Review of the audit working papers and financial statements

Assignment Help Cost Accounting
Reference no: EM13557801

You are the manager responsible for the audit of Keffler Co, a limited company engaged in the manufacture of plastic products. The draft financial statements for the year ended 30 September 20X2 show revenue of $47.4 million (20X1 - $43.9 million), profit before taxation of $2 million (20X1 - $2.4 million) and total assets of $33.8 million (20X1 - $25.7 million).

The following issues arising during the final audit have been noted on a schedule of points for your attention.

In October 20X1, Keffler bought the right to use a landfill site for a period of 15 years for $1.1 million.

Keffler expects that the amount of waste that it will need to dump will increase annually and that the site will be completely filled after just ten years. Keffler has charged the following amounts to the statement of profit or loss and other comprehensive income for the year to 30 September 20X2

  • $20,000 licence amortisation calculated on a sum-of-digits basis to increase the charge over the useful life of the site
  • $100,000 annual provision for restoring the land in 15 years' time

(b)A sale of industrial equipment to Deakin Co in November 20X1 resulted in a loss on disposal of

$0.3 million that has been separately disclosed in the statement of profit or loss and other comprehensive income. The equipment cost $1.2 million when it was purchased in October 1998 and was being depreciated on a straight-line basis over 20 years.

In October 20X2, Keffler was banned by the local government from emptying waste water into a river because the water did not meet minimum standards of cleanliness. Keffler has made a provision of $0.9 million for the technological upgrading of its water purifying process and included $45,000 for the penalties imposed in 'other provisions'.

Required

For each of the above issues:

I. Comment on the matters that you should consider

II. State the audit evidence that you should expect to find in undertaking your review of the audit working papers and financial statements of Keffler Co for the year ended 30 September

Reference no: EM13557801

Questions Cloud

Explain drop of oleic acid and benzene solution : When performing your experiment, you add your first drop of oleic acid/benzene solution, and a lens forms immediately. What is wrong with your setup, and how can it be corrected
Find the density of the object and oil : An objectweighing 330 N in air is immersed inwater after being tied to a string connected to a balance. Find the density of the object and oil
Discuss the implications of the external auditor : Discuss the implications of the external auditor providing an internal audit service to a client, explaining the current ethical guidance on the provision of other services to clients.
Evaluate the proportion by mass of lithium in kunzite : Kunzite is a mineral containing lithium (Li) and has the empirical formula LiAlSi2O6. Calculate the proportion by mass of lithium in Kunzite.
Review of the audit working papers and financial statements : State the audit evidence that you should expect to find in undertaking your review of the audit working papers and financial statements of Keffler Co for the year ended 30 September - Review of the audit working papers and financial statements of K..
What is the minimum depth of snow : In February 1955, a paratrooper fell 1200 ft from an airplanewithout being able to open his chute but happened to land in snow, What is the minimum depth of snow that wouldhave stopped him safely
Explain solid lithium metal and diatomic fluorine gas : Solid lithium metal and diatomic fluorine gas react spontaneously. Give the balanced chemical equation (including phases) that describes this reaction.
What average force must he exert on the railing : A 110 kg ice hockey player skates at 3.0 m/s toward a railingat the edge of the ice and then stops himself by grasping therailing with his outstretched arms. What average force must he exert on the railing
Define why light intensity is dependent on the distance : Explain why light intensity is dependent on the distance the detector is from the light source. Describe the mathematical relationship. Explain why all comparative measurments for this experiment should be made with the optical cable the same dist..

Reviews

Write a Review

Cost Accounting Questions & Answers

  Cost accounting assignment

Evaluate Method of measuring costs associated with production, budgeting process, normal job-order costing system , master budget, cycle time.

  Prepare the journal entries

Prepare the journal entries to record the bond issue and interest expense.

  Advise as to the liability of all the parties

Write a report on given case study and Advise as to the liability of ALL the parties both under common law and the Corporations Law.

  Prepare revenues budget

Prepare Revenues budget and Production budget in units

  Effect of exchange rate changes on cash and cash

Effect of exchange rate changes on cash and cash

  Corporate governance

You are to reflect on how this case of China Sky relates to what the arguments for and against allowing audit firm partners and/or employees to join audit committees.

  Cost-benefit analysis

A cost-benefit analysis of electronic medical records in primary care

  Non-annual interest rates and annuities

Theory of Interest- Non-annual interest rates and annuities

  Job costing in service organizations

How is job costing in service organizations different from job costing in manufacturing environments?

  Accounting for bad debt expense

Accounting for bad debt expense

  Accounting and partnership problems

Accounting and Partnership problems

  Development of relevant cash flows

Development of relevant cash flows - Cost estimating and financial analysis

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd