ACC604 UNR Module 1 & 2 Bronys Bikes & Internal Control Auditing These two assignments are separated first one is module 1 with its requirements parts 1,2,

ACC604 UNR Module 1 & 2 Bronys Bikes & Internal Control Auditing These two assignments are
separated first one is module 1 with its requirements parts 1,2,3,4 and 5
and with the prof.’s instructions as well.The second module 2 also you will find the instructions attached and for that do parts 1 and 2.Thank you. Exhibit BB.1
Brony’s Bikes, Inc., Comparative Income Statements, 20X0–20X9 (in thousands of d
20X9*
$335.000
20X8
$280.000
20X7
$272.000
Cost of Goods Sold
227.800
215.600
209.440
Gross Profit
107.200
64.400
62.560
Operating Expenses
45.770
42.330
41.400
Operating Income
Other Expenses
(net)
Net Income before
Taxes
and Extraordinary
Item
Income Taxes
Net Income before
61.430
22.070
21.160
15.668
8.960
8.700
45.762
13.110
12.460
13.729
32.033
4.542
8.568
4.150
8.310
0
$32.033
1.235
$9.803
0
$8.310
Sales
Extraordinary Item
Extraordinary Gain
(Loss)—Net of Tax
Net Income
*Unaudited
9 (in thousands of dollars)
20X6
$274.500
20X5
$266.800
20X4
$269.300
20X3
$268.700
211.365
205.436
188.510
188.090
63.135
61.364
80.790
80.610
42.000
40.680
39.997
40.100
21.135
20.684
40.793
40.510
8.240
8.150
7.890
7.940
12.895
12.534
32.903
32.570
3.869
9.026
3.760
8.774
9.871
23.032
9.771
22.799
-2.650
$11.676
0
$8.774
0
$23.032
-1.540
$24.339
20X2
$265.570
20X1
$263.440
20X0
$262.890
185.899
184.408
184.023
79.671
79.032
78.867
38.965
38.670
37.700
40.706
40.362
41.167
7.760
7.240
7.123
32.946
33.122
34.044
9.884
23.062
9.937
23.185
10.213
23.831
0
$23.062
3.400
$19.785
0
$23.831
Exhibit BB.2
Brony’s Bikes , Inc., Adjusted Trial Balance as of December 31, 20X9
Account Number
Bank Two Demand Deposit
1001
Dallas Dollar Bank Demand Deposit
1002
Dallas Dollar Bank Payroll Account
1008
Petty Cash
1012
Investments in Marketable Securities
1101
All for Decline in Market Value of Securities
1102
Accounts Receivable—Trade
1201
Notes Receivable—Trade
1202
Notes Receivable—Officers
1203
Allowance for Doubtful Accounts
1250
Raw Materials Inventory
1310
Derailleurs Inventory
1320
Purchased Parts Inventory
1330
Goods in Process—Grand Prix Touring Bike
1350
Goods in Process—Phoenix Touring Bike
1351
Goods in Process—Pike’s Peak Mountain Bike
1352
Goods in Process—Himalaya Mountain Bike
1361
Goods in Process—Waistliner Stationary Bike
1365
Finished Goods—Grand Prix Touring Bike
1371
Finished Goods—Phoenix Touring Bike
1372
Finished Goods—Pike’s Peak Mountain Bike
1373
Finished Goods—Himalaya Mountain Bike
1376
Finished Goods—Waistliner Stationary Bike
1379
Indirect Materials
1385
Repair Parts Inventory
1390
Prepaid Insurance
1410
Deferred Taxes—Warranty
1440
Land
1510
Factory Building
1520
Accumulated Depreciation—Building
1525
Warehouses and Sales Offices
1527
Accumulated Depreciation—Warehouses and Sales Offices
1529
Factory Equipment
1530
Accumulated Depreciation—Factory Equipment
1535
Office Building
1540
Accumulated Depreciation—Office Building
