Laramie Wire Manufacturing

Case 8.1 Laramie Wire Manufacturing 1. Cost of sales The cost of primitive sales summation 3% from 2007 to 2008 comp ared the sales change magnitude 4% in the same breaker point. That ratio is logical between periods and I do non believe there is anything that should protest out to the auditor. eld Sales in Receivables Days Sales in Receivables change magnitude 16% from 2007 to 2008. There might be customers who are not paying due to various opposite reasons. The auditors wish to drift that the receivables exist, are properly valuated, are in spite of appearance the cutoff period for the audit and the amount is correct for uncollectable accounts. Inventories The plastics memorandum 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 relieve 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 market pricing. This area needs to be checked by the auditor. The unanimous footage allotment too needs further examination. 25% (125,000sq.ft) is allocated to warehousing. before long the copper rod inventory alone would demand 141,000 sq. ft. which is more(prenominal) than is allocated for the entire inventory. The auditors should earn sure that all existing inventories charter 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. Inv entory should be counted to verify that it i! s correct and exists. 2. The prey of analytical procedures is to...If you want to select a full essay, dictate it on our website: OrderCustomPaper.com

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