Assign6OptionAExcel_7ed.xlsx

wp 21-1

Oceanview Marine Company
Accounts Receivable Leadsheet
December 31, 2018
2018% Change
20172018NetAdjusted(before
Account Number and NameBalanceBalanceAdjustmentsBalanceadjustment)
1100 — Accounts receivable1,402,229PY1,762,682G/L25.71%
1110 — Allowance for doubtful accounts(116,636)PY(116,636)G/L(31,706)(148,342)21-150.00%
Total1,285,5931,646,04628.04%
FF
Tickmark legend
GL Agreed to general ledger.
PY Agreed to prior year working papers.
F Footed with out exception.

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wp 21-2

Oceanview Marine Company
Adjusting Journal Entries: Accounts Receivable
December 31, 2018
Account Number and NameDebitCredit
6100 — Bad debts expense$ 31,706.00
1110 — Allowance for bad debtsX$ 31,706.00
Explanation: To adjust allowance account to estimated balance at year-end. See wp 21-15.
X - Posted to leadsheet

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wp 21-6

Oceanview Marine Company
Planned Tests of Balances Matrix - Accounts Receivable
December 31, 2018
Audit Objectives Acceptable Audit Risk (High, Medium or Low)Inherent Risk (High, Medium, or Low)Analytical Procedures (High, Medium, or Low potential for misstmts.)Control Risk: Sales Cycle (High, Medium, or Low)Substantive Tests of Transactions: Sales Cycle (High, Medium, or Low likelihood of misstmts.)Planned Tests of Balances (Extensive, Medium, or Reduced Tests) Comments *
Detail tie-inMLLLLR
ExistenceMMLMLMConsideration of required fraud risk of improper revenue recognition .
CompletenessMMLLLMIncentive for private company to understate revenue.
AccuracyMMMLL
ClassificationMLLHL
Realizable valueMMMML
CutoffMMMLL
RightsMMMLL
Presentation and disclosureMLLLL
Preliminary judgment about materiality:$75,000
Performance materiality for accounts receivable:$40,000
* For each audit objective with extensive or medium planned tests of balances (E or M in column seven), use column eight to indicate your primary concern(s) about that objective.

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wp 21-6 resp

HE
MM
LR

wp 21-17

Oceanview Marine Company
Calculation of Sample Size:
Nonstatistical Sampling
December 31, 2018
Decisions and Facts for Determining Sample Size:
Book Value of the recorded population:1,762,682.00(86 accounts)
Book value of individually material accounts:1,166,116.00(13 accounts)
(test all material accounts)
Book value of all remaining accounts (BV):
(test only a sample)
Tolerable Misstatement (TM):
Confidence Factor (CF):2.0(from table below)
n = (sample size accounts < tolerable misstatement): ERROR:#DIV/0!(round to whole number)
Note: n = (BV x CF) / TM
Confidence Factor for Determining Sample Size:
Risk of Incorrect AcceptanceConfidence of SampleConfidence Factor
37%63%1
14%86%2
5%95%3
Justify/explain your decision:
Other factors considered:

Current file 3 - tests of balances, completing the audit

(The confidence factor should be based on considerations of acceptable audit risk, inherent risk, control risk, results of preliminary analytical procedures, and the results of substantive tests of transactions)

Inherent risks for the existence and accuracy objectives for accounts receivable were assessed as medium. After performing tests of transactions for the sales and cash receipts cycle, control risks for the existence and accuracy objectives for accounts receivable were assessed as medium and low, respectively. Acceptable audit risk is medium. Results of substantive tests of transactions and analytical procedures were generally favorable. A confidence factor of 2 is considered appropriate considering these factors.

Little anticipated misstatement in accounts receivable.

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wp 21-18

Oceanview Marine Company
Sample Selection: Nonstatistical Sampling
December 31, 2018
Audit Area: Accounts receivable
Individually materal accounts greater than tolerable misstatement of:0
Amount
Customer NameConfirmed
1Anthony Underwriters117,990.00
2
3
4
5
6 to 13Various588,421.00
Total706,411.00
Sample below tolerable misstatement:
Sampling Interval = Number of Accounts / Sample Size =
(round to whole number)
Amount
Customer Name (Random Starting Point: 1st account)Confirmed
1James Abbott21,345.00
2
3
4
5
6 to 35Various232,002.42
Total253,347.42

Current file 3 - tests of balances, completing the audit

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wp 21-19

Oceanview Marine Company
Evaluation of A/R Confirmations:
Nonstatistical Sampling
December 31, 2018
Customer amounts greater than tolerable misstatement—Summary of Confirmation Differences:
Amount of
A/R BalanceA/R BalanceAmountReason(s)Client Misstatement,
Customerper Client'sperofforif any
NameRecordsCustomerDifferenceDifferenceOver (Under)
0.00
0.00
0.00
0.00
Net misstatement:0.00
Sample items less than tolerable misstatement—Summary of Confirmation Differences:Amount of
A/R BalanceA/R BalanceAmountReason(s)Client Misstatement,
Customerper Client'sperofforif any
NameRecordsCustomerDifferenceDifferenceOver (Under)
0.00
0.00
0.00
0.00
Net misstatement:0.00

