ANALYSIS OF SUPERIOR COMPANY PROPERTY, PLANT AND EQUIPMENT AS OF DECEMBER 31, 20
ID: 2579809 • Letter: A
Question
ANALYSIS OF SUPERIOR COMPANY PROPERTY, PLANT AND EQUIPMENT AS OF DECEMBER 31, 2008
Property, Plant, and Equipment
Accumulated Depreciation
Balance
Balance
Balance
Balance
Account
12/31/07
Additions
Disposals
Other
12/31/08
Life
Method
12/31/07
Provision
Disposal
12/31/08
Land
650,000
650,000 T2
Building
3,270,000
230,000
(30,000)
3,470,000 T2
20 years
S/L
1,144,500 T
168,500 R
1,313,000 T2
Equipment
1,750,000
90,000 ±
(12,000) X
30,000
1,858,000 T2
10 years
S/L
700,000 T
179,500 R
(12,000)
867,500 T2
5,670,000
320,000
(12,000)
0
5,978,000
1,844,500
368,000
(12,000)
2,189,500
What audit test would each of the following symbols (tickmarks) represent?
AUDIT TESTS
=
1. Does not recompute correctly.
2. Tested reasonableness of calculation
3. Traced amount to current year's trial balance and general ledger.
=
4. Reclassification entry for equipment erroneously recorded as building.
5. Reclassification entry for building erroneously recorded as equipment.
6. Traced amount to prior year's working papers.
± =
7. Sold equipment to employees. Traced cash receipt into cash receipt journal.
8. Confirmed with exception.
9. Confirmed without exception.
=
10. Examined supporting vendors' invoices, canceled checks, asset subsidiary ledger,
and board of directors' minutes of meetings authorizing transactions.
11. Examined supporting work orders and engineers' reports, canceled checks, asset
X =
subsidiary ledger, and board of directors' minutes of meetings authorizing transactions.
12. Examined supporting deed and purchase contract, canceled checks, asset subsidiary
ledger, and board of directors' minutes of meetings authorizing transactions.
T2 =
R =
EXTRA QUESTION:
There is a big problem with this workpaper that many auditors
would overlook. What is it?
ANALYSIS OF SUPERIOR COMPANY PROPERTY, PLANT AND EQUIPMENT AS OF DECEMBER 31, 2008
Property, Plant, and Equipment
Accumulated Depreciation
Balance
Balance
Balance
Balance
Account
12/31/07
Additions
Disposals
Other
12/31/08
Life
Method
12/31/07
Provision
Disposal
12/31/08
Land
650,000
650,000 T2
Building
3,270,000
230,000
(30,000)
3,470,000 T2
20 years
S/L
1,144,500 T
168,500 R
1,313,000 T2
Equipment
1,750,000
90,000 ±
(12,000) X
30,000
1,858,000 T2
10 years
S/L
700,000 T
179,500 R
(12,000)
867,500 T2
5,670,000
320,000
(12,000)
0
5,978,000
1,844,500
368,000
(12,000)
2,189,500
What audit test would each of the following symbols (tickmarks) represent?
AUDIT TESTS
=
1. Does not recompute correctly.
2. Tested reasonableness of calculation
3. Traced amount to current year's trial balance and general ledger.
=
4. Reclassification entry for equipment erroneously recorded as building.
5. Reclassification entry for building erroneously recorded as equipment.
6. Traced amount to prior year's working papers.
± =
7. Sold equipment to employees. Traced cash receipt into cash receipt journal.
8. Confirmed with exception.
9. Confirmed without exception.
=
10. Examined supporting vendors' invoices, canceled checks, asset subsidiary ledger,
and board of directors' minutes of meetings authorizing transactions.
11. Examined supporting work orders and engineers' reports, canceled checks, asset
X =
subsidiary ledger, and board of directors' minutes of meetings authorizing transactions.
12. Examined supporting deed and purchase contract, canceled checks, asset subsidiary
ledger, and board of directors' minutes of meetings authorizing transactions.
T2 =
R =
EXTRA QUESTION:
There is a big problem with this workpaper that many auditors
would overlook. What is it?
Explanation / Answer
= Confirmed without exception
= Reclassification entry for building erroneously recorded as equipment.
± = Does not recomputed correctly
= Traced amount to prior year’s working papers.
X = Sold equipment to employees. Traced cash receipt into cash receipt journal
T2 = Traced amount to current year’s trial balance general ledger
R = Tested reasonable of calculation
In this worksheet auditor does not consider the disposal of the accumulated depreciation and summation of the all values.
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