Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 15, Problem 22RQ
To determine
Explain the procedure to verify the recording of dividend entry in the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
In the course of your audit of the financial statements of Apayao Corp. for the period ended December 31, 2021, you gathered the following information regarding the entitiy’s current account in BPI:
Balances taken from the company’s general ledger:
Cash balance, November 30, 2021
P629,860
Cash balance, December 31, 2021
576,420
Receipts, December 1 – 31, 2021
306,220
Balances taken from the December bank statement:
Bank balance, November 30, 2021
P685,180
Bank balance, December 31, 2021
637,220
Disbursements (debit)
356,080
Outstanding checks, November 30, 2021 (P26,140 was paid by the bank in December), P72,140.
Deposit in transit, November 30, 2021, P15,260.
A bank credit memo was issued in December to correct an erroneous charge made in November, P1,500.
Note collected by bank in December (company was not informed of the collection), P2,060.
A check for P2,020 (payable to a supplier) was recorded in the Check Register in…
In the course of your audit of the financial statements of Apayao Corp. for the period ended December 31, 2021, you gathered the following information regarding the entitiy’s current account in BPI:
Balances taken from the company’s general ledger:
Cash balance, November 30, 2021
P629,860
Cash balance, December 31, 2021
576,420
Receipts, December 1 – 31, 2021
306,220
Balances taken from the December bank statement:
Bank balance, November 30, 2021
P685,180
Bank balance, December 31, 2021
637,220
Disbursements (debit)
356,080
Outstanding checks, November 30, 2021 (P26,140 was paid by the bank in December), P72,140.
Deposit in transit, November 30, 2021, P15,260.
A bank credit memo was issued in December to correct an erroneous charge made in November, P1,500.
Note collected by bank in December (company was not informed of the collection), P2,060.
A check for P2,020 (payable to a supplier) was recorded in the Check Register in…
In the course of your audit of the financial statements of Apayao Corp. for the period ended December 31, 2021, you gathered the following information regarding the entitiy’s current account in BPI:
Balances taken from the company’s general ledger:
Cash balance, November 30, 2021
P629,860
Cash balance, December 31, 2021
576,420
Receipts, December 1 – 31, 2021
306,220
Balances taken from the December bank statement:
Bank balance, November 30, 2021
P685,180
Bank balance, December 31, 2021
637,220
Disbursements (debit)
356,080
Outstanding checks, November 30, 2021 (P26,140 was paid by the bank in December), P72,140.
Deposit in transit, November 30, 2021, P15,260.
A bank credit memo was issued in December to correct an erroneous charge made in November, P1,500.
Note collected by bank in December (company was not informed of the collection), P2,060.
A check for P2,020 (payable to a supplier) was recorded in the Check Register in…
Chapter 15 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 15 - What does the trust indenture used by a...Ch. 15 - Long-term creditors often insist upon placing...Ch. 15 - Prob. 3RQCh. 15 - Prob. 4RQCh. 15 - Prob. 5RQCh. 15 - Prob. 6RQCh. 15 - Prob. 7RQCh. 15 - Prob. 8RQCh. 15 - Prob. 9RQCh. 15 - Prob. 10RQ
Ch. 15 - Mansfield Corporation has outstanding an issue of...Ch. 15 - Prob. 12RQCh. 15 - Prob. 13RQCh. 15 - What do you consider to be the most important...Ch. 15 - What is the primary responsibility of an...Ch. 15 - In the audit of a small corporation that issues...Ch. 15 - Prob. 17RQCh. 15 - Prob. 18RQCh. 15 - Prob. 19RQCh. 15 - Corporations sometimes issue their own capital...Ch. 15 - Prob. 21RQCh. 15 - Prob. 22RQCh. 15 - Prob. 23RQCh. 15 - Prob. 24RQCh. 15 - Prob. 25RQCh. 15 - Prob. 26RQCh. 15 - Prob. 27QRACh. 15 - Prob. 28QRACh. 15 - Prob. 29QRACh. 15 - You are retained by Columbia Corporation to audit...Ch. 15 - Prob. 31QRACh. 15 - Prob. 32AOQCh. 15 - Prob. 32BOQCh. 15 - Prob. 32COQCh. 15 - Prob. 32DOQCh. 15 - Prob. 32EOQCh. 15 - When a client uses paper stock certificates, an...Ch. 15 - Prob. 32GOQCh. 15 - The auditors can best verify a clients bond...Ch. 15 - Prob. 32IOQCh. 15 - All corporate capital stock transactions should...Ch. 15 - Prob. 32KOQCh. 15 - Prob. 32LOQCh. 15 - Prob. 32MOQCh. 15 - Prob. 32NOQCh. 15 - Prob. 32OOQCh. 15 - An auditor most likely would inspect loan...Ch. 15 - Prob. 32QOQCh. 