1545
Office Fixtures and Equipment
1550
Accumulated Depreciation—Office Fixtures and Equipment
1555
Autos and Trucks
1560
Accumulated Depreciation—Autos and Trucks
1565
Patents
1610
Copyrights
1620
Deposits
1710
Cost of Goods Sold—Grand Prix Touring Bike
5100
Cost of Goods Sold—Phoenix Touring Bike
5200
Cost of Goods Sold—Pike’s Peak Mountain Bike
5300
Cost of Goods Sold—Himalaya Mountain Bike
5400
Cost of Goods Sold—Waistliner Stationary Bike
5500
Direct Labor
6100
Direct Labor Applied
6200
Indirect Labor
7201
Depreciation—Factory Building
7205
Depreciation—Factory Equipment
Real Estate Taxes
Personal Property Taxes
Manufacturing Supplies
FICA Tax Expense
State Unemployment Tax Expense
Federal Unemployment Tax Expense
Workers’ Compensation Premiums
Health Insurance Premiums—Factory
Employee Pension Expense
Repairs and Maintenance Expense
Utilities Expense
Miscellaneous Factory Expense
Manufacturing Overhead Applied
Sales Commissions
Sales Salaries
Bad Debts Expense
Product Warranty
Advertising
Miscellaneous Selling Expense
Administrative Salaries
Research and Development Costs
Patent Amortization
FICA Tax Expense
State Unemployment Tax Expense
Federal Unemployment Tax Expense
Workers’ Compensation Premiums
Health Insurance Premiums—Administrative
Employee Pension Expense
Employee Profit Sharing Expense
Depreciation—Office Building
Depreciation—Office Fixtures and Equipment
Depreciation—Autos and Trucks
Depreciation—Warehouses and Sales Offices
Accounting Fees
Legal Fees
Other Professional Services
Supplies Expense
Insurance Expense
Printing and Copying Expense
Postage Expense
Gain/Loss on Disposal of Plant Assets
Miscellaneous Administrative Expense
Interest Expense
Loss on Decline in Market Value of Securities
Federal Income Tax Expense
State Income Tax Expense
City Income Tax Expense
Notes Payable—Trade
Accounts Payable—Trade
Interest Payable
Sales Salaries Payable
Administrative Salaries Payable
Factory Wages Payable
FICA Payable
7206
7210
7211
7220
7230
7231
7232
7233
7234
7235
7236
7241
7242
7250
8310
8320
8325
8330
8340
8350
9410
9420
9425
9431
9432
9433
9434
9435
9436
9437
9440
9445
9447
9449
9450
9451
9452
9460
9470
9480
9481
9485
9490
9701
9702
9990
9991
9992
2010
2020
2030
2041
2042
2043
2051
State Income Taxes Withheld
2052
City Income Taxes Withheld
2053
Unemployment and Workers’ Compensation Premiums Payable
2054
Accrued Profit Sharing Payable
2055
Federal Income Taxes Payable
2061
State Income Taxes Payable
2062
City Income Taxes Payable
2063
Estimated Product Warranty Liability
2070
Accrued Commissions Payable
2080
Mortgage Note Payable (10%)
2110
Deferred Tax Liability—Depreciation
2120
12% Note Payable to Bank Two
2130
10% Preferred Stock
3110
Common Stock
3120
Additional Paid-in Capital
3130
Treasury Stock
3140
Retained Earnings
3150
Dividends
3160
Sales—Grand Prix Touring Bike
4100
Sales—Phoenix Touring Bike
4200
Sales—Pike’s Peak Touring Bike
4300
Sales—Himalaya Mountain Bike
4400
Sales—Waistliner Stationary Bike
4500
