A
Introduction: The
To describe:The audit procedures that should be employed in examining the described loans.
B
Introduction: The financial disclosure refers to making detailed information available to the investors and other parties. Such disclosure includes providing supporting documents along with the financial statements of the company.
To explain:The financial statement disclosures that would be appropriate for the loans from the president.
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EBK AUDITING & ASSURANCE SERVICES: A SY
- CocoMelon Company is preparing its 2020 financial statement, accounting period ends on December 31. You have been asked to compute the amount included in the "Trade and Other Receivable" of the entity's financial position from the following information: A. A $10,000 check received from a customer dated February 1, 2021 is on hand. B. A customer's check for $20,000 was included in the December 20 deposit. It was returned by the bank stamped "NSF”. No entry had yet been made by Masaya to reflect the return. C. A $50,000 Certificate of Deposits on which $2,000 of interest accrued to December 31 has just been recorded by debiting Interest Receivable and crediting Interest Income. The chief accountant proposes to report the $50,000 as "Cash in Bank”. D. Masaya has a $5,000 petty cash fund. As of December 31, the fund custodian reported expense vouchers covering various expenses in the amount of $4,570 and cash of $420. E. Postage stamps that costs $100 are in the cash drawer. F. A cashier's…arrow_forwardSheridan Company obtains $36,800 in cash by signing a 7%, 6-month, $36,800 note payable to First Bank on July 1. Sheridan's fiscal year ends on September 30. What information should be reported for the note payable in the annual financial statements? In the balance sheet, Notes Payable of $ reported as In the income statement, Interest Expense of $ and Interest Payable of $ should be reported under should bearrow_forwardLong-Term Financing Agreement. You have been engaged to audit the financial statements of Broadwall Corporation for the year ended December 31, 2017. During the year, Broadwall obtained a long-term loan from a local bank pursuant to a financing agreement, which provided the following:1. The loan is to be secured by the company’s inventory and accounts receivable.2. The company is to maintain a debt:equity ratio not to exceed 2:1.3. The company is not to pay dividends without permission from the bank.4. Monthly installment payments are to commence July 1, 2017. In addition, during the year, the company also borrowed, on a short-term basis, substantial amounts just prior to the year-end from the president of the company. Required:a. For the purposes of your audit of the Broadwall Corporation’s financial statements, what procedures should you employ in examining the described loans? Do not discuss internal control.b. What are the financial statement disclosures that you should expect to…arrow_forward
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