1. Prepare a horizontal and veritical analysis of the Balance Sheet and the Income Statement. |
2. Based on the results of your vertical and horizontal analyses, which accounts appear out of alignment? Provide a brief analysis of the relationships between the accounts. |
3. Using the Schedule of Equipment and Leasehold Improvements and the Depreciation Schedule, analyze the reasonableness of the depreciation expense for each fixed-asset category on a yearly basis and explain your findings. Assume fixed assets have a 5-year life and a mid-year purchase date. |
4. Based on your conclusions in question 3 regarding equipment, which fraud scheme(s) might cuase this activity and what additional procedures might you perform? |
5. Based on your conclusions in question 3 regarding leasehold improvements, which fraud scheme(s) might cause this activity and what additional procedures might you perform? |
6. Does the relationship between Accounts Receivable and the Allowance for Doubtful Accounts appear reasonable? Why or why not? |
Prepare a horizontal and vertical analysis of the Balance Sheet and the Income Statement.
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