H-1 CH 2-25-X3
MARKRICH SPORTSWORLD, INC. PROPERTY TAXES PAYABLE DECEMBER 31, 19X2
Accrual at 1-1-X2 Accrual for 19X2 Land and Building Personal Properties Valuation Base Assessment Rate Rate of $4 per $100
3,680
400,000 50,000 450,000 0.20 90,000 0.04
√
ᴓ
√
ᴓ
√
√
3,600
Less Advance Payment
7,280 3,680
Accrual, 12-31-X2
3,600
Total
H √
Agreed to tax statement statement for 19X2 CH
ʋ
Examined approved voucher and cancelled check CH
ᴓ
Compared with book values for reasonableness
Ł
Examined voucher and cancelled check CH RJE
301 Voucher Payable 303 Property Tax Payable
3,600 3,600
Ł
L-10 CH 1-14-X3
MARKRICH SPORTSWORLD, INC. PAYROLL REGISTER TEST DECEMBER 31, 19X2
EMPLOYEE
EMPLOYEE RATE
HRS
GROSS PAY
FEDERAL
NUMBER
Buyer, Some Cash, Tim Collect, Greg Income, Bob Jacobs, Marc Money, Lynda Nicole, Ms. Order, Justin Pay, Bob Price, Will Record, Sam Richards, Michael Salesman, Tom Salesman, Dick Salesman, Harry Receiver, Able Receiver, O.K. Reception, Sue Trucker, Bill Trucker, Jay
110 111
6
80
112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129
6 6 6 6 6 6 6 6
80 80 80 80 80 80 80 80
INSURANCE
120 156 167 177 375 313 313 188 188 188 167 438 120 120 120 120 120 120 120 120
24 31 33 35 75 63 63 38 38 38 33 88 24 24 24 24 24 24 24 24
34 44 47 50 105 88 88 53 53 53 47 123 34 34 34 34 34 34 34 34
10 20 20 20 20 20 20 20 20 20 20 20 10 10 10 10 10 10 10 10
14,987
3,750
751
1,057
310
ᴓ
ᴓ
∆
Agreed to approved time cards CH Footed and traced to general ledger postings CH Recalculated extensions and examined payroll checks CH
Ł
Calculated and traced to employee deduction authorization CH
ᴓ
FICA
ᴓ
ᴓ
ᴓ
Salaries 10,667
5 6 7 7 15 13 13 8 8 8 7 18 5 5 5 5 5 5 5 5
Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł
155 ᴓ
Estimate of Acccrual Taxes Payroll Gross Pay Above Weekly Wages Number of Periods Number of Weeks
UNITED WAY
NET PAY
STATE
480 625 667 708 1,500 1,250 1,250 750 750 750 667 1,750 480 480 480 480 480 480 480 480
Scheduled Prepared By Client
INCOME TAXES WITHHELD
Wages 2,160
Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł Ł
287 368 393 419 910 754 754 444 444 444 393 1,064 287 287 287 287 287 287 287 287
52 112,320
∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆
8,969 ᴓ
12-31 Accrued Wages Employees x Days
24 256,008
∆
x Daily Rate
-X2 9
$ $
5 45 48 2,160
H
H
MARKRICH SPORTSWORLD, INC. SALES TAXES PAYABLE DECEMBER 31, 19X2
Retail sales for Decemver, 19X2 Combined state and local sales tax rate Monthly sales tax collected Less processing fee of 5% Accrual at 12-31-X2
H-3 CH 2-9-X3
62,000 5% 3,100 155 2,945 H
ʋ
Ł
Traced to sales register and sales summary for December CH Traced to rates per sales tax forms CH Examined approved voucher completed sales tax form and cancelled check (paid in January, 19X3)
ʋ
Ł
MARKRICH SPORTSWORLD, INC. SALES TAXES PAYABLE DECEMBER 31, 19X2
Retail sales for Decemver, 19X2 Combined state and local sales tax rate Monthly sales tax collected Less processing fee of 5% Accrual at 12-31-X2
H-3 CH 2-9-X3
62,000 5% 3,100 155 2,945 H
ʋ
Ł
Traced to sales register and sales summary for December CH Traced to rates per sales tax forms CH Examined approved voucher completed sales tax form and cancelled check (paid in January, 19X3)
