Accounting excel

Information

You should name this spreadsheet using the naming convention “yourname.xlsx”

This Assignment requires that you prepare an Excel Spreadsheet – similar to one that would be used in practice in the planning phase of the audit. The auditor must first develop an expectation, usually based on the performance in the prior period (taking into consideration any unusual circumstances in the current period). We will assume no unusual circumstances in the current period. This company is a new and growing company, and we would expect sales to increase in the current period (compared to the previous period).
Requirements:

(a)

Prepare common size

Income Statement

s and

Balance Sheet

s for the prior and current periods.

(b)

Based on the relationships in the prior period Income Statements and assuming

Sales

of $

900,000

, calculate the expected amounts (dollar amounts) for the various expense accounts (including COGS). All calculations should be completed in the Excel spreadsheet.
(c) Prepare a column that shows the dollar difference between our expected amounts and actual amounts (for expense accounts and COGS). Assuming that the tolerable misstatement for planning purposes on the audit is $ 15,000 highlight accounts that will require more extensive examination and testing (based only on this particular measure).
(d) Some income statement accounts are better analyzed by looking at their relationship to balance sheet accounts (and vice versa). For example, the investment income (an income statement account) is dependent on rates of return and changes in the Investment account (a balance sheet account). In the Foxx Statements, there has been no change in the amount of their investment, so it is reasonable that there has been little change in the

Investment Income

account. Using the Foxx Corporation

Financial Statements

, provide a similar example and an explanation of the relationship.

Financial Statements

(a) (b) (a)

Prior Yr.

Current Yr. Current Yr.

Income Statement

Actual Common Size

Sales

900,000

80,000

$ 100,000

Investment Income $ 20,000

Net Income $ 520,000 614,500

120,000

Balance Sheet

900,000

$ 900,000

600,000

$ 900,000

$ 900,000 900,000

Retained Earnings $ 1,100,000 1,594,500

$ 2,900,000 3,344,500

Foxx Corporation Financial Statements	Name:
For Year Ended December 31, 2011 and 2012
Requirement:	( c )
	Prior Yr.			Current Yr.	$ Difference Between
	Actual		Common Size	Expected	Actual/Expected
$ 800,000
Cost of Goods Sold		$ 100,000	90,000
Depreciation Expense	$	80,000
Administrative Expenses	113,000
Miscellaneous Expenses		$ 20,000	23,000
20,500
	Net Income		$ 520,000		614,500
Statement of Changes in	Retained Earnings
Retained Earnings, Beginning	$ 700,000	1,100,000
Dividends Paid	$	120,000
Retained Earnings, Ending		$ 1,100,000		1,594,500
Cash	$ 225,000	648,000
Accounts Receivable	$ 200,000	284,500
Inventory	$ 75,000	92,000
Investments				$ 900,000
Buildings and Equipment (net)	820,000
Land	$	600,000
Total Assets		$ 2,900,000		3,344,500
Liabilities	850,000
Common Stock
Total Liabilities and Stockholder’s Equity
Requirement d:

USE THIS TEXTBLOCK TO PROVIDE YOUR EXAMPLE AND EXPLANATION