15 - Match the following definitions (or partial...Ch. 15 - Prob. 34PCh. 15 - Prob. 35PCh. 15 - Prob. 36PCh. 15 - Prob. 37P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- In the course of your audit of the financial statements of Apayao Corp. for the period ended December 31, 2021, you gathered the following information regarding the entitiy's current account in BPI: • Balances taken from the company's general ledger: Cash balance, November 30, 2021 P629,860 Cash balance, December 31, 2021 576,420 Receipts, December 1 31, 2021 306,220 o Balances taken from the December bank statement: Bank balance, November 30, 2021 P685,180 Bank balance, December 31, 2021 637,220 Disbursements (debit) 356,080 Outstanding checks, November 30, 2021 (P26,140 was paid by the bank in December), P72,140. o Deposit in transit, November 30, 2021, P15,260. o A bank credit memo was issued in December to correct an erroneous charge made in November, P1,500. o Note collected by bank in December (company was not informed of the collection), P2,060. • A check for P2,020 (payable to a supplier) was recorded in the Check Register in December as P3,000. • A check for P2,240 was charged…arrow_forwardJones was engaged to examine the financial statements of Gamma Corporation for the year ended June 30. Having completed an examination of the investment securities, which of the following is the best method of verifying the accuracy of recorded dividend income?a. Tracing recorded dividend income to cash receipts records and validated deposit slips.b. Performing analytical procedures and statistical sampling.c. Comparing recorded dividends with amounts appearing on federal information Form 1099.d. Comparing recorded dividends with a standard financial reporting service’s record of dividends.arrow_forwardAssume that you have audited accounts receivable as of 12/31/2020 and are confident that the ending balance should be $7,188,000. Further, you know that the audited balance as of 12/31/2019 was $8,462,000. You also verified cash deposits from customers through a review of the bank account. Based on that review you believe that cash receipts from customers ranges from an amount of $40,000,000 to $41,000,000. Which amount below would represent an overstatement of revenue for the year ending 12/31/2020, based on the facts above? 1. $38,500,000 2. $41,000,000 3. $39,762,000 4. $39,100,000arrow_forward
- You are an auditor in public accounting firm and you are auditing the client's financial statements. Your client is finance company which provide credit for home appliance equipment purchase to end users. You know certainty that the identified user of the financial statement is the bank who has been the client creditors for several years. Client take a bank loan to financing their business and working capital. Client use the account receivable originally from credit sales as collateral to bank loan. When you audit account receivable materiality is set at 5%, after you have finish the audit procedures, there are found misstatements on this account receivable, and the total misstatement is 3%. What is your decision about this finding, will you conclude this as material or not? Explain the concept of materiality in this case!arrow_forwardConsider the annual report of commonwealth bank or any company (most companies make their annual reports available on the company's website) and find the disclosures explaining the amounts paid to auditors. How much was the auditor paid for the audit, non-assurance, or other services?arrow_forwardAssume that a continuing audit client has recorded Accounts Receivable and Equipment both in the amount of $1,000,000. In a typical audit, which account would take more time to audit?arrow_forward
- In the process of your examination of the financial statements of the Malu-oy Company for the year ended December 31, 20X6, you obtained the following data on its current account. The bank statement on November 30, 20X6 showed a balance of P76,500. Among the bank credits in November was a customer’s note for P25,000 collected for the account of the company which the company recognized in December among its receipts. Included on the bank debits were cost of checkbooks amounting to P300 and a P10,000 check which was charged by the bank in error against Malu-oy Company account. Also in November, you ascertained that there were deposits in transit amounting to P20,000 and outstanding checks totaling P42,500. The bank statement for the month of December showed total credit of P104,000 and total charges of P51,000. The company’s books for December showed total receipts of P183,900, disbursements of P101,800 