Laramie Wire Manufacturing

Case 8.1 Laramie Wire Manufacturing 1. Cost of sales The cost of unwashed sales summation 3% from 2007 to 2008 comp ared the sales change magnitude 4% in the same breaker point. That ratio is lucid among periods and I do non believe there is anything that should assume out to the auditor. eld Sales in Receivables Days Sales in Receivables increase 16% from 2007 to 2008. There might be customers who are not paying due to various contrastive reasons. The auditors wish to drift that the receivables exist, are properly valuated, are inwardly the cutoff period for the audit and the amount is correct for uncollectable accounts. Inventories The plastics size up increased 23% although Copper celestial pole inventory increased 59%. destroyed Goods Inventory increased 41% from 2007 to 2008. The cost of plastics decreased from $0.19 to $0.12.The price of cop rod stayed the same at $.48 a pound. The increase in price of plastics can inform why inventories of plastics and copper changed. The expected comfort of Copper Rod = 5,900,000*.48 = 2,832,000 The expected value of plastics = 1,100,000 * .12 = 132,000 The expected value of plastics is not consistent with carrying costs at lower of cost or marketplace pricing. This area needs to be checked by the auditor. The material footage allotment too needs further examination.

25% (125,000sq.ft) is allocated to warehousing. soon the copper rod inventory alone would demand 141,000 sq. ft. which is more than than is allocated for the entire inventory. The auditors should earn sure that all existing inventori es squander been recorded completely, go to! the warehouse and ensure all the inventories are recorded in the inventory ledger. Accounts Payable The accounts payable increased 6% temporary hookup inventories increased much higher. This is not consistent and the balances of inventory accounts and payables need to be verified. Inventory should be counted to verify that it is correct and exists. 2. The prey of analytical procedures is to...If you want to fixate a full essay, dictate it on our website: OrderCustomPaper.com

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