The ending bank statement balance at November 30 is $6,750. The bank statement shows a ser

24 Sigma’s bank statement shows an overdrawn balance of $38,600 at 30 June 2005. A check against the company’s cash book revealed the following differences:

1 Bank charges of $200 have not been entered in the cash book.

2 Lodgements recorded on 30 June 2005 but credited by the bank on 2 July $14,700.

3 Cheque payments entered in cash book but not presented for payment at 30 June 2005 $27,800.

4 A cheque payment to a supplier of $4,200 charged to the account in June 2005 recorded in the cash book as a receipt.

Based on this information, what was the cash book balance BEFORE any adjustments?

A $43,100 overdrawn

B $16,900 overdrawn

C $60,300 overdrawn

D $34,100 overdrawn

(a) Explain the purpose of, and procedures for, obtaining written representations. (5 marks)

(b) The directors of a company have provided the external audit firm with an oral representation confirming that the bank overdraft balances included within current liabilities are complete.

Required:

Describe the relevance and reliability of this oral representation as a source of evidence to confirm the completeness of the bank overdraft balances. (3 marks)

(c) You are the audit manager of Violet & Co and you are currently reviewing the audit files for several of your clients for which the audit fieldwork is complete. The audit seniors have raised the following issues:

Daisy Designs Co (Daisy)

Daisy’s year end is 30 September, however, subsequent to the year end the company’s sales ledger has been corrupted by a computer virus. Daisy’s finance director was able to produce the financial statements prior to this occurring; however, the audit team has been unable to access the sales ledger to undertake detailed testing of revenue or year-end receivables. All other accounting records are unaffected and there are no backups available for the sales ledger. Daisy’s revenue is $15·6m, its receivables are $3·4m and profit before tax is $2m.

Fuchsia Enterprises Co (Fuchsia)

Fuchsia has experienced difficult trading conditions and as a result it has lost significant market share. The cash flow forecast has been reviewed during the audit fieldwork and it shows a significant net cash outflow. Management are confident that further funding can be obtained and so have prepared the financial statements on a going concern basis with no additional disclosures; the audit senior is highly sceptical about this. The prior year financial statements showed a profit before tax of $1·2m; however, the current year loss before tax is $4·4m and the forecast net cash outflow for the next 12 months is $3·2m.

Required:

For each of the two issues:

(i) Discuss the issue, including an assessment of whether it is material;

(ii) Recommend procedures the audit team should undertake at the completion stage to try to resolve the issue; and

(iii) Describe the impact on the audit report if the issue remains unresolved.

Notes: 1 The total marks will be split equally between each issue.

2 Audit report extracts are NOT required. (12 marks)

risks, savings, financial, funds, deposits, heart, complex, subject, appear,

repay, as, lose, reserve, returns, balance

Banks are crucial to a country's economy; they serve as the center point of the exchange of money throughout the economy. They gather【1】from small and large depositors, make loans, run the payments system, and coordinate【2】transactions. In developing countries, they usually are the【3】of the financial market and in industrial countries with【4】financial markets they still have a role as primary providers of financial services.

It is difficult for the layman to know if a bank is financially solid. Banks may【5】more solid than they really are. A bank that has loaned money to a borrower who is unable to【6】may keep the bad loan on its【7】sheet us long as possible, though the loan might never be paid back. Moreover, bank【8】are also somewhat precarious. A bank normally cannot refuse to accept deposits, but if, for whatever reason, its depositors【9】confidence in the bank's soundness, they may withdraw their【10】not only from that bank but also from other perfectly sound banks.

In seeking profits, banks lend on the basis of their customers' deposits, but not all deposits can be lent out. A certain share must be held in【11】. Competing institutions providing financial services are in a different situation since they are usually not【12】to reserve and prudential requirements. Firms selling equities do not promise fixed【13】and neither equities nor bonds are payable on demand,【14】are most bank deposits. Because of the pivotal role of banks and their vulnerability to unusual【15】, there seem to be good reasons to protect deposits through an appropriate insurance scheme and, in this way, to protect both the bank and the banking system.