and a balance of P121,400. Bank debit memos for December were: No. 14334 for service…arrow_forwardYou obtained the following information on the current account of Par Company during your examination of its financial statements for the year ended December 31, 2021. The bank statement on November 30, 2021 showed a balance of P 306,000 . Among the bank credits in November was customer’s noted for P 100,000 collected for the account of the company which the company recognized in December among its receipts. Included in the bank debits were costs of checkbooks amounting to P 1,200 and a P 40,000 check which was charged by the bank in error against Par Company account. Also in November, you ascertained that there were deposits in transit amounting to P 80,000 and outstanding checks totaling P 170,000. The bank statement for the month of December showed total credits of P 416,000 and total charges of P 204,000. The company’s books for December showed total debits of P 735,600 , total credits of P 407,200 and a balance of P485,600. Bank debit memos for December were: No. 121 for service…arrow_forward1. In auditing the Maranao Company, you obtain directly from the bank, with which it does business, the bank statement, canceled checks, and other memoranda which relate to the company's bank account, for December 2021. In reconciling the bank balance at December 31, 2021 with that shown on the company's book, you observe the facts set forth below: Balance per bank statement, 12/31/21 Balance per book, 12/31/2021 Outstanding checks, 12/31/21 Receipts of 12/31/21 deposited 1/02/2022 Service Charge for Nov. 2021 per Bank Memo of 12/15/21 Proceeds of Bank Loan, 12/15/21, discounted for 3 months at 25% per annum, omitted from company's books Deposit of 12/23/21 omitted from Bank Statement Check of Tote's Products Co., charged back on 12/22/21 of absence of 88,219.12 58,983.46 32,108.42 4 5,317.20 3.85 9,875.00 7 2,892.41 counter-signature and redeposited with complete signature on 8 01/5/22,; no entry on the books having been made for the charge back or the redeposit 417.50 Error on Bank…arrow_forward
- Use the following information for the next five questions. Presented below are relevant extracts from TIYAGA Company's statement of financial position as of December 31, 2023. Cash and cash equivalents Trade and other receivables Inventories Page 1 of 3- AUDITING AND ASSURANCE: CONCEPTS AND APPLICATIONS 1 ● ● During the course of your audit, you noted the following. Cash and cash equivalents The following were included in Cash and cash equivalents: Customer's check for P100,000 returned by bank on December 29, 2023 due to insufficient fund but subsequently redeposited and cleared by the bank on January 3, 2024. Customer's check for P200,000 dated January 2, 2024, received on December 29, 2023. Cash earmarked for bonds payable due on June 30, 2024, P5,000,000. P1,000,000 of compensating balance against short-term borrowing arrangement at December 31, 2023. The compensating balance is legally restricted as to withdrawal. ● Check written and dated December 29, 2023 and delivered to payee…arrow_forwardYou are the audit team assign to audit the unaudited set of financial statements for XYZ Company Ltd. for year ended 30 June 2002. Prepare written report to highlight the audit procedures to be used to substantiate/confirm the amounts reported for following items on the financial statements provided: Revenue and accounts receivable Purchases and accounts payablearrow_forwardYou were able to gather the following from the December 31, 2006 trial balance of XYZ Corporation in connection with your audit of the company:Cash on hand = P 500,000Petty cash fund = 10,000BPI current account = 1,000,000Security Bank current account No. 01 = 1,080,000Security Bank current account No. 02 =(80,000)PNB savings account = 1,200,000PNB time deposit = 500,000Cash on hand includes the following items:07. Customer's check for P40,000 returned by bank on December 26, 2006 due to insufficient fund but subsequently redeposited and cleared by the bank on January 8, 2007.08. Customer's check for P20,000 dated January 2, 2007, received on December 29, 2006.09. Postal money orders received from customers, P30,000. The petty cash fund consisted of the following items as of December 31, 2006.Currency and coins = P 2,000Employees' IOUs = 1,000Currency in an envelope marked "collections for charity" with names attached = 1,200Unreplenished petty cash vouchers = 1,300Check drawn by XYZ…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning