You recently joined the internal auditing department of Marcus Clothing Corporation As one of your first assignments, you are examining a balance sheet prepared by a staff accountant In the course of your examination you uncover the following information pertaining to the balance sheet 1 The compan...

DEFICIENCIES 1 Accounts receivable if material the allowance for uncollectible accounts should be di ...

You recently joined the internal auditing department of Marcus Clothing Corporation. As one of your first assignments,

Question:

You recently joined the internal auditing department of Marcus Clothing Corporation. As one of your first assignments, you are examining a prepared by a staff accountant.

In the course of your examination you uncover the following information pertaining to the The company rents its facilities. The land that appears in the statement is being held for future sale.
2. The note receivable is due in 2013. The balance of $53,000 includes $3,000 of accrued interest. The next interest payment is due in July 2012.
3. The note payable is due in installments of $20,000 per year. Interest on both the notes and bonds is payable annually.
4. The company's investments consist of marketable equity securities of other corporations. Management does not intend to liquidate any investments in the coming year.

Required:
Identify and explain the deficiencies in the statement prepared by the company's accountant. Include in your answer items that require additional disclosure, either on the face of the statement or in a note.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...