ACC 410 Week 2

Assignment

In a 2-3 page paper, complete the case below and submit to instructor. Review the income statement for Uden Supply Company and answer the following:

a)Describe the purpose of analytical procedures performed in the planning stage of the audit.

b)Uden Supply has projected its 2004 gross profit at 31% of sales despite expectation for some shrinkage in margins. On the basis of Uden's operating performance in years 2001 - 2003 project your best guess for 2004. Project 2004 based on the incremental changes for each line item over the last three years.

c)Udens unaudited financial statements for the current year show a 31 percent gross profit rate. Assuming that this represents a misstatement from the amount that you developed as an expectation, calculate the estimated effect of this misstatement on net income before taxes for 20X4.

d)Indicate whether you belive that the difference calculated in part (c) is material.

Explain your answer. (50-100 words).

Discussion Questions

Balance Sheet Verification. Complete 5-7 (p. 169). Remember to complete all parts of the problems. Do not forget to show the necessary steps and explain how you attained that outcome.

Accounting Principles. Complete 6-4 (p. 221). Remember to complete all parts of the problems. Do not forget to show the necessary steps and explain how you attained that outcome.