February 1, 2015 Dear Ms. Lin, Special Requirements for Packing （Order No. MI 063) Wi

in the files of two audit clients.

Palm Industries Co (Palm)

Palm’s year end was 31 March 2015 and the draft financial statements show revenue of $28·2 million, receivables of $5·6 million and profit before tax of $4·8 million. The fieldwork stage for this audit has been completed.

A customer of Palm owed an amount of $350,000 at the year end. Testing of receivables in April highlighted that no amounts had been paid to Palm from this customer as they were disputing the quality of certain goods received from Palm. The finance director is confident the issue will be resolved and no allowance for receivables was made with regards to this balance.

Ash Trading Co (Ash)

Ash is a new client of Chestnut & Co, its year end was 31 January 2015 and the firm was only appointed auditors in February 2015, as the previous auditors were suddenly unable to undertake the audit. The fieldwork stage for this audit is currently ongoing.

The inventory count at Ash’s warehouse was undertaken on 31 January 2015 and was overseen by the company’s internal audit department. Neither Chestnut & Co nor the previous auditors attended the count. Detailed inventory records were maintained but it was not possible to undertake another full inventory count subsequent to the year end.

The draft financial statements show a profit before tax of $2·4 million, revenue of $10·1 million and inventory of $510,000.

Required:

For each of the two issues:

(i) Discuss the issue, including an assessment of whether it is material;

(ii) Recommend ONE procedure the audit team should undertake to try to resolve the issue; and

(iii) Describe the impact on the audit report if the issue remains UNRESOLVED.

Notes:

1 The total marks will be split equally between each of the two issues.

2 Audit report extracts are NOT required.

A.LOD PATCH:BT=USPC,MN=1

B.ACT PATCH:BT=USPC,MN=1.EX=BOTH

C.CON PATCH:BT=USPC,MN=1.EX=BOTH

D.DEA PATCH:BT=USPC,MN=1.EX=BOTH

the shipment date is 01-01-2008, which one of the following is the maturity date of the draft？

(1)( ) 28th February 2008

(2)( ) 1st March 2008

(3)( ) 2nd March 2008

(4)( ) 3rd March 2008

nd May. Each shipment is to be for about 500 tonnes. Shipment was effected as follows:

A. 450 tonnes sent 24 February for value USD 27,000.00.

B. 550 tonnes sent 12 April for value USD 33,000.00.

C. 460 tonnes sent 30 April for value USD 28,000.00.

D. 550 tonnes sent 4 June for value USD 33,000.00.

Which of the above shipments will be honoured on presentation？

(1)( ) A only.

(2)( ) A and C only.

(3)( ) B and D only.

(4)( ) A, B and C only.

ary？

(1)( ) 01 -02 -2008 to 14 -02 -08 &15 -02 -2008 to 28 -02 -08.

(2)( ) 01 -02 -2008 to 15 -02 -08 &16 -02 -2008 to 28 -02 -08.

(3)( ) 01 -02 -2008 to 14 -02 -08 &15 -02 -2008 to 29 -02 -08.

(4)( ) None.

Sergio purchases $3,000-worth of supplies from a local vendor.The supplies are delivered on April 1, 2018.The supplies are fully used up on December 31, 2018.Because of unusual circumstances, a bill for the supplies arrives from the vendor on February 1, 2019, and is promptly paid.When can Sergio deduct the expenses

I.In 2018, if he is an accrual basis taxpayer.

II.In 2018, if he is a cash basis taxpayer.()

A、Only statement I is correct

B、Only statement II is correct

C、Both statements are correct

D、Neither statement is correct

A.DIF和DEA为正值，DIF向上突破DEA

B.DIF和DEA为正值，DIF向下跌破DEA

C.DIF和DEA为负值，DIF向上突破DEA

D.DIF和DEA为负值，DIF向下跌破DEA

monthly, but closes them only at year-end (April 30). The resort’s busy season is from December 1 through March 31. Adrian Pride, the resort’s chief financial officer, keeps a close watch on Lift Ticket Rev- enue and Cash. The balances of these accounts at the end of each of the last five months are as follows: Lift TicketRevenue Cash November 30 $ 30,000 $ 9,000 December 31 200,000 59,000 January 31 640,000 94,000 February 28 850,000 116,000 March 31 990,000 138,000 Lift Ticket Revenue for the month ended Feb.28th is: ().

A、640000

B、850000

C、210000

D、990000