Trace (tie out) 12/31/2019 trial balance amounts to 2019 10-K. Some of the balances will need to be aggregated to tie out to financial reporting format (for example cash). If the balance agrees to the 2019 10-K, document A-1 with A-3 (10-K) Foot (add up) the 12/31/2020 trial balance, aggregate total assets, liabilities, equity, revenue, expenses, and compute unadjusted net income. Document at the bottom of the trial balance workpaper (A-2). Use MS Excel functions to sum accounting elements.
Directions:
Review the following client source documents:
- 2020 Apollo Organization Chart-3.pdf &
- 2020 Apollo Shoes Minutes-2pdf L
Access the following workpaper spreadsheet with audit program and workpapers:
Apollo Planning. Part 2 Audit Mini Case xis
- Check the PBC Trial Balance for accuracy.
Trace the prior period Trial Balance to the prior period 10-K
Prepare the Materiality workpaper.
Transfer items deemed significant to the audit to A-3 from Planning Part I
ADDITIONAL GUIDANCE:
- Review all posted materials related to the case.
Review the instructions, audit program, and workpaper
- Trace (tie out) 12/31/2019 trial balance amounts to 2019 10-K. Some of the balances will need to be aggregated to tie out to financial reporting format (for example - cash). If the balance agrees to the 2019 10-K, document A-1 with A-3 (10-K) . Foot (add up) the 12/31/2020 trial balance, aggregate total assets, liabilities, equity, revenue, expenses, and compute unadjusted net income. Document at the bottom of the trial balance workpaper (A-2). Use MS Excel functions to sum accounting elements.
- Prepare materiality workpaper (A-5).
- Sign-off on audit procedures performed on A-0 as preparer and reviewer with your initials.
Assets Liabilities and Shareholders' Equity For the year ended December 31 , 20192018 Cash Flows from Operating Activities Net Income $4,371 $1,745 Adjustments to Reconcile Net Income to Net Cash Provided Depreciation and Amortization $133 $26 Changes in Operating Assets and Liabilities Decrease (Increase) in Current Assets Accounts Receivable Inventory ($12,410)($2,073) Prepaid Expenses ($1,990)($11,861) ($599) (\$123) Increase (Decrease) in Current Liabilities Accounts Payable and Accrued Expenses Total Adjustments $1,119($13,747)($9,376)$5,504($8,527)($6,782) Net Cash Provided by Operating Activities (\$834) (\$255) Purchase of Other Assets ($54) Net Cash Provided by Investing Activities (\$888) (\$255) Cash Flows from Financing Activities Proceeds from the Issuance of Debt $10,000 Proceeds from the Issuance of Common Stock Net Cash Provided by Financing Activities Net Increase (Decrease) in Cash Cash at Beginning of Year Cash at End of Year \begin{tabular}{rr} $10,000 & $10,533 \\ \hline$264) & $3,496 \\ $3,509 & $13 \\ $3,245 & $3,509 \end{tabular} CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUTTY APOLLO SHOES, INC. in thousands The accompanying notes are an integral part of the consolidated financial statements. ITEM 6. SELECTED FINANCIAL DATA. APOLLO SHOES, INC. in thousands (except per share data) For the year ended December 31 , 20192018 Cash Flows from Operating Activities Net Income $4,371 $1,745 Adjustments to Reconcile Net Income to Net Cash Provided Depreciation and Amortization $133 $26 Changes in Operating Assets and Liabilities Decrease (Increase) in Current Assets Accounts Receivable Inventory ($12,410)($2,073) Prepaid Expenses ($1,990)($11,861) ($599) (\$123) Increase (Decrease) in Current Liabilities Accounts Payable and Accrued Expenses Total Adjustments $1,119($13,747)($9,376)$5,504($8,527)($6,782) Net Cash Provided by Operating Activities (\$834) (\$255) Purchase of Other Assets ($54) Net Cash Provided by Investing Activities (\$888) (\$255) Cash Flows from Financing Activities Proceeds from the Issuance of Debt $10,000 Proceeds from the Issuance of Common Stock Net Cash Provided by Financing Activities Net Increase (Decrease) in Cash Cash at Beginning of Year Cash at End of Year \begin{tabular}{rr} $10,000 & $10,533 \\ \hline$264) & $3,496 \\ $3,509 & $13 \\ $3,245 & $3,509 \end{tabular} PLANNING MATERIALITY CALCULATION Only if the current year net income (loss) (or other measure) is significantly different from the entity's historical results would 2-year averaging to obtain