(1)

After preparing a draft statement of profit or loss (before interest and tax) for the year ended 31 March 20X6 (before any adjustments which may be required by notes (i) to (iv) below), the summarised trial balance of Triage Co as at 31 March 20X6 is:

The following notes are relevant:

(i) Triage Co issued 400,000 $100 6% convertible loan notes on 1 April 20X5. Interest is payable annually in arrears on 31 March each year. The loans can be converted to equity shares on the basis of 20 shares for each $100 loan note on 31 March 20X8 or redeemed at par for cash on the same date. An equivalent loan without the conversion rights would have required an interest rate of 8%.

The present value of $1 receivable at the end of each year, based on discount rates of 6% and 8%, are:

(ii) Non-current assets:

The directors decided to revalue the leased property at $66·3m on 1 October 20X5. Triage Co does not make an annual transfer from the revaluation surplus to retained earnings to reflect the realisation of the revaluation gain; however, the revaluation will give rise to a deferred tax liability at the company’s tax rate of 20%.

The leased property is depreciated on a straight-line basis and plant and equipment at 15% per annum using the reducing balance method.

No depreciation has yet been charged on any non-current assets for the year ended 31 March 20X6.

(iii) In September 20X5, the directors of Triage Co discovered a fraud. In total, $700,000 which had been included as receivables in the above trial balance had been stolen by an employee. $450,000 of this related to the year ended 31 March 20X5, the rest to the current year. The directors are hopeful that 50% of the losses can be recovered from the company’s insurers.

(iv) A provision of $2·7m is required for current income tax on the profit of the year to 31 March 20X6. The balance on current tax in the trial balance is the under/over provision of tax for the previous year. In addition to the temporary differences relating to the information in note (ii), at 31 March 20X6, the carrying amounts of Triage Co’s net assets are $12m more than their tax base.

Required:

(a) Prepare a schedule of adjustments required to the draft profit before interest and tax (in the above trial balance) to give the profit or loss of Triage Co for the year ended 31 March 20X6 as a result of the information in notes (i) to (iv) above.

(b) Prepare the statement of financial position of Triage Co as at 31 March 20X6.

(c) The issue of convertible loan notes can potentially dilute the basic earnings per share (EPS). Calculate the diluted earnings per share for Triage Co for the year ended 31 March 20X6 (there is no need to calculate the basic EPS).

Note: A statement of changes in equity and the notes to the statement of financial position are not required.

The following mark allocation is provided as guidance for this question:

(a) 5 marks

(b) 12 marks

(c) 3 marks

The environmental balance among ecological communities is exceedingly complex.

A．almost

B．successfully

C．extremely

D．rarely

The environmental balance among ecological communities is exceedingly complex.

A．almost

B．successfully

C．extremely

D．rarely

The environmental balance among ecological communities is exceedingly complex.

A．almost

B．successfully

C．extremely

D．rarely

There is now no doubt that the world is getting warmer. Data from both the Southern and Northern Hemispheres(地球的半球)shows a(n)【C1】______trend in average temperatures over the【C2】______hundred years. At the moment most scientists are not prepared to stick their necks out and【C3】______a cause to this trend. It is possible that it represents a natural climatic change caused by a【C4】______increase in the sun's radiation output. But these same scientists are【C5】______aware that recent temperature changes are at the limit of known natural【C6】______: it seems increasingly likely that the cause is a(n)【C7】______greenhouse effect.

The basic theory of the greenhouse effect is quite simple. The earth's atmosphere consists【C8】______of oxygen and nitrogen,【C9】______there are small concentrations of various "greenhouse" gases-【C10】______carbon dioxide, water vapor, and methane(沼气)-- which play a very important role in【C11】______the planet's "heat balance". As their name suggests these gases have a similar effect on glass in a greenhouse: They let heat from the sun【C12】______, and keep it in.

The atmosphere is more or less transparent to the【C13】______solar radiation which warms the earth(ground or oceans)on which it falls.【C14】______it has been heated, the earth is warmer than space and gives【C15】______energy in the form. of in visible long-wave infrared radiation. This【C16】______for nighttime cooling. Greenhouse gases【C17】______some of this long-wave radiation, and reradiate it in the lower atmosphere.

The gases【C18】______act rather like a blanket by preventing some infrared radiation from leaving the earth-atmosphere system.【C19】______certain limits, the more greenhouse gases present, the more infrared radiation will become【C20】______, and the higher the surface temperature of the earth.

【C1】

A．current

B．downward

C．upward

D．disturbing

If the banks statement agrees with my bank balance,it does not follow indisputably that the balance is correct.

A．indispensably

B．unquestionably

C．disreputably

D．consequently