Comment on cooperatives treatment of the transaction

Assignment Help Financial Management

Reference no: EM131459134

In the course of performing your audit of the financial statements of a cooperative housing corporation, you notice that the managment of the cooperative authorized the acquisition of a housing unit (apartment) from a shareholer who had not paid its required proprietary maintenance assessment to the cooperative for some time. The purchase price of the unit was booked to an "Other Asset" account on the balance sheet. This unit was secured by a note payable, and the note was properly reflected on the balance sheet.

As the auditor, you are responsible for the expression of an opinion on the financial statements and this opinion is based, in part, on the appropriateness of the accounting policies used.

Please comment on the cooperative's treatment of the transaction and, if necessary, provide a thorough explanation of the corrective measures which the cooperative should take in order to ensure that the financial statements have been presented in accordance with GAAP. In other words, was the accounting treatment appropriate?

Reference no: EM131459134

Questions Cloud

The current set of spot interest rates : The current set of spot interest rates with one, two, three and four years to maturity are 4%, 6%, 7% and 7.5% respectively.

Company plans an expansion-weighted average cost of capital : The Black Bird Company plans an expansion. what is the weighted average cost of capital?

The horizontal headings in the statement : The horizontal headings in the P&L statement show:

The owner agenda in strategic plan for asset management : Which of the following would not normally be part of the owner's agenda in a strategic plan for asset management?

Comment on cooperatives treatment of the transaction : Please comment on the cooperative's treatment of the transaction

Which statement is not applicable to financial statements : Which statement is not applicable to financial statements?

Issue common stock directly to the public : Suppose a firm wants to raise $28 million dollars during the next year. Issue common stock directly to the public.

Cost of retained earnings using gordon model approach : Heavy Rain Corporation just paid a dividend of $2.29 per share, What is Heavy Rain’s cost of retained earnings using the Gordon Model (DDM) approach?

Net present value when evaluating projects : Green Landscaping. Inc. is using net present value (NPV) when evaluating projects.

User Account

All Pages