Oceanview Marine Company 21-1

Accounts Receivable Leadsheet

December 31, 2018
2018 % Change
2017 2018 Net Adjusted (before
Account Number and Name Balance Balance Adjustments Balance adjustment)

1100 — Accounts receivable 1,402,229 PY 1,762,682 G/L 25.71%

1110 — Allowance for doubtful

accounts (116,636) PY (116,636) G/L (31,706) (148,342) 21-15 0.00%

Total 1,285,593 1,646,046 28.04%

F F
Tickmark legend

GL Agreed to general ledger.

PY Agreed to prior year working papers.

F Footed with out exception.

ustment)
 Oceanview Marine Company 21-2
Adjusting Journal Entries: Accounts Receivable
December 31, 2018

Account Number and Name Debit Credit

6100 — Bad debts expense $ 31,706.00

1110 — Allowance for bad debts X $ 31,706.00

Explanation: To adjust allowance account to estimated balance at year-end. See wp 21-15.

X - Posted to leadsheet
 Oceanview Marine Company
Planned Tests of Balances Matrix - Accounts Receivable
December 31, 2018

Analytical Substantive Planned Tests

Tests of
Procedures of Balances
Control Risk: Transactions:
Acceptable (High, Sales Cycle Sales Cycle (Extensive,
Audit Risk Inherent Risk Medium, or (High, (High, Medium, Medium, or
Audit Objectives (High, Medium (High, Medium, Low potential Medium, or or Low likelihood Reduced Tests)
or Low) or Low) for misstmts.) Low) of misstmts.)

Detail tie-in M L L L L R

Existence M M L M L M

Completeness M M L L L M

Accuracy M M M L L

Classification M L L H L

Realizable value M M M M L

Cutoff M M M L L

Rights M M M L L

Presentation and
disclosure
M L L L L

Preliminary judgment about materiality: $75,000

Performance materiality for accounts receivable: $40,000

* For each audit objective with extensive or medium planned tests of balances (E or M in column seven), use column eight to indicate
your primary concern(s) about that objective.
 21-6

Comments *

Consideration of
required fraud risk of
improper revenue
recognition .

Incentive for private

company to
understate revenue.

, use column eight to indicate

H E
M M
L R
 Oceanview Marine Company 21-22
Calculation of Sample Size:
Monetary Unit Sampling
December 31, 2018

Audit Area: Accounts receivable

Population: Book value of accounts receivable less than $40,000 = $596,566
Sampling Unit: Dollars in accounts receivable at 12/31/2018

Decision and Facts for Determining Sample Size:

Book value of population = 596,566

Acceptable risk of incorrect acceptance = 20%
Tolerable misstatement = 40,000
Estimated misstatement in the population = 4,000
Ratio of expected to tolerable Misstatement =
Confidence factor (from table below) =

Ratio of expected
to tolerable ARIA
misstatement 5% 10% 20% 30%
0.00 3.00 2.31 1.61 1.21
0.05 3.31 2.52 1.74 1.29
0.10 3.68 2.77 1.89 1.39
0.20 4.63 3.41 2.26 1.62
0.30 6.00 4.33 2.77 1.93

Calculation of Sample Size:

(a) Confidence factor =

(b) Tolerable misstatement as a percentage of
population value = 0.067

Sample size =

Current file 3 - tests of balances, completing the audit

 Oceanview Marine Company 21-23
Sample Selection: Monetary Unit Sampling
December 31, 2018

Audit Area: Accounts receivable

Individually material accounts greater than tolerable misstatement of: 40,000

Amount
Customer Name Confirmed

1 Anthony Underwriters 117,990.00

6 to 13 Various 588,421.00

Total 706,411.00

Sample below tolerable misstatement:

Sampling Interval = Book value of population / Sample Size =
(round down to hundreds)

Amount
Dollar unit Customer Name Confirmed

1 8,000 James Abbott 21,345.00

6 to 30 Various

Current file 3 - tests of balances, completing the audit

 Oceanview Marine Company 21-24
Evaluation of A/R Confirmations:
Monetary Unit Sampling
December 31, 2018

Amounts greater than tolerable misstatement/sampling interval—Confirmation Differences:

Amount of
A/R Balance A/R Balance Amount Reason(s) Client Misstatement,
Customer per Client's per of for if any
Name Records Customer Difference Difference Over (Under)

0.00

0.00

0.00

Net misstatement: 0.00

MUS sample items less than sampling interval — Confirmation Differences:

Amount Tainting
of client (misstatement/
A/R Balance A/R Balance Amount Reason(s) misstatement, AR balance per
per Client's per of for if any client's records)
Customer Name Records Customer Difference Difference Over (Under) Over (Under)

0.00 #DIV/0!

0.00 #DIV/0!

0.00 #DIV/0!

