Scan each ofthe financial statementsandthetrial balancesincludedin
Exhibits 34 through 37. Comment on any unusual accounts, account
balances, or large, unusual, or lack of expected fluctuations from the
The Lakeside Company:
1. ANALYSIS OF A POTENTIAL AUDIT CLIENT
Benjamin M. Rogers is the president of the Lakeside Company, a retailer
and distributor of consumer electronics (mainly audio and video equipment)
based in Richmond, Virginia. Al
Multiple Choice Questions
1. In 2005, _ was the most significant real asset of U. S. nonfinancial businesses in terms
of total value.
A) equipment and software
C) real estate
D) trade credit
E) marketable securities
Answer: C Difficulty: Easy
master budget is one type of flexible budget. F
flexible budget is calculated at the start of the budget period. F
Informat ion regarding the causes of variances is provided when the master budget is compared with actual results. F
variance is t
In-Class Problems #3
Assume that you are considering the
purchase of a used car for $6,000. You
have been offered the following terms by
your lender: 48-months loan at 6 percent
APR or 36-months loan at 5 percent APR.
You won $250,000. if you invest to the equity portfolio returning 8% per year, how long
will it take you to become a millionaire?
2. Linda has saved $5000 and invested to the CD earning 5% compounded annually,
how long it will take to buy a car that cost
At the market close on Day1, Stock A has a price of $10, Stock B has a price of $20 and Stock C
has a price of $90.
A. What is the value of a price-weighted index of these three stocks at the close of trading?
B. If Stock C splits 2
Problem # 1
What is the difference between a private placement and an IPO? When is one preferred over the
Problem # 2
Explain why IPOs may intentionally be underpriced?
Describe the process of selling a stock short and discus
Solutions for Chapter 4
Audit Risk, Business Risk, and Audit Planning
Business Risk - Those risks that affect the operations and potential outcomes of
Engagement Risk - The risk auditors encounter by being
We must get it, Courtney Lowell, president of Industrial
Fasteners, roared. Without it, were in big trouble. The it Mr. Lowell
referred to is the renewal of a $14 million loan with Community First
Bank. The big trouble he fears is the lack
General Policy for Homework
Due date and time: At the beginning of the class. As soon as you come to the class, put them on
my desk. Otherwise, all will be recorded as Late and no timeliness point. After class, none will be
accepted for any reason. NO poi
Using the table below answer the following questions:
US government bonds and notes
A. What is the price at which would you buy this Treasury Note?
B. What is the price at which the
You heard that there will be another tenge devaluation; this time by 35%. You
notice that Limpopo is offering a bid of 145 and an ask of 147.
A. What would be the new (after devaluation) exchange rates?
B. If you had 10,000 tenge ho
Turn to the figure 2.8 page 37 of your textbook and look at the listing for General Dynamics.
A. What is the annual dividend yield?
B. What was the firms closing price the day before?
C. What must be its earnings per share?
D. How m
1. What is meant by broadband communications?
Generally means a telecommunications system that can exchange data very quickly.
2. Describe the elements and steps involved in the telecommunications process.
Telecommunication devices relay si