Interest Earned
4901
Dividends Earned
4902
Loss on Disposal of Investments
4903
as of December 31, 20X9
Debit
Credit
(in thousands of dollars)
$
10.200
2.100
57
5
7.000
2.800
11.920
80
0
220
6.200
5.500
15.100
800
700
1.500
1.200
300
1.616
2.300
5.800
4.600
1.200
800
2.600
600
400
4.000
50.000
14.140
200.000
105.000
360.000
144.660
20.000
8.000
10.000
6.150
1.000
620
4.000
2.000
340
34.448
32.903
89.584
22.075
48.790
35.600
35.600
5.500
2.000
42.060
4.400
1.600
15.042
3.980
1.120
880
550
2.860
3.810
1.222
16.100
2.200
103.324
16.500
1.200
500
1.139
3.311
420
7.550
1.050
700
856
224
120
100
500
100
345
800
1.875
320
10.000
320
430
20
200
450
235
285
4.000
220
12.890
2.800
10.329
1.923
1.477
3.660
10.200
3.400
30
870
1.290
310
150
50
25
345
4.000
1.200
800
544
1.400
60.000
10.600
45.000
120.000
100.000
50.000
8.153
29.574
15.000
50.659
47.360
132.892
34.299
69.790
115
105
$
198
1.203.182
$
1.203.182
Exhibit BB.3
Brony’s Bikes , Inc., Income Statements for the Years Ended December 31, 20X9 an
Sales Revenue
Cost of Goods Sold:
Beginning inventories
$ 10.142
Cost of goods manufactured (Schedule 1)
233.174
Cost of goods available for sale
243.316
Ending inventories
15.516
Cost of Goods Sold
Gross Profit on Sales
Operating Expenses (Schedule 2)
Operating Income
Financial Income and Expense:
Interest expense
12.890
Interest and dividends earned
(220)
Loss (gain) on disposal of investments
198
Loss on decline in market value of securities
2.800
Net Financial Expense
Net Income before Taxes and Extraordinary Items
Income Taxes
Net Income before Extraordinary Items
Extraordinary Gain from Eminent Domain Sale (net of tax)
Net Income
SCHEDULE 1
COST OF GOODS MANUFACTURED (IN THOUSANDS OF DOLLARS)
Beginning Work-in-Process Inventories
Manufacturing Costs:
Direct Materials:
Beginning inventories of materials and purchased parts $ 16.150
Purchases
105.400
Available for production
121.550
Ending inventories of materials and purchased parts
26.800
Cost of Materials Used in Production
94.750
Direct Labor
35.600
Manufacturing Overhead (Schedule 1A)
103.324
Total manufacturing costs
Total Work in Process
Ending Work-in-Process Inventories
Cost of Goods Manufactured
SCHEDULE 1A
MANUFACTURING
OVERHEAD
Indirect Labor
Depreciation of Factory Building
Depreciation of Factory Equipment
Property Taxes
Manufacturing Supplies
Payroll Taxes and Fringe Benefits
Utilities
Repairs and Maintenance
Miscellaneous
SCHEDULE 2 OPERATING EXPENSES
(IN THOUSANDS OF DOLLARS)
Selling Expenses:
Sales Commissions
Sales Salaries
Bad Debts Expense
Product Warranty
Advertising
Miscellaneous Selling
General Expenses:
Administrative Salaries
Research and Development
Patent Amortization
Payroll Taxes and Fringe Benefits
Depreciation—Office Building
Depreciation—Office Fixtures and Equipment
Depreciation—Autos and Trucks
Depreciation—Warehouses
Accounting and Legal Fees
Other Professional Services
Supplies
Insurance
Printing and Postage
Gain/Loss on Disposal of Plant Assets
Miscellaneous Administrative
*Unaudited.
