Question
This is the third year of an audit of Green Lawns Ltd.The company has carved out a new market niche for the delivery of lawn
This is the third year of an audit of Green Lawns Ltd.The company has carved out a new market niche for the delivery of lawn and garden supplies, including links with local companies that provide lawn services.The company made a share issue three years ago and raised sufficient capital to continue operations through this year.You are currently planning the audit of Green Lawns for the year ending 30 June 2021 and have extracted the following financial information: (All figures are in thousands dollar)
2019 Audited
2020 Audited
2021
Draft
Current assets
Cash
1,000
1,000
1,000
Receivables
3,000
6,000
10,000
Inventory
4,000
6,000
11,000
Total current assets
8,000
13,000
22,000
Non-current assets
Plant
10,000
10,000
10,000
Total assets
18,000
23,000
32,000
Current liabilities
Payables
3,000
6,000
12,000
Non-current liabilities
Loans
10,000
12,000
16,000
Total liabilities
13,000
18,000
28,000
Shareholders' equity
5,000
5,000
4,000
Total liabilities and shareholders' equity
18,000
23,000
32,000
Sales
30,000
38,000
46,000
Cost of sales
16,000
20,000
26,000
Gross profit
14,000
18,000
20,000
Less: operating expenses
(6,000)
(8,000)
(10,000)
Net profit
8,000
10,000
10,000
Required:
Apply various analytical procedures to the financial reports of Green Lawns Ltd.Explain how your results influence your planning decisions for the audit for the year ending 30 June 2021.
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Corporate Financial Accounting
Authors: Carl S Warren, Jeff Jones
16th Edition
0357510380, 978-0357510384