normalized net income (loss) (or other measure) be appropriate. PROFIT ORIENTED ENTITIES Current Year Prior Year Net income (loss) Plus (minus) unusual, non-recurring revenues and expenses, and extraordinary items. ADJUSTED NET INCOME (LOSS) Adjusted net income (loss) multiplied by: \begin{tabular}{|l|r|} \hline & \\ \hline & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline & 5% & 0 \\ \hline \end{tabular} Total assets multiplied by: \begin{tabular}{l} \multicolumn{2}{|c|}{1%} & \multicolumn{2}{c|}{0} \\ \hline \end{tabular} Total adjusted revenues multiplied by: JUSTIFICATION OF PLANNING MATERIALITY 7. Listing scope (amount threshold for suggested adjustments) (using 5\% to 10% of planning materiality based on expected level of adjustments is usually appropriate) Apollo Shoes, Inc Trial Balance (Audited) 31-Dec-19 Preclosing Trial Balance A-2 Assets Liabilities and Shareholders' Equity For the year ended December 31 , 20192018 Cash Flows from Operating Activities Net Income $4,371 $1,745 Adjustments to Reconcile Net Income to Net Cash Provided Depreciation and Amortization $133 $26 Changes in Operating Assets and Liabilities Decrease (Increase) in Current Assets Accounts Receivable Inventory ($12,410)($2,073) Prepaid Expenses ($1,990)($11,861) ($599) (\$123) Increase (Decrease) in Current Liabilities Accounts Payable and Accrued Expenses Total Adjustments $1,119($13,747)($9,376)$5,504($8,527)($6,782) Net Cash Provided by Operating Activities (\$834) (\$255) Purchase of Other Assets ($54) Net Cash Provided by Investing Activities (\$888) (\$255) Cash Flows from Financing Activities Proceeds from the Issuance of Debt $10,000 Proceeds from the Issuance of Common Stock Net Cash Provided by Financing Activities Net Increase (Decrease) in Cash Cash at Beginning of Year Cash at End of Year \begin{tabular}{rr} $10,000 & $10,533 \\ \hline$264) & $3,496 \\ $3,509 & $13 \\ $3,245 & $3,509 \end{tabular} CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUTTY APOLLO SHOES, INC. in thousands The accompanying notes are an integral part of the consolidated financial statements. ITEM 6. SELECTED FINANCIAL DATA. APOLLO SHOES, INC. in thousands (except per share data) For the year ended December 31 , 20192018 Cash Flows from Operating Activities Net Income $4,371 $1,745 Adjustments to Reconcile Net Income to Net Cash Provided Depreciation and Amortization $133 $26 Changes in Operating Assets and Liabilities Decrease (Increase) in Current Assets Accounts Receivable Inventory ($12,410)($2,073) Prepaid Expenses ($1,990)($11,861) ($599) (\$123) Increase (Decrease) in Current Liabilities Accounts Payable and Accrued Expenses Total Adjustments $1,119($13,747)($9,376)$5,504($8,527)($6,782) Net Cash Provided by Operating Activities (\$834) (\$255) Purchase of Other Assets ($54) Net Cash Provided by Investing Activities (\$888) (\$255) Cash Flows from Financing Activities Proceeds from the Issuance of Debt $10,000 Proceeds from the Issuance of Common Stock Net Cash Provided by Financing Activities Net Increase (Decrease) in Cash Cash at Beginning of Year Cash at End of Year \begin{tabular}{rr} $10,000 & $10,533 \\ \hline$264) & $3,496 \\ $3,509 & $13 \\ $3,245 & $3,509 \end{tabular} PLANNING MATERIALITY CALCULATION Only if the current year net income (loss) (or other measure) is significantly different from the entity's historical results would 2-year averaging to obtain normalized net income (loss) (or other measure) be appropriate. PROFIT ORIENTED ENTITIES Current Year Prior Year Net income (loss) Plus (minus) unusual, non-recurring revenues and expenses, and extraordinary items. ADJUSTED NET INCOME (LOSS) Adjusted net income (loss) multiplied by: \begin{tabular}{|l|r|} \hline & \\ \hline & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline & 5% & 0 \\ \hline \end{tabular} Total assets multiplied by: \begin{tabular}{l} \multicolumn{2}{|c|}{1%} & \multicolumn{2}{c|}{0} \\ \hline \end{tabular} Total adjusted revenues multiplied by: JUSTIFICATION OF PLANNING MATERIALITY 7. Listing scope (amount threshold for suggested adjustments) (using 5\% to 10% of planning materiality based on expected level of adjustments is usually appropriate) Apollo Shoes, Inc Trial Balance (Audited) 31-Dec-19 Preclosing Trial Balance A-2
