You work for a CPA firm, and you have been assigned the task of performing the firm's second-year audit of the financial statements of Paul's Guitar Shop, Inc.For each line item in the financial statements, describe the substantive testing you will perform to determine whether these financial statements are materially correct in accordance with U.S. generally accepted accounting principles assuming control risk is high.

Paul's Guitar Shop, Inc.

Income Statement

For the Year Ended December 31, 2015

Revenue:

• Merchandise Sales: $24,800
• Music Lesson Income: $3,000
• Total Revenue: $27,800

Expenses:

• Cost of Goods Sold: $10,200
• Depreciation Expense: $2,000
• Wage Expense: $750
• Rent Expense: $500
• Interest Expense: $500
• Supplies Expense: $500
• Utilities Expense: $400
• Total Expenses: $14,850

Net Income: $12,950