Current file 3 - tests of balances, completing the audit

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wp 21-20

Oceanview Marine Company
Evaluation of A/R Confirmations:
Nonstatistical Sampling (continued)
December 31, 2018
Calculation of Projected Misstatement:
Misstatements in individually significant accounts:
Net misstatement = 0.00
(misstatements are not projected since tested 100%)
Sample Projected Misstatement:
(net misstatement/$ sample size) x ($ population size*) =0.00
Total projected misstatement =0.00
* The population size for projection is the book value of the accounts less than tolerable misstatement.
Calculation of Actual Allowance for Sampling Risk:
Tolerable misstatement =0.00
Less: Projected misstatement =0.00
Allowance for sampling risk =0.00

Current file 3 - tests of balances, completing the audit

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wp 21-21

Oceanview Marine Company
Evaluation of A/R Confirmations:
Nonstatistical Sampling (continued)
December 31, 2018
Decision (check one):
Accept population as stated.
Request client to adjust population.
Expand audit tests.
Some other action. Specify:
Explain/justify your decision:
Conclusion:
Calculation of Unadjusted Projected Misstatement:
Projected misstatement =0.00
Less: Any adjusting journal entry (net) =
Unadjusted projected misstatement =
(if greater than the audit misstatement posting threshold, carry forward to Summary of Uncorrected Misstatements (workpaper 90-1))

&"Times New Roman,Regular"&11Current file 3 - tests of balances, completing the audit

21-21

(Account is not fairly stated, but if client corrects misstatements found in sample, account will be acceptable.)

(No adjustment required for account to be fairly stated.)

(Account is not fairly stated, and cannot be made acceptable by correcting misstatements found in sample.)