ʋ
Ł
H-4 CH 2-25-X3
MARKRICH SPORTSWORLD, INC. INCOME TAXES ACCRUALS DECEMBER 31, 19X2 STATE
FEDERAL
INCOME
INCOME
TAXES
TAXES
Balance, 1-1-X2 Payment in 19X2 Exceed accrual Less client entry to elliminate excess with offset to miscellaneous 19X2 monthly accrual: State 12 at $333.33 Federal 12 at $1,000
4,000 3,849 151
10,000 9,838 162
Acccrual at 12-31-X2 (unadjusted)
4,000
Ł
(151)
(162)
4,000 12,000
Less AJE
12,000
(4,000)
Accrual at 12-31-X2
Earnings in 19X2 before taxes Less dividends exclusion Less excluded portion of gain on stock sales Add nondeductible loss on asset trade Less state income taxes Taxable base Tax rate State 10% Federal 22% of $25,000 45% of $ 4,552 Total
Excess Accrual Accrual at 12-31-x2
4,000
8,000
H
H
36,947 1,819 2,346 53
36,947 1,819 2,346 53 3,284 29,552
32,835 3,284
5,500 2,048 3,284
7,548
716
452
4,000
8,000
AJE 308 Federal Income Taxes Payable 905
Ł
4,000
Federal Income Taxes
Agreed to tax rates per state and federal tax returns CH Examined cancelled checks, approved vouchers and tax returns CH
4,000
Ł
I-3 CH 1-17-X3
MARKRICH SPORTSWORLD, INC. NOTES PAYABLE AND INTEREST DECEMBER 31, 19X2
Worldwide Insurance Co. Beginning Balance Payment annual installments Feb 1, 19X2 Interest expense for 19X2 : ($360,000 x 10% x 1/12)-January ($300,000 x 10% x 11/12) Payment annual interest Feb 1, 19X2 Installment reclassification Balance at 12-31-X2
Sun United Bank Beginning Balance Payment annual installments Feb 1, 19X2 Interest expense for 19X2 : ($180,000 x 10% x 1/12)-January ($150,000 x 10% x 11/12) Payment annual interest Feb 1, 19X2 Installment reclassification
NOTES
NOTES
PAYABLE
PAYABLE
INTEREST
INTERES
(LONG-TERM)
CURRENT
PAYABLE
EXPENSE
300,000
∆
60,000 (60,000)
ⱷ
33,000
ⱷ
3,000 27,500
27,500 (33,000)
60,000
(60,000) 240,000
∆
60,000
∆
27,500
∆
150,000
ⱷ
30,000 (30,000)
ⱷ
16,500
ⱷ
30,500
1,500 13,750
13,750 (16,500)
30,000
Balance at 12-31-X2
(30,000) 120,000
∆
30,000
∆
13,750
∆
15,250
Combined at 12-31-X2
360,000
∆
90,000
∆
41,250
∆
45,750
I ⱷ
ⱷ
Agreed to ending balance at 12-31-19X1 CH Computed interest and traced to expense CH Footed CH
I
H
L
√ √
∆
√ √
∆
∆
H-5 CH 1-8-X3
MARKRICH SPORTSWORLD, INC. ACCRUED DIVIDENDS DECEMBER 31, 19X2 SHAREHOLDERS
Michael Richards Marc Jacobs Ms. Nicole Lynda Money Tina Sanders Total
NUMBER OF
DIVIDEND
DIVIDEND
SHARES
PER SHARE
PAYABLE
2000 2000 2000 2000 2000 10000
ᴓ ᴓ ᴓ ᴓ ᴓ
1.20 1.20 1.20 1.20 1.20
6.00
2,400 2,400 2,400 2,400 2,400 12,000 H
ᴓ
Traced to Board of Directors' Minutes CH Examined corresponding stock certificate register for issuance entries CH
H CH 1-8-X3
MARKRICH SPORTSWORLD, INC. ACCRUED LIABILITIES DECEMBER 31, 19X2 PER BOOKS DJUSTMENT 12-31-X2 303 Property Taxes Payable
FINAL 12-31-X2
-
3,600
3,600 H-1
304 Salaries and Wages Payable
2,160
2,160 L-10
305 Accrued Payroll Taxes
5,738
306 Sales Taxes Payable
2,945
2,945 H-3
307 State Income Taxes Payable
4,000
4,000 H-4
308 Federal Income Taxes Payable
12,000
(4,000)
8,000 H-4
309 Interest Payable
41,250
41,250 I-3
310 Dividends Payable
12,000
12,000 H-5
Based on the study of internal controls and the results of audit tests performed, it is my opinion that the accruals are fairly stated at December 31, 19X2 CH