ded December 31, 20X9 and 20X8 (in thousands of dollars)
Year Ended
12/31/20X9
Year Ended
12/31/20X8
$335.000
$280.000
$ 6.690
219.052
225.742
10.142
227.800
107.200
45.770
61.430
215.600
64.400
42.330
22.070
9.680
(220)
(100)
(400)
15.668
45.762
13.729
32.033
0
$
32.033
$
Year Ended
12/31/20X9*
$
4.000
8.960
13.110
4.542
8.568
1.235
9.803
Year Ended
12/31/20X8
$
4.663
$ 15.320
86.200
101.520
16.150
85.370
31.300
101.719
233.674
237.674
4.500
$ 233.174
218.389
223.052
4.000
$ 219.052
*Year Ended
12/31/20X9
$
5.500
2.000
42.060
6.000
15.042
Year Ended
12/31/20X8
$
5.300
2.000
42.860
5.800
14.600
13.200
16.100
1.222
2.200
$ 103.324
12.400
15.600
1.159
2.000
$ 101.719
Year Ended*
12/31/20X9
Year Ended
12/31/20X8
$
$
$
16.500
1.200
500
1.139
3.311
420
23.070
$
7.550
1.050
700
2.245
800
1.875
320
10.000
750
20
200
450
520
(4.000)
200
22.700
$45.770
$
$
13.800
1.180
900
1.078
2.522
146
19.626
6.677
2.200
700
2.200
800
2.260
300
10.000
720
18
280
240
115
(3.850)
44
22.704
$42.330
Exhibit BB.4
ASSETS
Current Assets
Cash on hand and in banks
Investments in marketable securities
Accounts and notes receivable—trade
Less allowance for doubtful accounts
Brony’s Bikes , Inc., Balance Sheets as of Dece
Year Ended*
12/31/20X9
$12.362
4.200
12.000
(220)
13.200
(800)
11.780
Inventories
Materials and purchased parts
Goods in process
Finished goods
Indirect materials and repair parts
Prepaid Expenses
Deferred Tax Asset—warranty
Total current assets
Property, Plant, and Equipment
Land
Factory building
Less accumulated depreciation
26.800
4.500
15.516
3.400
16.150
4.000
10.142
3.200
50.216
600
400
79.558
4.000
50.000
(14.140)
50.000
(12.140)
35.860
Warehouses and sales offices
Less accumulated depreciation
200.000
(105.000)
Factory equipment
Less accumulated depreciation
360.000
(144.660)
Office building
Less accumulated depreciation
20.000
(8.000)
Office fixtures and equipment
Less accumulated depreciation
10.000
(6.150)
Autos and trucks
Less accumulated depreciation
1.000
(620)
200.000
(95.000)
95.000
320.000
(147.460)
215.340
20.000
(7.200)
12.000
9.000
(5.075)
3.850
380
366.430
Total Property, Plant, and Equipment
Patents and Copyrights
(net of accumulated amortization)
Deposits
Total investments and other assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Notes payable
Accounts payable
Interest payable
Salaries and wages payable
Payroll withholdings
Taxes and fringe benefits payable
Income taxes payable
Estimated product warranty liability
Accrued commissions payable
900
(300)
6.000
340
6.700
340
6.340
$452.328
3.660
10.200
3.400
2.190
510
370
6.000
544
1.400
14.890
18.600
2.200
2.018
490
345
1.800
860
1.200
Total current liabilities
Long-Term Liabilities
Mortgage note payable (10%)
60.000
Deferred tax liability—depreciation
10.600
12% note payable to Bank Two
45.000
Total long-term liabilities
TOTAL LIABILITIES
STOCKHOLDER’S EQUITY
Invested Capital
Preferred stock—$100 par value, 10%
120.000
cumulative, 10,000,000 shares authorized
Common stock, $10 par value, 90,000,000
100.000
shares authorized, 10,000,000 shares issued,
of which 220,000 shares are in the treasury
Paid-in capital in excess of par value of common stock
50.000
Total invested capital
Retained earnings
Total
Less cost of 220,000 shares of treasury stock
TOTAL STOCKHOLDERS’ EQUITY
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
*Unaudited
28.274
60.000
9.800
0
115.600
143.874
120.000
100.000
50.000
270.000
46.607
316.607
(8.153)
308.454
$ 452.328
ance Sheets as of December 31, 20X9 and 20X8 (in thousands of dollars)
Year Ended
12/31/20X8
15.800
5.300
12.400
33.492
560
460
68.012
4.000
37.860
105.000
172.540
12.800
3.925
600
336.725
7.040
$411.777
42.403
69.800
112.203
$
270.000
29.574
299.574
299.574
411.777
Exhibit BB.5
Brony’s Bikes , Inc., Statement of Retained Earnings for the Years Ended Decembe
(in thousands of dollars)
Year Ended
Year Ended
12/31/20X9
12/31/20X8
Retained Earnings—beginning of year
Net Income
Dividends
Retained Earnings—end of year
*Unaudited.
