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WP 11 BILTRITE BICYCLES, INC. Prepared by: Plant Assets and Accumulated Depreciation - Lead Schedule Date: December 31, 2009 Reviewed by: Date: ASSETS - -
WP 11 BILTRITE BICYCLES, INC. | Prepared by: | ||||||||
Plant Assets and Accumulated Depreciation - Lead Schedule | Date: | ||||||||
December 31, 2009 | Reviewed by: | ||||||||
Date: | |||||||||
ASSETS | |||||||||
- | - | - | - | - | - | ||||
12/31/2008 | 2009 | 2009 | 12/31/2009 | Audit | Audited | Workpaper | |||
Balance | Additions | Disposals | Balance | Adjustments | Balance | Reference | |||
Land | $4,000,000 | $0 | $0 | $4,000,000 | $4,000,000 | 11.1 | |||
Factory Building | $50,000,000 | $0 | $0 | $50,000,000 | $50,000,000 | 11.2 | |||
Warehouses and Sales Offices | $200,000,000 | $200,000,000 | $200,000,000 | 11.3 | |||||
Factory Equipment | $320,000,000 | $89,860,000 | ($49,860,000) | $360,000,000 | (1) | $360,000,000 | 11.4 | ||
Office Building | $20,000,000 | $0 | $0 | $20,000,000 | $20,000,000 | 11.5 | |||
Office Fixtures and Equipment | $9,000,000 | $2,000,000 | ($1,000,000) | $10,000,000 | $10,000,000 | 11.6 | |||
Autos and Trucks | $900,000 | $100,000 | $0 | $1,000,000 | $1,000,000 | 11.7 | |||
- | - | - | - | - | - | ||||
$603,900,000 | $91,960,000 | ($50,860,000) | $645,000,000 | $0 | $645,000,000 | ||||
= | = | = | = | = | = | ||||
ACCUMULATED DEPRECIATION | |||||||||
- | - | - | - | - | - | ||||
12/31/2008 | 2009 | 2009 | 12/31/2009 | Audit | Audited | Workpaper | |||
Balance | Additions | Disposals | Balance | Adjustments | Balance | Reference | |||
Factory Building | $12,140,000 | $2,000,000 | $14,140,000 | $14,140,000 | 11.2 | ||||
Warehouses and Sales Offices | $95,000,000 | $10,000,000 | $105,000,000 | $105,000,000 | 11.3 | ||||
Factory Equipment | $147,460,000 | $42,060,000 | ($44,860,000) | $144,660,000 | (10) | ||||
(11) | $144,660,000 | 11.4 | |||||||
Office Building | $7,200,000 | $800,000 | $8,000,000 | $8,000,000 | 11.5 | ||||
Office Fixtures and Equipment | $5,075,000 | $1,875,000 | ($800,000) | $6,150,000 | $6,150,000 | 11.6 | |||
Autos and Trucks | $300,000 | $320,000 | $620,000 | $620,000 | 11.7 | ||||
- | - | - | - | - | - | ||||
$267,175,000 | $57,055,000 | ($45,660,000) | $278,570,000 | $0 | $278,570,000 | ||||
= | = | = | = | = | = | ||||
WP 11.4 BILTRITE BICYCLES, INC. | Prepared by: | ||||||||
Factory Equipment - Additions and Disposals | Date: | ||||||||
December 31, 2009 | Reviewed by: | ||||||||
Date: | |||||||||
ACCUMULATED | GAIN/(LOSS) | ||||||||
ASSET | DEPRECIATION | ON DISPOSAL | |||||||
12/31/08 Audited Balance | $320,000,000 | > | $147,460,000 | > | |||||
2009 Additions: | |||||||||
Assembly Line #1 refurbishing | $15,600,000 | W | |||||||
Assembly Line #2 refurbishing | $22,340,000 | W | |||||||
Ransport computerized paint system | $16,800,000 | E | |||||||
Welding equipment for lines 1 and 2 | $5,760,000 | E | |||||||
Computerized quality control system | $11,110,000 | E | |||||||
Stamping and forming equipment for | |||||||||
one-piece frame | $5,650,000 | E | |||||||
Additions sampled (See WP 11.3) | $12,600,000 | ||||||||
- | |||||||||
Beginning Balance plus Additions | $409,860,000 | ||||||||
2009 Disposals: | |||||||||
Assembly Lines 1 and 2 equipment | ($28,360,000) | ($26,345,000) | |||||||
Paint system | ($12,630,000) | ($12,360,000) | |||||||
Welding equipment | ($3,990,000) | ($2,955,000) | |||||||
Presses and forming equipment | ($4,880,000) | ($3,200,000) | $4,000,000 | ||||||
2009 Depreciation Provision | $42,060,000 | # | |||||||
- | - | - | |||||||
12/31/09 Ledger Balance | $360,000,000 | * | $144,660,000 | * | $4,000,000 | * | |||
Audit Adjustments: | |||||||||
