User Account

All Pages

What are the TWO mitigating factors

Assignment Help Accounting Basics
Reference no: EM132719868

Question - You are the audit partner reviewing the audit working papers for Good Care Hospital Limited (GCHL) for the year ended 30 June 2020.

Today is 20 July 2020 and the audit report being due to be signed in three weeks' time.

During your review you note that the fixed-term borrowings of GCHL totalling $45 million are approaching maturity. GCHL does not seem to have renegotiated any terms of refinancing. You are aware, from your experience with other clients, that banks are reluctant to extend financing on the same terms in the current market. The financing of GCHL was historically managed by the Chief Financial Officer who left the hospital seven months ago and has not been replaced.

GCHL's treasurer, who has been with the hospital for eight months, has advised you that he has been busy renegotiating with some of GCHL's key suppliers who recently requested cash on delivery for all orders, rather than extending the normal credit terms.

You are also aware that a fire that occurred in the Hospital cafeteria last week on 14 July was not adequately covered by insurance. Fortunately, no one was seriously injured in the fire, but the cafeteria was so badly damaged it had to be closed. While discussing this matter with GCHL's law firm, they reveal that the hospital is unlikely to have adequate professional indemnity insurance to meet the current demands of several malpractice cases that have been brought against the hospital in the last 12 months.

Required -

(a) List FOUR going concern issues for GCHL.

(b) What are the TWO mitigating factors? Explain.

(c) Explain your responsibilities with respect to the cafeteria fire.

(d) Assuming that cafeteria fire event is a material event, how this event be handled in the financial report and the audit report?

Reference no: EM132719868

Questions Cloud

Describe the national healthcare issue you selected : Describe the national healthcare issue/stressor you selected and its impact on your organization. Use organizational data to quantify the impact.
Why is recognition of unearned revenue postive adjustment : Discuss Why is recognition of unearned revenue a negative adjustment on the statement of cash flows? Why is deferral of unearned revenue a positive adjustment
Prepare a short risk mitigation plan : Prepare a short Risk Mitigation plan to identify the threats for the assets - perform online search to complete the rest of the requirements for the firewall
Create an income statement for messinger manufacturing : Create an income statement for Messinger Manufacturing Company for the quarter ending March 31. WIP, Beg. Inventory (January 1) $ 140,400
What are the TWO mitigating factors : Today is 20 July 2020 and the audit report being due to be signed in three weeks' time. What are the TWO mitigating factors? Explain
Explain connection between ebp and the quadruple aim : Write a brief analysis (no longer than 2 pages) of the connection between EBP and the Quadruple Aim. Your analysis should address how EBP might (or might not).
Name three pricing strategies : Name three pricing strategies that might be adopted for international sales and briefly explain each one.
Should MXM build the plant : Their main argument is that the proposed location of the plant is too near to a river. What would be your response to this issue? Should MXM build the plant
Company capital structure weights : Masterson, Inc., has 7 million shares of common stock outstanding. The current share price is $83, and the book value per share is $8.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How is the information reported on the schedule m-three

How is the information reported on the Schedule M-3? (Describe the sections or components.). Describe how the Schedule M-3 differs from the Schedule M-1.

  Lockard company purchased machinery on january 1 2012 for

lockard company purchased machinery on january 1 2012 for 196880. the machinery is estimated to have a salvage value of

  Briefly describe the depreciation methods

For depreciation purposes, a 150% declining balance depreciation is used for a material handling lift truck with a cost basis of $42,668 and a salvage value.

  Discuss corky must currently recognize taxable income

the stock price has risen to $30 per share. Corky continues to own the stock. Corky must currently recognize taxable income

  Service and consequently place metrics concerning customer

What kind of measures might Sam's Pita Pit and the Classic Steakhouse include in the customer category of their new balanced scorecards? Create a table with one column for each set of measures. Which measures would be similar and which would be di..

  Strict cost-plus pricing system for all its books

Would you expect a publishing company to use a strict cost-plus pricing system for all its books? How might you find some indication about whether a publishing company actually was using cost-plus pricing for all its books?

  Calculate each project payback period

Calculate each project's payback period, indicating the most desirable project and the least desirable project using this method

  Determine the gross profit margin for sadie company

Using vertical analysis of the income statement for Sadie Company, determine the gross profit margin. Cost of goods sold 115,000. Gross profit $ 60,000

  What cost of goods sold during september was

The overhead is allocated to jobs using an estimated rate applied to direct labor hours. The budget for the year called for $180,000 of overhead cost.

  Compute the traditional payback period

Compute both the traditional payback period (PB) and the discounted payback period (DPB) for a project that costs $270,000

  Journalize the following business transactions

Journalize the following business transactions.

  Variable overhead spending and efficiency variances

The budgeted variable manufacturing overhead rate is $4 per direct labor-hour. During July, the company incurred $39,100 in variable manufacturing overhead cost. Compute the variable overhead spending and efficiency variances for the month.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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