Preliminary Analytical Procedures; Required:
Perform preliminary analytical procedures analysis on the current-year unaudited financial statements for the purpose of identifying accounts that you want to investigate further.
Calculate comparative and common-size (to 2 decimal points) financial statements.
Add subtotals for operating income, current assets, current liabilities, & total liabilities in the statements.
Assume that all sales are credit sales. Please set up 6 columns in an excel file in the following order:
1) Prior year in $, 2) prior year common-sized, 3) current year in $,4) current year common-sized 5) $ change between current yr. and prior yr., 6) % change between current yr. and prior yr.
Also calculate 5 Balance Sheet ratios, and 5 Operations Ratios.
For the ratios, calculate the prior year, current year, and percent change.
Note: There were no dividends paid at any time. The co. is to maintain a current ratio of 2.0 , per the bank.
Once your calculations are completed, identify at least 4 accounts that you should investigate further in your substantive testing. Explain why you want to investigate these accounts.
Analytic Review -2023 Barney Enterprises, Inc. 2022 2023 (prior year) (current yr.) $2,200,000 $1,577,000 1,555,000 996,801 645,000 580,199 408,800 401,000 60,000 60,000 $176,200 119,199 10,000 8,000 166,200 111,199 24,800 43,600 $141,400 67,599
Revenue and Expense: Sales (net) Cost of Goods Sold Gross Margin General Expense Depreciation Operating Income Interest Expense Income before Income Taxes Income Tax Expense Net Income Assets: Cash $90,000 $54,800 Accounts Receivable 100,000 120,000 Allowance for Doubtful Accounts -8,000 -4,000 Inventory 330,000 389,199 Fixed Assets 600,000 800,000 Accumulated Depreciation -300,000 -360,000 Total Assets $812,000 $999,999 Liabilities and Equity: Accounts Payable $90,000 $93,400 Bank Loans, 8% 0 150,000 Accrued Interest 10,000 8,000 Accruals and Other 12,000 1,000 Long-Term Debt, 10% 100,000 80,000 Capital Stock 400,000 400,000 Retained Earnings 200,000 267,599 Total Liabilities and Equity $812,000 $999,999 Preliminary Analytical Procedures;Required: Perform preliminary analytical procedures analysis on the current-year unaudited financial statements for the purpose of identifying accounts that you want to investigate further. Calculate comparative and common-size (to 2 decimal points) financial statements. Add subtotals for operating income,current assets,current liabilities,& total liabilities in the statements Assume that all sales are credit sales. Please set up 6 columns in an excel file in the following order 1) Prior year in $, 2) prior year common-sized, 3) current year in $, 4) current year common-sized 5) $ change between current yr. and prior yr., 6) % change between current yr. and prior yr. Also calculate 5 Balance Sheet ratios, and 5 Operations Ratios (the formulas are in Appendix 4A). For the ratios, calculate the prior year, current year, and percent change. Note: There were no dividends paid at any time. The co. is to maintain a current ratio of 2.0,per the bank Once your calculations are completed, identify at least 4 accounts that you should
Print out your spreadsheet in good, readable form a day or so BEFORE the assignment is due, so you can reformat column widths, etc. as necessary to hand in a polished product. (saved as Analytic Review Problem - 2022.235" on Excel - updated 1/01/22)