AJE 1 | |||||||||
AJE 10 | |||||||||
AJE 11 | |||||||||
- | - | - | |||||||
12/31/09 Audited Balance | $360,000,000 | $144,660,000 | $4,000,000 | ||||||
= | = | = | |||||||
WP 11 | WP 11 | ||||||||
Recalculation of gain on disposal: | |||||||||
Cost of equipment acquired in various years | $49,860,000 | & | Biltrite Journal Entry: | ||||||
Accumulated depreciation (including 1/2 year in 2007) | $41,770,000 | % | |||||||
- | Cash | $9,000,000 | |||||||
Book value | $8,090,000 | Accumulated Depreciation-FE | $44,860,000 | ||||||
Selling price | $9,000,000 | R | Factory Equipment | $49,860,000 | |||||
- | Gain on Disposal | $4,000,000 | |||||||
Gain | $910,000 | ||||||||
Per general ledger | $4,000,000 | Correct Entry: | |||||||
- | |||||||||
Error | ($3,090,000) | Cash | $9,000,000 | ||||||
= | Accumulated Depreciation-FE | $41,770,000 | |||||||
Audit Adjustment No. 10 | Factory Equipment | $49,860,000 | |||||||
Gain on Disposal | $910,000 | ||||||||
9485 Gain/Loss on Disposal of Plant Assets | |||||||||
1535 Accumulated Depreciation-Factory Equipment | |||||||||
To correct for error in calculating accumulated depreciation | |||||||||
on disposals of factory equipment. | |||||||||
Audit Adjustment No. 11 | |||||||||
5300 Cost of Goods Sold-Pike's Peak Mountain Bike | |||||||||
1535 Accumulated Depreciation-Factory Equipment | |||||||||
To correct for underdepreciation on the excess of | |||||||||
additions over disposals. | |||||||||
Explanation of audit legends: | |||||||||
> Traced to 2008 audit workpapers and 1/1/09 ledger balance | |||||||||
W Examined work orders and traced: | |||||||||
Materials to materials requisitions and invoices | |||||||||
Direct labor to time cards | |||||||||
Direct and indirect overhead to company analyses | |||||||||
E Examined underlying documentation | |||||||||
# Recalculated | |||||||||
* Traced to 12/31/09 general ledger | |||||||||
& Traced to plant assets ledger | |||||||||
R Examined remittance advice and bank statement | |||||||||
% Traced to 12/31/08 plant assets ledger and calculated | |||||||||
1/2 year's depreciation for 2009 | |||||||||
. In recording the 2009 disposals, Janel James, Biltrites plant assets accountant, miscalculated the accumulated depreciation on the assets sold and thereby overstated the gain on disposal by $3,090,000. Draft Audit Adjustment 10 at the bottom of WP 11.4 to correct for this misstatement. In addition, James did not change the standard journal entry for monthly depreciation to reflect additions and disposals during the year. As a result depreciation expense for the year is understated by $800,000. Biltrite depreciates factory equipment on a straight-line basis over a ten-year estimated useful life with zero salvage value. One-half years depreciation is taken on all additions and disposals. Draft Audit Adjustment 11 at the bottom of WP 11.4 to reflect the depreciation understatement. In recording the under-depreciation, debit account 5300,Cost of Goods SoldPikes Peak Mountain Bike, inasmuch as all overhead accounts have been closed. Any further adjustments, therefore, must be reflected in the cost of sales accounts. Although in Module IV we allocated the adjustment to the five product cost of sales accounts, the present adjustment is less significant in amount, and therefore we will reflect the entire amount in account 5300. (Note: Dont forget to enter Audit Adjustments 1, 10, and 11 in the body of the document to arrive at correct adjusted balances.) 3. Scroll to WP 11,Plant Assets and Accumulated DepreciationLead Schedule. Post Audit Adjustments 10 and 11 to the lead schedule. | |||||||||
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