Auditing standards require that audit firmsinvestigate a prospective client (i.e. new client) priorto accepting an engagement. One of the procedures that the successor auditor should carry out to investigate a prospective client is to communicate with the predecessor auditor.

Auditing standards also state that the auditor should establish an understanding with the audit client about the terms of the engagement and should document the understanding through a written communication with the client by means of an engagement letter.

Rodent Limited has been using Fair & Co as its auditor for more than seven years. The company’s management has recently approached your firm to act as the company’s auditor for the year ending 31 December 2020.

Required:

(a) What information should your firm, as the successor auditor, inquire of Fair & Co, the predecessor auditor, before you consider if you could accept the audit engagement?

(b) Why is the understanding mentioned above so important?

(c) What terms should be included in the engagement letter if you have decided to accept the audit engagement?

(d) In establishing the terms of the audit engagement, what topics should be discussed?

Based on the following assumptions, what is the expected Net Income in 2020? Round to the nearest whole dollar

1. Sales projected to grow 25.0% next year
2. CoGS expected to be 40% of sales
3. Interest expense projected to stay fixed at $15
4. SG&A is expected to grow at the same rate it grew as a % of sales in 2019
5. Taxes expected to be 30%

11.26 It is late 2019, and you are a successful executive working in New York for a large company. Tomorrow morning you will have the opportunity to negotiate receiving a $100,000 bonus at the end of the year or an amount of deferred salary in three years. Both you and your employer can earn a before-tax rate of return of 10 percent. Your employer’s combined federal and state marginal tax rate is 25 percent and is expected to remain constant throughout the three-year period. Your combined state and federal marginal tax rate is 37%. However, you are being transferred to Florida (which does not have an individual income tax) at the beginning of next year. Accordingly, you expect your marginal tax rate to drop to 30 percent in 2020 and remain constant through 20200.

1. How much deferred salary would your employer be willing to pay you in three years?
2. How much deferred salary would you be willing to accept from your employer in three years?
3. What should you do?

Tallcrest discounted a $50,000, 45-day, 5% note receivable on August 10 at the local bank, which applies an 8% discount rate. Tallcrest had held the note for 25 days before discounting it. Record the entry on August 10.

These financial statement items are for Fairview Corporation at year-end, July 31, 2017. Salaries and wages payable ................................... $ 2,080 Salaries and wages expense ................................... 57,500 Supplies expense ............................................... 15,600 Equipment ...................................................... 18,500 Accounts payable ............................................. 4,100 Service revenue ................................................ 66,100 Rent revenue ................................................... 8,500 Notes payable (due in 2020) ................................. 1,800 Common stock ................................................ 16,000 Cash ............................................................ 29,200 Accounts receivable .......................................... 9,780 Accumulated depreciation-equipment ................... 6,000 Dividends ..................................................... 4,000 Depreciation expense ....................................... 4,000 Retained earnings (beginning of the year) ................. 34,000 Instructions (a) Prepare an income statement and a retained earnings statement for the year. Fairview Corporation did not issue any new stock during the year. (b) Prepare a classified balance sheet at July 31. (c) Compute the current ratio and debt to assets ratio. (d) Suppose that you are the presid

1. XYZ Manufacturing Company buys 50 tons of coal per month. The price of 50 tons of coal can vary from month to month according to the table shown below:

How much should XYZ budget for coal in 2020? Your answer should be an integer.

2.

Replacement times for computer displays players are normally distributed with a mean of 7.1 years and a standard deviation of 1.4 years.

If you want to provide a warranty so that only 2% of the computer displays will be replaced before the warranty expires, what is the time length of the warranty? Include 1 decimal place in your answer.

3. The amount of time a person waits for an elevator in a building is known to follow a uniform distribution between 0 and 60 seconds. What is the expected value of the wait time for an elevator? Your answer should be an integer. What is the probability that a person will wait between 20 and 35 seconds? Include 2 decimal laces in your answer.