$ 29.574
32.033
(15.000)
$ 46.607
$ 29.771
9.803
(10.000)
$ 29.574
the Years Ended December 31, 20X9 and 20X8
Exhibit BB.6
Brony’s Bikes , Inc., Statement of Cash Flows for the Year Ended December 31, 20
CASH PROVIDED BY OPERATING ACTIVITIES
Net Income
Add (deduct)
Increase in inventories
Decrease in accounts and notes receivable
Increase in prepaid expenses
Increase in deferred tax liability
Decrease in deferred tax asset
Decrease in accounts payable
Increase in interest payable
Increase in salaries and wages payable
Increase in payroll withholdings
Increase in taxes and fringe benefits payable
Increase in income taxes payable
Decrease in product warranty liability
Increase in accrued commissions payable
Depreciation and amortization
Loss on sale of investments
Gain on disposal of plant assets
Loss on decline in market value of securities
Total Cash Provided by Operating Activities
CASH PROVIDED BY FINANCING ACTIVITIES
Issuance of 12% Note Payable to Bank Two
Payment of Dividends
Payment of Mortgage Note Installment
Payment of Notes Payable
Total Cash Provided by Investing Activities
Office fixtures and equipment
Autos and trucks
Sale of Marketable Securities
Purchase of Marketable Securities
Purchase of Treasury Stock
Total Cash Used in Investing Activities
INCREASE (DECREASE) IN CASH
Cash Beginning Balance
Cash Ending Balance
$ 32.033
(16.724)
620
(40)
800
60
(8.400)
1.200
172
20
25
4.200
(316)
200
57.755
198
(4.000)
2.800
$ 70.603
45.000
(15.000)
(10.000)
(1.230)
18.770
(2.000)
(100)
1.102
(3.000)
(8.153)
(92.811)
(3.438)
15.800
$ 12.362
Ended December 31, 20X9 unaudited
WP
A. 1
BRONY’ S BI KES
Anal y t i c Rev i ew Pr oc edur es – Pl anni ng
Dec ember 31, 20X5 – 20X9
Compar at i v e I nc ome St at ement s
( i n t hous ands of dol l ar s )
20X9
20X8
$
Sal es
Cos t of
Goods Sol d
Gr os s Pr of i t
Oper at i ng Ex pens es
Oper at i ng I nc ome
Ot her Ex pens es ( net )
Net I nc ome bef or e Tax es
and Ex t r aor di nar y I t ems
I nc ome Tax es
Net I nc ome bef or e
Ex t r aor di nar y I t ems
Ex t r aor di nar y Gai n( Los s ) Net of Tax
Net
I nc ome
%
20X7
$
%
$280, 000
$215, 600
————$64, 400
$42, 330
————$22, 070
$8, 960
————-
100. 00%
77. 00%
$45, 762
$13, 729
————–
$13, 110
$4, 542
————-
4. 68%
1. 62%
$32, 033
$8, 568
$1, 235
————$9, 803
=============
20X6
$
$335, 000
$227, 800
————-$107, 200
$45, 770
————-$61, 430
$15, 668
————–
$0
————-$32, 033
==============
Pr epar ed by :
Dat e:
Rev i ewed by :
Dat e:
$272, 000
$209, 440
————23. 00%
$62, 560
15. 12%
$41, 400
————7. 88%
$21, 160
3. 20%
$8, 700
————-
3. 06%
0. 44%
3. 50%
$12, 460
$4, 150
————$8, 310
$0
————$8, 310
=============
%
20X5
$
100. 00%
77. 00%
$274, 500
$211, 365
———23. 00%
$63, 135
15. 22%
$42, 000
———7. 78%
$21, 135
3. 20%
$8, 240
———4. 58%
1. 53%
3. 06%
3. 06%
$12, 895
$3, 869
———$9, 026
( $2, 650)
———$6, 376
==========
%
$
100. 00% $266, 800
77. 00% $205, 436
——–23. 00%
$61, 364
15. 30%
$40, 680
——–7. 70%
$20, 684
3. 00%
$8, 150
——–4. 70%
1. 41%
3. 29%
– 0. 97%
2. 32%
%
100. 00%
77. 00%
23. 00%
15. 25%
7. 75%
3. 05%
$12, 534
$3, 760
———
4. 70%
1. 41%
$8, 774
3. 29%
$0
——–$8, 774
=========
0. 00%
3. 29%
WP A.2
