ACCT 2000 Study Guide - Shoplifting, Finished Good, Walmart

2. You are auditing the financial statements of a cosmeticsdistributor that sells thousands of individual items. Thedistributor keeps its inventory in its distribution center and intwo public warehouses. At the end of each business day, it updatesits inventory file, whose records contain the following data:

You will use audit software to examine inventory data as of thedate of the distributor’s physical inventory count. You willperform the following audit procedures:

Observe the distributor’s physical inventory count at year-endand test a sample for accuracy.

Compare the auditor’s test counts with the inventoryrecords.

Compare the company’s physical count data with the inventoryrecords.

Test the mathematical accuracy of the distributor’s finalinventory valuation.

Test inventory pricing by obtaining item costs from buyers,vendors, or other sources.

Examine inventory purchase and sale transactions on or near theyear-end date to verify that all transactions were recorded in theproper accounting period.

Ascertain the propriety of inventory items located in publicwarehouses.

Analyze inventory for evidence of possible obsolescence.

Analyze inventory for evidence of possible overstocking orslow-moving items.

Test the accuracy of individual data items listed in thedistributor’s inventory master file.

Describe how the use of the audit software package and a copy ofthe inventory file data might be helpful to the auditor inperforming each of these auditing procedures.

Hi, this is a question for my Cost Accounting course and was wondering if I could please get help...

1. Prepare a cost of goods manufacturing statement, a cost of goods sold statement and a manufacturing income statement for August 2017 for ACE Manufacturing, based on the following information:

Raw Materials purchaes $500,000

Sales $4,000,000

Factory depreciation $20,000

Beg. finished goods inventory $200,000

Indirect materials $20,000

Ending work in process inventory $100,000

Direct labor $300,000

Selling, General, Administrative expenses $1,000,000

Indirect materials $20,000

Beginning raw materials inventory $200,000

Factory insurance $10,000

Ending finished goods inventory $300,000

Factory utilities $30,000

Ending Raw materials inventory $100,000

Beginning raw materials inventory $200,000