answer the questions about auditing

In 2020, Bill decides to refinance his mortgage and the balance on his small business loan in to one at a lower rate. The bank is willing to work with him as long as he can provide them with copies of audited financial statement. He isnâ??t sure what that means so he come to you and you explain the different types of audits that are performed and the different types of opinions that can be issued and agree to perform the audit.In your audit of Billâ??s Bagels Inc for 2019, you found a number of issues that you believe to represent possible adjustments to the companyâ??s books. Billâ??s attitude is that â??once the books are closed, theyâ??re closedâ?, and he doesnâ??t want to make any adjustments. Below are the issues that concern you. Credit memos totaling $3,000 that were processed and recorded after year-end relate to sales and accounts receivable for 2019.Inventory cutoff tests indicate that $23,000 of inventory received after December 31, 2019, was recorded as purchases and accounts payable in 2020. These items were included in the inventory count at year-end and therefore were included in ending inventory.Inventory cutoff tests also indicate several sales in 2019 for goods that were shipped in early 2020. The goods were not included in inventory but were set -aside in a separate shipping area. The sales total of these shipments was $15,000 and the cost of sales for the shipments $10,000The company wrote several checks totaling $48,000 at the end of 2019 for accounts payable that were held and not mailed until January 15, 2020. The company has not established a reserve for expiring inventories. Your tests indicate that a reserve $20,000 is appropriate.Your review of the allowance for uncollectible accounts indicates that it may be understated by between $2,000 and $3,000. Required: Determine the adjustments that you believe must be made for Billâ??s Bagels financial statements to be fairly presented. Include the amounts and accounts affected by each adjustment. (Planning materiality for the engagement was determined to be 2% of expected income before taxes.) A trial balance is provided for your review.A.Prepare the necessary adjustments and show how they would affect the financial statements-individually and in the aggregate (total)B.Describe your responsibilities related to unadjusted misstatements that management has determined are immaterial individually and in the aggregate.C.What type of opinion would be issued if the adjustments were made?D.What type of opinion would be issued if Bill refuses to make the adjustments?base the worksheet that i give u answer B.C.D. (A is done)
case_9_adjustments_1_.xlsx

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12:00 PM
05/03/18
Accrual Basis
Bill’s Bagels Inc.
Trial Balance
As of December 31, 2019
Bill’s Bagel Inc
Case 8 Trial Balance
Case 9 calculations/adjustment
Dec 31, 19
Debit
Cash
366,094
Accounts Receivable
42,000
Allowance for Uncollectible Acc
Investment in Sysco
350,000
Prepaid Advertising
1,200
Undeposited Funds
0
Inventory
67,400
Prepaid Insurance
1,500
Land
120,000
Land Improvements
10,000
Building
145,737
Furniture and Equipment
38,000
Accumulated Depreciation
Equity in Brueggers
600,000
Investment in Brueggers
2,160,000
Accounts Payable
Dividends Payable
0
interest Payable
Payroll Liabilites
0
Corporate Income Taxes Payable
0
Sales Tax Payable
0
Unearned Revenue-Gift Cards
Mortgage Payable
Notes Payable-RISBDC
Treasury Stock
200,000
Paid In Capital In Excess of Pa
Preferred Stock
Common Stock, $5par, 200,000aut
Retained Earnings
Sales
Sales Discounts
40,000
Cost of Goods Sold
460,000
Operating expenses
380,000
Depreciation Expense
13,196
Payroll & Payroll Taxes
220,000
Investment Revenue
Interest Expense
17,631
Loss due to decline in inventory value
Unrealized holding loss
50,000
TOTAL
5,282,758.00
Net Income
Debit
Credit
$
48,000
$
10,000
45,000 $
23,000
2,000
16,496
300
5,000
234,032
32,638
1,900,000
620,000
520,000
87,292
1,200,000 $
18,000
$
2,500
$
20,000
620,000
5,282,758.00
121,500.00
639,173.00
Page 1 of 8
12:00 PM
05/03/18
Accrual Basis
Bill’s Bagels Inc.
Trial Balance
As of December 31, 2019
Bill’s Bagel Inc
Case 8 Trial Balance
Case 9 calculations/adjustment
Dec 31, 19
Debit
Credit
Debit
2%
12783.46
Page 2 of 8
12:00 PM
05/03/18
Accrual Basis
Bill’s Bagels Inc.
Trial Balance
As of December 31, 2019
Bill’s Bagel
Case Inc
9 calculations/adjustment
Case 8 Trial Balance
Net Effect
Credit
Cash
Accounts Receivable
$
18,000
Allowance for Uncollectible Acc $
2,500
Investment in Sysco
Prepaid Advertising
Undeposited Funds
Inventory
$
43,000
Prepaid Insurance
Land
Land Improvements
Building
Furniture and Equipment
Accumulated Depreciation
Equity in Brueggers
Investment in Brueggers
Accounts Payable
$
48,000
Dividends Payable
interest Payable
Payroll Liabilites
Corporate Income Taxes Payable
Sales Tax Payable
Unearned Revenue-Gift Cards
Mortgage Payable
Notes Payable-RISBDC
Treasury Stock
Paid In Capital In Excess of Pa
Preferred Stock
Common Stock, $5par, 200,000aut
Retained Earnings
Sales
Sales Discounts
Cost of Goods Sold
$
10,000
Operating expenses
Depreciation Expense
Payroll & Payroll Taxes
Investment Revenue
Interest Expense
Loss due to decline in inventory value
Unrealized holding loss
TOTAL
121,500.00
Item
48,000
(4)
(18,000) (1,3)
(2,500)
(6)
on financials
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(33,000) (2,3)
25,000 (2,4)
(18,000)
(1)
(10,000)
2,500
(6)
20,000
(5)

