.80 TB $1,528.41 $31,212,334.17 PY $528,870.44 TB ($30,683,463.73) $133,000.00 PY $446,000.00 TB $313,000.00 $4,633,383.82 PY $4,720,715.56 TB $87,331.74 $80,495,32 PY $99,332.45 TB $18,837.13 $3,605,133.96 PY $4,913,224.45 TB $1,308,090.49 $1,622,425.99 PY $0.00 TB ($1,622,425.99) $853,942.65 PY $36,106.92 TB (5817,835 73) $61,136.04 PY $35,502.87 TB ($25,633.17) $135,642.99 PY $137,332.18 TB $1,689 19 $76,373.78 PY $52,599.02 TB ($23,774.76) $128,033.21 PY $77,803.61 TB ($50,229.60) $17,023.27 PY $24,891.82 TB $7,868.55 $1,550,989.06 PY $1,577,811.85 TB $26,822.79 $3,000,000.00 PY $3,630,375.80 TB $630,375.80 $0.00 PY ($330,375.80) TB ($330,375.80) $2,603,485.87 PY $1,206,574.00 TB ($1,396,911.87 $16,875,305.98 PY $16,197,225.43 TB (5678,080 55) $875,000.00 PY $2,591,736.50 TB $1,716,736.50 $2,365,000.00 PY $8,900,000.00 TB $6,535,000.00 $429,000.00 PY $3,100,000.00 TB $2,671,000.00 $19,172,000.00 PY $0.00 TB (519,172,000.00) $0.00 #DIV/0! 0% 0% 197% -1% E 147% 5% 100% -35% 100% -8% -1% 16% 1% -98% 235% 2% 23% 36% -100% E -96% 4296 1% -31% -39% 469 296 21% 100% -54% -4% 1966 276% 6239 . 3 -10096 5 $0.00 Example) The auditor notes a significant increase in AR (214%) while Sales remain relatively constant (-1%). One reason we see this unexpected change in AR without a supporting change in sales is that the credit policy changed and credit sales were extended to lower quality customers who have been less likely to remit payment. Further investigation will be performed. Another reason we may see the change is that some uncollectible accounts in AR were not removed, we note a supporting decrease in Bad Debt Expense which has no balance for the current year. This raises the risk of material misstatement associated with AR and the ADA and BDE. A) I I B) C) n radno 0
