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You have completed the auditing of Company A and have found $10,000 purchase of a fixed asset was recorded as maintance expense. The company has $100,000 million in fixed assets, net income of 15 million and total assets of 500,000 million? What should the company do when they find out about this error in accounting?

Audit of general motors revenue. Each car and truck has an invoice on the window and is in GM s computer system, and that 8 million cars and trucks were sold. The automobile revenues of General Motors are $100 billion. How many invoices out of 8 million would you want to examine in order to verify the $100 billion of revenues in the financial statements?

As audit manager you realize that to complete the audit of xyz company you will need to bring in two more auditors and another audit supervisor March 15th 2010. However the cost of the additional auditors will cause the audit manager to increase the cost of Audit of XYZ company by $45,000. Without the additional auditors the audit can be completed by the First of April 2010. The audit covers the year Jan 1 2009 to Dec. 31, 2009. As audit manager what would you do and why?

The company in question had a very significant amount of plant assets and also had a very significant maintenance expense each year. The company goals were reflected at every level of the company. The CEO knew that his job was on the line and to keep it he had to meet certain earnings goals. In establishing those goals a certain amount was agreed on as the budget amount for maintenance expense for the year. One VP had most plant assets under his supervision and also his department spent most of the maintenance dollars. If he met the maintenance goals he would receive a bonus equal to his annual salary. Under the VP were 5 managers whose sections spent the maintenance dollars. The VP told the managers to do what was necessary to meet the maintenance goals. In a memo to the managers the VP stated to the managers there was only one choice and that was to have the maintenance expense be at or below budget and that he would be very upset with anyone who exceeded their allocated amount. All turned out well as the maintenance expense came in under budget.

What would you as the senior auditor do?

Carver World Inc. paid out $22.5 million in total common dividends and reported $278.9 million of retained earnings at year end. The prior year s retained earnings were $212.3 million. What was the net income? Assume that all dividends declared were actually paid.

Show all relevant calculation s.

Capital City Construction (CCC) needs $1 million of assets to get started, and it expects to have a basic earning power ratio of 20%. CCC will own no securities, so all of its income will be operating income. If it so chooses, CCC can finance up to 50% of its assets with debt, which will have an 8% interest rate. Assuming a 40% tax rate on all taxable income, what is the difference between CCC s expected ROE if it finances with 50% debt versus its expected ROE if it finances entirely with common stock?