Page 3 of 8
12:00 PM
05/03/18
Accrual Basis
Bill’s Bagels Inc.
Trial Balance
As of December 31, 2019
Bill’s Bagel
Case Inc
9 calculations/adjustment
Case 8 Trial Balance
Cash
Credit
Net Effect
on financials
Item
2%
12783.46
Page 4 of 8
12:00 PM
05/03/18
Accrual Basis
Bill’s Bagels Inc.
Trial Balance
As of December 31, 2019
Bill’s Bagel Inc
Case 8 Trial Balance
Cash
Disclosures
Accounts Receivable
On the face of financials:
Allowance for Uncollectible Acc
Accounts and balances
Investment in Sysco
Heading -company, name of statement, correct date
Prepaid Advertising
Allowance for uncollectible either with amount or ne
Undeposited Funds
Accumulated Depreciations with amount or net with
Inventory
Bond premium or discount with amount or net with
Prepaid Insurance
Complete discription of stock-par, dividend %, shs au
Land
Corporate income taxes
Land Improvements
Building
1.Summary of significant accounting policies
Furniture and Equipment
1.1Methods of depreciation used
Accumulated Depreciation
1.2Methods of valuing inventory
Equity in Brueggers
net effect on asset
1.3Methods of accounting for inventory and bad deb
Investment in Brueggers
(5,500) 1.3Methods of accruing for revenue and expenses
Accounts Payable
Dividends Payable
2. Composition of Long Term Assets
interest Payable
2.1 Fixed Assets
Payroll Liabilites
2.2 Investments
Corporate Income Taxes Payable
Sales Tax Payable
3. Compostion of Long Term Debt
Unearned Revenue-Gift Cards
3.1 Notes-term, interest rate, pay off date
Mortgage Payable
3.2 Mortgage-term, interest rate, payoff
Notes Payable-RISBDC
Treasury Stock
4. Composition of Equity
Paid In Capital In Excess of Pa
4.1 Stock issued
Preferred Stock
4.2 Treasury stock purchased
Common Stock, $5par, 200,000autnet effect on liablitilies
4.3 Dividends declared
Retained Earnings
25,000 5. Other extraordinary items or discontinued opera
Sales
Net effect on Sales
Sales Discounts
(18,000)
Cost of Goods Sold
Operating expenses
Depreciation Expense
Payroll & Payroll Taxes
Investment Revenue
Interest Expense
Net effect on COS and Expenses
Loss due to decline in inventory value
12,500
Unrealized holding loss
TOTAL
Page 5 of 8
12:00 PM
05/03/18
Accrual Basis
Bill’s Bagels Inc.
Trial Balance
As of December 31, 2019
Bill’s Bagel Inc
Case 8 Trial Balance
Cash
2%
12783.46
Page 6 of 8
12:00 PM
05/03/18
Accrual Basis
Bill’s Bagels Inc.
Trial Balance
As of December 31, 2019
Bill’s Bagel Inc
Case 8 Trial Balance
Cash
Accounts Receivable
Allowance for Uncollectible Acc
Investment in Sysco
Prepaid Advertising
Undeposited Funds
Inventory
Prepaid
Complete
Insurance
discription of stock-par, dividend %, shs authorized, issued and outstanding
Land
Land Improvements
Building
Furniture and Equipment
Accumulated Depreciation
Equity in Brueggers
Investment in Brueggers
Accounts Payable
Dividends Payable
interest Payable
Payroll Liabilites
Corporate Income Taxes Payable
Sales Tax Payable
Unearned Revenue-Gift Cards
Mortgage Payable
Notes Payable-RISBDC
Treasury Stock
Paid In Capital In Excess of Pa
Preferred Stock
Common Stock, $5par, 200,000aut
Retained Earnings
Sales
Sales Discounts
Cost of Goods Sold
Operating expenses
Depreciation Expense
Payroll & Payroll Taxes
Investment Revenue
Interest Expense
Loss due to decline in inventory value
Unrealized holding loss
TOTAL
Page 7 of 8
12:00 PM
05/03/18
Accrual Basis
Bill’s Bagels Inc.
Trial Balance
As of December 31, 2019
Bill’s Bagel Inc
Case 8 Trial Balance
Cash
2%
12783.46
Page 8 of 8

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