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ACC 410 Week 2 Assignment Analytical Procedures Click Here to Buy the Tutorial http://www.uoptutorial.com/index.php?route=product/product &path=434&product_id=6639 For more course tutorials visit

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Analytical Procedures. In a 2-3 page paper, complete the case below and submit to instructor. Review the income statement for Uden Supply Company and answer the following: a. Describe the purpose of analytical procedures performed in the planning stage of the audit. b. Uden Supply has projected its 2004 gross profit at 31% of sales despite expectation for some shrinkage in margins. On the basis of Uden's operating performance in years 2001 - 2003 project your best guess for 2004. Project 2004 based on the incremental changes for each line item over the last three years. c. Uden’s unaudited financial statements for the current year show a 31 percent gross profit rate. Assuming that this represents a misstatement from the amount that you developed as an expectation, calculate the estimated effect of this misstatement on net income before taxes for 20X4.


d. Indicate whether you believe that the difference calculated in part (c) is material. Explainyouranswer. (50-100 words). Comparative income statement information for Uden Supply Company is presented in the accompanying table. UDEN SUPPLY COMPANY ComparativeIncomeStatement Years Ended December 20X1, 20X2, and 20X3 (Thousands) 20X1 Audited

20X2 Audited

Sales 8,700

9,400

20X3 Audited

10,100

Costofgoodssold6,000

6,500

7,000

Grossprofit

2,900

3,100

2,700

SalesCommissions Advertising Salaries

175 190 202

1,061

Payrolltaxes

61

1,082

1,103

184 192 199

Employeebenefits Rent 60

610 660 710

167 174 181

62

Depreciation

60

63

Supplies

26

28

30

Utilities

21

22

23

66

Legalandaccounting 34

37

Miscellaneous 12

14

13

40

20X4 Expected


Interestexpense 210 228 240 Netincomebeforetaxes80

150 230

Incomestaxes

18

50

Netincome 62

117 180

33


Acc 410 week 2 assignment analytical procedures