AR Listing

Oceanview Marine Company
Accounts Receivable Listing
December 31, 2018PBC
Amounts > $40,000
0-3031-6061-9091-120
Customer NamedaysdaysdaysdaysTotal
Anthony Underwriters0.00117,990.000.000.00117,990.00S
Bischoff, John0.00113,655.000.000.00113,655.00S
Borst, Robert155,690.000.000.000.00155,690.00S
Devine, Dan121,456.000.000.000.00121,456.00S
Geyer, Robert0.0068,904.000.000.0068,904.00S
Hayes, Lisa45,990.000.000.000.0045,990.00S
Kelsey, Martin123,568.000.000.000.00123,568.00S
Laubauch, Ken45,076.000.000.000.0045,076.00S
Smith, Linda47,665.000.000.000.0047,665.00S
Southern Construction0.000.00190,890.000.00190,890.00S
Swain, Monte0.0046,895.000.000.0046,895.00S
Sykora, Larry0.0041,567.000.000.0041,567.00S
Underwood, John0.000.0046,770.000.0046,770.00S
Total belwo $40,000539,445.00389,011.00237,660.000.001,166,116.00
FFFFF, CF
Cumulative
Amounts <$40,000Total
Abbot, James0.0021,345.000.000.0021,345.0021,345.00
Adams, Don0.000.000.00259.45259.4521,604.45
Allen, Robert432.000.000.000.00432.0022,036.45
Anderson, Matt235.67134.76125.320.00495.7522,532.20
Bates, Mary127.86213.000.000.00340.86S22,873.06
Beatty, Lonnie21,390.000.000.000.0021,390.0044,263.06
Benson Realty113.870.000.000.00113.8744,376.93
Binkowski, Alex654.00238.31456.710.001,349.0245,725.95
Capicchioni, Rita432.74246.870.000.00679.6146,405.56
Chappelle, Daniel0.0024,678.000.000.0024,678.0071,083.56
Chiang, Alpha21,345.000.000.000.0021,345.0092,428.56
Coscarelli, Stephen0.000.000.00145.56145.5692,574.12
DeLuca, Frank22,458.000.000.000.0022,458.00115,032.12
Detzler, Richard0.000.000.001,145.001,145.00116,177.12
Dugar, Amitabh245.68123.650.000.00369.33S116,546.45
Elder, Robert476.89367.90543.000.001,387.79117,934.24
Elliott, David345.76247.690.000.00593.45118,527.69
Erlinger, Eric4,567.000.000.000.004,567.00123,094.69
Escobar, Susan0.0011,567.000.000.0011,567.00134,661.69
Finney, Robert0.000.000.0022,154.7522,154.75156,816.44
Franklin, James21,367.000.000.000.0021,367.00178,183.44
Totals this page94,191.4759,162.181,125.0323,704.76178,183.44
Oceanview Marine Company
Accounts Receivable Listing
December 31, 2018PBC
0-3031-6061-9091-120Cumulative
Customer NamedaysdaysdaysdaysTotalTotal
Totals from prior page94,191.4759,162.181,125.0323,704.76178,183.44178,183.44
Gibson, Marion0.008,900.000.000.008,900.00187,083.44
Groomer, Michael23,567.000.000.000.0023,567.00210,650.44
Hansen, Karen213.45324.65119.110.00657.21211,307.65
Hill, Leonard0.000.000.00348.21348.21S211,655.86
Howard, Richard0.0011,678.000.000.0011,678.00223,333.86
J & S Research654.970.000.000.00654.97223,988.83
Jenkins, Frank0.000.000.0021,680.0021,680.00245,668.83
Jennings, Rocky0.0031,676.000.000.0031,676.00277,344.83
Jensen, Deborah25,456.000.000.000.0025,456.00302,800.83
Kattelus, Sue345.00368.00239.00114.651,066.65303,867.48
Kessler, Henry0.000.0023,645.000.0023,645.00327,512.48
Klaver, Earl766.34654.78324.650.001,745.77329,258.25
Klinger, Max11,960.000.000.000.0011,960.00341,218.25
Kubczak, Antoni345.67213.4511.640.00570.76S341,789.01
LaFave, Laura0.000.000.00214.68214.68342,003.69
LaLonde, Jennifer0.000.000.008,965.008,965.00350,968.69
Lantis, William214.67356.94158.90325.761,056.27352,024.96
Larson, Debra114.67219.430.000.00334.10352,359.06
Lee, Yang116.45235.890.000.00352.34352,711.40
Little, Donna432.11325.670.000.00757.78353,469.18
Marsh, Max318.270.000.000.00318.27353,787.45
Maurer, Stephen0.000.000.00643.34643.34354,430.79
McCabe, Terry21,643.000.000.000.0021,643.00376,073.79
McCall, Joseph5,865.000.000.000.005,865.00S381,938.79
Mechem, William0.000.006,590.000.006,590.00388,528.79
Meier, Diane0.0021,456.900.000.0021,456.90409,985.69
Melbourne Corp.235.00134.68437.000.00806.68410,792.37
Murphy, James0.000.000.001,145.001,145.00411,937.37
Nash, Dean0.000.000.003,567.903,567.90415,505.27
O'Connell, Daniel456.90532.00219.050.001,207.95416,713.22
Olin, Barry0.000.0021,397.000.0021,397.00438,110.22
Peiffer, Jerrold0.004,595.000.000.004,595.00442,705.22
Totals this page186,895.97140,833.5754,266.3860,709.30442,705.22
Oceanview Marine Company
Accounts Receivable Listing
December 31, 2018PBC
0-3031-6061-9091-120Cumulative
Customer NamedaysdaysdaysdaysTotalTotal
Totals from prior page186,895.97140,833.5754,266.3860,709.30442,705.22442,705.22
Peoples, Jacquelyn18,654.000.000.000.0018,654.00461,359.22
Perkins, Terry22,456.000.000.000.0022,456.00S483,815.22
Ramirez, Ramon1,124.75234.790.000.001,359.54485,174.76
Ramsey, James0.002,145.000.000.002,145.00487,319.76
Raymer, Lester0.000.002,246.470.002,246.47489,566.23
Rose, Anna2,145.671,158.492,145.780.005,449.94495,016.17
Ryan, Bernard21,456.000.000.000.0021,456.00516,472.17
Savalli, Karen556.24346.780.000.00903.02517,375.19
Schmidt, Peter134.65334.610.000.00469.26517,844.45
Schroeder, Bruce0.00867.000.000.00867.00518,711.45
Simmons, Carol0.0013,687.000.000.0013,687.00S532,398.45
Spanos, Jim5,698.000.000.000.005,698.00538,096.45
Steinbart, Paul0.000.000.0013,654.0013,654.00551,750.45
Taylor, Denzil0.0011,321.000.000.0011,321.00563,071.45
Trotter, David21,456.000.000.000.0021,456.00584,527.45
Tuttle, Tom154.65214.60124.60369.40863.25585,390.70
Warner, Wendy356.90213.920.000.00570.82585,961.52
Wilcox, Laura6,890.000.000.000.006,890.00592,851.52
Young, Gregory0.000.000.001,124.001,124.00593,975.52
Zelli, Arthur0.002,590.480.000.002,590.48596,566.00
TOTAL < $40,000287,978.83173,947.2458,783.2375,856.70596,566.00
FFFFF, CF
TOTAL > $40,000539,445.00389,011.00237,660.000.001,166,116.00
TOTAL ACCTS RECEIVABLE827,423.83562,958.24296,443.2375,856.701,762,682.00G/L
FFFFF, CF
21-1521-1521-1521-15
Tickmark Legend
F = Footed without exception.
CF = Cross-footed without exception.
G/L =Agreed to general ledger without exception.
S = Agreed to A/R subsidiary records without exception. Selected all over $40,000.
For amounts below $40,000, began with 5th account; selected every 10th account thereafter.

Current file 3 - tests of balances, completing the audit

BC 2/05/2019

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BC 2/05/2019

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BC 2/05/2019

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