Chapter13 - answer - CHAPTER 13 SUBSTANTIVE TESTS OF...

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13-1. Rights and obligations are tested by examining the insurance policies and confirming the policy with insurance carriers. In turn, an auditor tests valuation by recalculating unexpired premiums through evidence obtained from the prior year’s unexpired insurance and from current premiums. In addition, to address clerical accuracy, the auditor reconciles premium payments with cash disbursements records, and total expense and unexpired premiums with the general ledger. 13-2. Rhan Corporation Rent Expense per client’s record P 105,000 Less: Rent Expense per audit Last month’s rent P 10,000 Nonrefundable payment amortization P60,000 x 1/12 1,000 11,000 5 Amount to be deferred P 94,000 Answer: ( c ) 13-3. Brown Company Funded past service cost P 59,600 Amortized past service cost 46,700 Deferred pension cost P 12,900 Answer: ( a ) 13-4. Hansen, Inc. Balance of Bond Discount, 1-1-06 P 61,000 Amortized Bond Discount: Nominal Interest P 90,000 Effective Interest 93,900 (3,900 ) Unamortized Bond Discount P 57,100 CHAPTER 13 SUBSTANTIVE TESTS OF PREPAID EXPENSES AND DEFERRED CHARGES
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13-2 Solutions Manual to Accompany Applied Auditing, 2006 Edition Answer: ( a ) 13-5. Walton Company Prepaid rent for 1/2 year (P36,000 x 1/2) P 18,000 Unexpired
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This note was uploaded on 01/03/2012 for the course ACC 284 taught by Professor Sevton during the Spring '11 term at Abraham Baldwin Agricultural College.

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Chapter13 - answer - CHAPTER 13 SUBSTANTIVE TESTS OF...

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