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Exercise 1. using the information presented in Exhibits 3-2 through 3-7 IQ, perform the following analytical procedures See templates ICase3xls) a. Compute the financial ratios listed in Exhibit 3-2 for Lakeside for the years ending December 31 , 2010 and December 31, 2011 Comment on any large luctuations, unusual fluctuations, or lack of expected fluctuations. Also, give an overa// conclusion as to the significance of the change in Lakeside's liquidity, solvency, and profitability positions from 2010 to 2011 _ use the following format for your answer 2010 2011 Significance of Change No significant fluctuation, indicating a stable liquidity position (based on this measure of liquidity) b. Compare the year 2011 financial ratios computed for Lakeside above to the industry average ratios included in Exhibit 3-3 Comment on any large luctuations, unusual fluctuations, or lack of expected fluctuations Also, give an overall conclusion as to the significance of the difference between Lakeside's liquidity, solvency, and profitability positions in 2011 and the industry average position. Use the following format for your answers. Industry Ave. 2.16 Lakeside 2011 Significance of Change Lakeside is below the industry average This may indicate short-term solvency problems c. Scan each of the financial statements and the trial balances included in Exhibits 3-4 through 3-7 Comment on any unusual accounts, account balances; or large, unusual, or lack of expected fluctuations from the previous year. You should find at least 10 items. Organize your answer as follows: P rocedure Scan the trial balances. Findings A debit balance appears the "Allowance for Doubtful Accounts" account [Note: you may have more than one "finding' for each procedure]. Significance Bad accounts may be ficreasing or a debit entry may have been misposted 2. Determine the appropriate level of inherent risk for the Lakeside Engagement as a whole, using qualitative terms (high, moderate, or low inherent risk). Based upon an analysis ofthe information in this case, Case 1 and Case 2 is the inherent risk for the Lakeside Company as a whole high, moderate or low? Fully support and discuss your analysis of inherent risk Document your anatysis of inherent risk by completing the form in Exhibit 3-81@_ The first line is completed for you as an example