(Audit opinions, LO 5) For each of the following situations, indicate the type of audit opinion that you think would be appropriate. The possible audit opinions are unqualified, qualified, adverse, and denial of an opinion.

a. Instead of using historical cost to value its inventory and capital assets on its balance sheet, Chocolate Cove Corp. used net realizable value, which was significantly higher than the cost of these assets.

b. Kitchimanitou Ltd. complied with GAAP in all material respects except that it expensed $330 worth of office supplies (staplers, hole punches, etc.) rather than capitalizing and amortizing them over their useful lives.

c. The auditor of Salt Harbour Inc. was prevented from determining the amount of inventory the company had at year end and as a result was unable to verify the amount of cost of goods sold, net income, and total assets.

d. Heart’s Desire Inc. refused to write off inventory that in the auditor’s opinion could not be sold. The amount is material and, as a result, the amount of inventory on the balance sheet is overstated and net income is understated. In the auditor’s opinion, except for this item, the financial statements are fair and are in accordance with GAAP.