You are a Health & safety Specialist. The date is March 12th 2020 and the world Health Organization has just announced that COVID-19 is a world pandemic the day before. The CEO of the company you work at has called you into her office and requested that you come up with a plan to deal with this issue. She has been hearing about staff complaining that the company is not doing enough to protect them. She asks you to come up with a policy to take care of these trouble makers . She wants you to have something in place to deal with the virus problem and with the complaints. You go back to your office and ponder what to do. State what your course of action would be. How would you go about addressing this request? What are the issues you need to think about as you come up with your policy recommendation? Do not create the policy; just state all the factors you need to consider. Keep in mind that you have CHRP and CRSP designations. The CEO does not.

500 words for this case study.

Time Value of Money Concept

The following situations involve the application of the time value of money concept. Use the full factor when calculating your results.

Use the appropriate present or future value table:

FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1

1. Janelle Carter deposited $9,610 in the bank on January 1, 2000, at an interest rate of 15% compounded annually. How much has accumulated in the account by January 1, 2017? Round to the nearest whole dollar.
$__________

2. Mike Smith deposited $23,480 in the bank on January 1, 2007. On January 2, 2017, this deposit has accumulated to $42,049. Interest is compounded annually on the account. What rate of interest did Mike earn on the deposit? Round to the nearest whole percent.
__________ %

3. Lee Spony made a deposit in the bank on January 1, 2010. The bank pays interest at the rate of 10% compounded annually. On January 1, 2017, the deposit has accumulated to $17,750. How much money did Lee originally deposit on January1, 2010? Round to the nearest whole dollar.
$_________

4. Nancy Holmes deposited $4,740 in the bank on January 1 a few years ago. The bank pays an interest rate of 8% compounded annually, and the deposit is now worth $9,475. How many years has the deposit been invested? Round to the nearest whole year.
_________years

Time Value of Money Concept The following situations involve the application of the time value of money concept. Use the full factor when calculating your results. Use the appropriate present or future value table: FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1 1. Janelle Carter deposited $9,510 in the bank on January 1, 2000, at an interest rate of 10% compounded annually. How much has accumulated in the account by January 1, 2017? Round to the nearest whole dollar. $ 65,296 2. Mike Smith deposited $22,540 in the bank on January 1, 2007. On January 2, 2017, this deposit has accumulated to $48,662. Interest is compounded annually on the account. What rate of interest did Mike earn on the deposit? Round to the nearest whole percent. % 3. Lee Spony made a deposit in the bank on January 1, 2010. The bank pays interest at the rate of 5% compounded annually. On January 1, 2017, the deposit has accumulated to $15,630. How much money did Lee originally deposit on January1, 2010? Round to the nearest whole dollar. $ 4. Nancy Holmes deposited $4,760 in the bank on January 1 a few years ago. The bank pays an interest rate of 10% compounded annually, and the deposit is now worth $13,581. How many years has the deposit been invested? Round to the nearest whole year. years

Time Value of Money Concept

The following situations involve the application of the time value of money concept. Use the full factor when calculating your results.

Use the appropriate present or future value table:

FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1

1. Janelle Carter deposited $9,790 in the bank on January 1, 2000, at an interest rate of 12% compounded annually. How much has accumulated in the account by January 1, 2017? Round to the nearest whole dollar.
$

2. Mike Smith deposited $21,410 in the bank on January 1, 2007. On January 2, 2017, this deposit has accumulated to $42,117. Interest is compounded annually on the account. What rate of interest did Mike earn on the deposit? Round to the nearest whole percent.
%

3. Lee Spony made a deposit in the bank on January 1, 2010. The bank pays interest at the rate of 7% compounded annually. On January 1, 2017, the deposit has accumulated to $12,070. How much money did Lee originally deposit on January1, 2010? Round to the nearest whole dollar.
$

4. Nancy Holmes deposited $6,930 in the bank on January 1 a few years ago. The bank pays an interest rate of 8% compounded annually, and the deposit is now worth $12,827. How many years has the deposit been invested? Round to the nearest whole year.
years