Use analytic procedures for those that should be comparable to those in the previous year. For example, for the payroll taxes, compare last year's numbers as a percentage (ratio) of payroll expense and compare to this year's ratio. Cost of Goods Sold should remain relatively constant as a percentage of sales, unless suppliers' costs have gone up or sales prices have changed. The same should be true for freight and warranty expenses

Apollo Shoes, Inc.

Schedule of Expenses Prepared by

For Year Ended 12/31/2006 Reviewed by

PBC

(Audited) Unaudited

Balance Balance

Acct # Account Title 12/31/2006 12/31/2007 Comments

50000 Cost of Goods Sold $141,569,221.61 $130,246,645.26

57500 Freight $4,302,951.46 $4,236,263.09

60000 Advertising Expense $897,140.01 $986,854.01

61000 Auto Expenses $208,974.39 $214,502.80

62000 Research and Development $31,212,334.17 $212,864.02

64000 Depreciation Expense $133,000.00 $446,000.00

64500 Warehouse Salaries $4,633,383.82 $4,720,715.56

65000 Property Tax Expense $80,495.32 $84,332.45

66000 Legal and Prof Expense $3,605,133.96 $1,902,224.45

67000 Bad Debt Expense $1,622,425.99 $0.00

68000 Insurance Expense $853,942.65 $36,106.92

70000 Maintenance Expense $61,136.04 $49,502.87

70100 Utilities $135,642.99 $137,332.18

70110 Telephone Expense $76,373.78 $52,599.02

70120 Postage Expense $128,033.21 $77,803.61

71000 Miscellaneous Office Expense $17,023.27 $24,891.82

72000 Payroll Tax Exp $1,550,989.06 $1,577,811.85

73000 Pension/Profit-Sharing Plan Ex $3,000,000.00 $3,300,000.00

74000 Rent or Lease Expense $2,603,485.87 $1,203,574.00

77500 Administrative Wages Expense $16,875,305.98 $16,197,225.43

78000 Interest Expense $875,000.00 $2,591,736.50

78500 Income Tax Expense - Federal $2,365,000.00 $13,069,000.00

78510 Income Tax Expense - State $429,000.00 $2,241,000.00

89000 Other Expense $19,172,000.00 $0.00

$236,407,993.58 $183,608,985.84