BRONY’S BIKES
SALES AND COST OF GOODS SOLD BY PRODUCT LINE
For the Years Ended December 31, 20X9 and 20X8
Analytic Review – Planning
20X9
————— ————- ————-
Total
Grand Prix
Touring
$335,000,036
675454
$75
————$50,659,050
Units
Selling Price per Unit
Total Sales Revenue
Cost per Unit:
Materials
Labor
Overhead
Total Cost of Goods Sold
Percent
100.00%
$15
$11
$25
————$51
$227,788,333
$34,448,154
————— ————$107,211,703
$16,210,896
=============== =============
20X8
————— ————- ————-
Total
Grand Prix
Touring
$280,000,104
524759
$72
————$37,782,648
Units
Selling Price per Unit
Total Sales Revenue
Cost per Unit:
Materials
Labor
Overhead
Total Cost of Goods Sold
Percent
100.00%
$18
25.00%
$9
12.50%
$28
38.89%
————- ————$55
76.39%
$215,573,504
$28,861,745
————— ————$64,426,600
$8,920,903
=============== =============
Prepared by:
Date:
Reviewed by:
Date:
————– ————- ————– ———- ————- ———Phoenix
Touring
Percent
Pike’s Peak
Mountain
Percent
Himalaya
Mountain
498524
$95
————-$47,359,780
984386
100.00%
$135
————-$132,892,110
182441
100.00%
$188
————$34,298,908
$20
$14
$32
————-$66
$32,902,584
————-$14,457,196
==============
$25
$19
$47
————-$91
$89,579,126
————-$43,312,984
==============
$39
$18
$64
————$121
$22,075,361
————$12,223,547
=============
Percent
100.00%
————– ————- ————– ———- ————- ———Phoenix
Touring
423112
$92
————-$38,926,304
Percent
100.00%
Pike’s Peak
Mountain
878009
$131
————-$115,019,179
Percent
100.00%
Himalaya
Mountain
158437
$183
————$28,993,971
Percent
100.00%
$21
22.83%
$30
22.90%
$42
22.95%
$15
16.30%
$20
15.27%
$25
13.66%
$35
38.04%
$51
38.93%
$71
38.80%
————– ————- ————– ———- ————- ———$71
77.17%
$101
77.10%
$138
75.41%
$30,040,952
$88,678,909
$21,864,306
————————————–$8,885,352
$26,340,270
$7,129,665
==============
==============
=============
————- ——Waistliner
Stationary
Percent
233412
$299 100.00%
————$69,790,188
$57
$40
$112
————$209
$48,783,108
————$21,007,080
=============
————- ——Waistliner
Stationary
Percent
202314
$293 100.00%
————$59,278,002
$66
22.53%
$47
16.04%
$115
39.25%
————- ——$228
77.82%
$46,127,592
————$13,150,410
=============
WP A.3
BRONY’S BIKES
COMPARATIVE SCHEDULES OF MANUFACTURING OVERHEAD AND OPERATING EXPENSES
For the Years Ended December 31, 20X9 and 20X8
MANUFACTURING OVERHEAD
Indirect Labor
Depreciation of Factory Building
Depreciation of Factory Equipment
Property Taxes
Manufacturing Supplies
Payroll Taxes and Fringe Benefits
Utilities
Repairs and Maintenance
Miscellaneous
(in thousands of dollars)
Year Ended
Percent
Year Ended
12/31/20X9
of Sales
12/31/20X8
————————–$5,500
$5,300
$2,000
$2,000
$42,060
$42,860
$6,000
$5,800
$15,042
$14,600
$13,200
$12,400
$16,100
$15,600
$1,222
$1,159
$2,200
$2,000
————— ————- ————$103,324
0.00%
$101,719
===============
=============
OPERATING EXPENSES
Selling Expenses:
Sales commissions
Sales salaries
Bad debts expense
Product warranty
Advertising
Miscellaneous selling
$16,500
$13,800
$1,200
$1,180
$500
$900
$1,139
$1,078
$3,311
$2,522
$420
$146
————— ————- ————$23,070
0.00%
$19,626
—————————
General Expenses:
Administrative salaries
$7,550
$6,677
Research and development
$1,…
Purchase answer to see full
attachment