Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 22, Problem 23DQP
(a).
To determine
Determine the emphasis that should be given in the verification of notes payable in the situation.
(b).
To determine
Determine the purpose of the
(c).
To determine
Determine other audit procedures for audit of notes payable in the same circumstances.
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Dynatech Supply Corp. has the following selected transactions for notes receivable.
Nov.
1
Lent $141,100 cash to A. Bouchard on a one-year, 9% note.
Sold goods to Wright Inc., receiving a two-month, 6%, $31,000 note. Interest is due at maturity. The goods cost
$19,344.
1
Dec.
Received a six-month, 6%, $34,080 note in exchange for an account from Aquilina Corporation. Interest is due at
maturity.
15
Feb.
1
Collected the amount owing on the Wright note.
28
Accrued interest on all notes receivable at year end. Assume that interest is calculated to the nearest half month.
28
Analyzed each note and estimated that uncollectible notes at year end totalled $25,544.
Record the above transactions for Dynatech Supply Corp. (List all debit entries before credit entries. Credit account titles are
automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter O for the amounts. Round answers to the nearest whole…
During its first year of operations, Fertig Company had credit sales of $3,000,000, of which $400,000 remained uncollected at year-
end. The credit manager estimates that $18,000 of these receivables will become uncollectible.
The accounts receivable turnover is 10 times and average collection period is 36.5 days. Assume that average net accounts receivable
were $300.000. Explain what these measures tell us.
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Wilcox Mills is a manufacturer that makes all sales on 30-day credit terms. Annual sales are approximately $30 million. At the end of year 1, accounts receivable were presented in the company's balance sheet as follows.
Accounts receivable from clients
$
3,100,000
Less: Allowance for doubtful accounts
80,000
During year 2, $180,000 of specific accounts receivable were written off as uncollectible. Of these accounts written off, receivables totaling $18,000 were subsequently collected. At the end of year 2, an aging of accounts receivable indicated a need for a $242,000 allowance to cover possible failure to collect the accounts currently outstanding.
Wilcox Mills makes adjusting entries for uncollectible accounts only at year-end.
What is the The adjusting entry required at December 31, year 2, to increase the Allowance for Doubtful Accounts to $242,000.? Debit Uncollectale account expense Credit Allowance for doubtlful account by how much?…
Chapter 22 Solutions
Auditing And Assurance Services
Ch. 22 - List four examples of interest-bearing liability...Ch. 22 - Prob. 2RQCh. 22 - Prob. 3RQCh. 22 - Prob. 4RQCh. 22 - Prob. 5RQCh. 22 - Distinguish between (a) tests of controls and...Ch. 22 - Prob. 7RQCh. 22 - Prob. 8RQCh. 22 - Prob. 9RQCh. 22 - Prob. 10RQ
Ch. 22 - Prob. 11RQCh. 22 - Prob. 12RQCh. 22 - Prob. 13RQCh. 22 - Prob. 14RQCh. 22 - Prob. 15RQCh. 22 - Explain the relationship between the audit of...Ch. 22 - Prob. 17.1MCQCh. 22 - Prob. 17.2MCQCh. 22 - Prob. 17.3MCQCh. 22 - Prob. 18.1MCQCh. 22 - Prob. 18.2MCQCh. 22 - Prob. 18.3MCQCh. 22 - Prob. 19.1MCQCh. 22 - Prob. 19.2MCQCh. 22 - Prob. 19.3MCQCh. 22 - Prob. 20DQPCh. 22 - Prob. 21DQPCh. 22 - Prob. 22DQPCh. 22 - Prob. 23DQPCh. 22 - Prob. 24DQPCh. 22 - Prob. 25DQPCh. 22 - Prob. 26DQPCh. 22 - Prob. 27DQPCh. 22 - Prob. 28DQPCh. 22 - Prob. 29DQPCh. 22 - Prob. 30DQP
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