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.