Net misstatement: 0.00

Current file 3 - tests of balances, completing the audit

 Oceanview Marine Company 21-25
Evaluation of A/R Confirmations:
Monetary Unit Sampling (continued)
December 31, 2018

Projected
Incremental Mstmt. Plus
Calculation of Projected Misstatement: Changes in Incremental
Sampling Projected Confidence Allowance for
Customer Name Tainting Interval Misstatement Factor Sampling Risk
0 0.00 1.39 0.00
0 0.00 1.28 0.00
0 0.00 1.24 0.00
0 0.00 1.21 0.00
0 0.00 1.18 0.00

Totals 0.00 0.00

Add basic precision 0 N/A 1.61 0.00

Misstatements - accounts
larger than sampling interval 0.00 N/A 0.00

Total projected misstatement 0.00

Upper limit on misstatements 0.00

Current file 3 - tests of balances, completing the audit

 Oceanview Marine Company 21-26
Evaluation of A/R Confirmations:
Monetary Unit Sampling (continued)
December 31, 2018

Decision (check one):

Accept population as stated.

(No adjustment required for account to be fairly stated.)
Request client to adjust population.
(Account is not fairly stated, but if client corrects misstatements found in sample, account
will be acceptable.)
Expand audit tests.
(Account is not fairly stated, and cannot be made acceptable by correcting misstatements
found in sample.)
Some other action. Specify:

Explain/justify your decision:

Conclusion:

Calculation of Unadjusted Projected Misstatement:

Projected misstatement = 0.00

Less: Any adjusting journal entry (net) =

Unadjusted projected misstatement =

(if greater than the audit misstatement posting threshold,
carry forward to Summary of Uncorrected Misstatements
(workpaper 90-1))

Current file 3 - tests of balances, completing the audit

 Oceanview Marine Company 21-7
Accounts Receivable Listing BC 2/05/2019
December 31, 2018 PBC

Amounts > $40,000

0-30 31-60 61-90 91-120
Customer Name days days days days Total

Anthony Underwriters 0.00 117,990.00 0.00 0.00 117,990.00 S

Bischoff, John 0.00 113,655.00 0.00 0.00 113,655.00 S
Borst, Robert 155,690.00 0.00 0.00 0.00 155,690.00 S
Devine, Dan 121,456.00 0.00 0.00 0.00 121,456.00 S
Geyer, Robert 0.00 68,904.00 0.00 0.00 68,904.00 S
Hayes, Lisa 45,990.00 0.00 0.00 0.00 45,990.00 S
Kelsey, Martin 123,568.00 0.00 0.00 0.00 123,568.00 S
Laubauch, Ken 45,076.00 0.00 0.00 0.00 45,076.00 S
Smith, Linda 47,665.00 0.00 0.00 0.00 47,665.00 S
Southern Construction 0.00 0.00 190,890.00 0.00 190,890.00 S
Swain, Monte 0.00 46,895.00 0.00 0.00 46,895.00 S
Sykora, Larry 0.00 41,567.00 0.00 0.00 41,567.00 S
Underwood, John 0.00 0.00 46,770.00 0.00 46,770.00 S
Total above $40,000 539,445.00 389,011.00 237,660.00 0.00 1,166,116.00
F F F F F, CF
Cumulative
Amounts <$40,000 Total
Abbot, James 0.00 21,345.00 0.00 0.00 21,345.00 21,345.00
Adams, Don 0.00 0.00 0.00 259.45 259.45 21,604.45
Allen, Robert 432.00 0.00 0.00 0.00 432.00 22,036.45
Anderson, Matt 235.67 134.76 125.32 0.00 495.75 22,532.20
Bates, Mary 127.86 213.00 0.00 0.00 340.86 S 22,873.06
Beatty, Lonnie 21,390.00 0.00 0.00 0.00 21,390.00 44,263.06
Benson Realty 113.87 0.00 0.00 0.00 113.87 44,376.93
Binkowski, Alex 654.00 238.31 456.71 0.00 1,349.02 45,725.95
Capicchioni, Rita 432.74 246.87 0.00 0.00 679.61 46,405.56
Chappelle, Daniel 0.00 24,678.00 0.00 0.00 24,678.00 71,083.56
Chiang, Alpha 21,345.00 0.00 0.00 0.00 21,345.00 92,428.56
Coscarelli, Stephen 0.00 0.00 0.00 145.56 145.56 92,574.12
DeLuca, Frank 22,458.00 0.00 0.00 0.00 22,458.00 115,032.12
Detzler, Richard 0.00 0.00 0.00 1,145.00 1,145.00 116,177.12
Dugar, Amitabh 245.68 123.65 0.00 0.00 369.33 S 116,546.45
Elder, Robert 476.89 367.90 543.00 0.00 1,387.79 117,934.24
Elliott, David 345.76 247.69 0.00 0.00 593.45 118,527.69
Erlinger, Eric 4,567.00 0.00 0.00 0.00 4,567.00 123,094.69
Escobar, Susan 0.00 11,567.00 0.00 0.00 11,567.00 134,661.69
Finney, Robert 0.00 0.00 0.00 22,154.75 22,154.75 156,816.44
Franklin, James 21,367.00 0.00 0.00 0.00 21,367.00 178,183.44
Totals this page 94,191.47 59,162.18 1,125.03 23,704.76 178,183.44
Oceanview Marine Company 21-8
BC 2/05/2019
Current file 3 - tests of balances, completing the audit
 21-8
Accounts Receivable Listing BC 2/05/2019
December 31, 2018 PBC

0-30 31-60 61-90 91-120 Cumulative

Customer Name days days days days Total Total

Totals from prior page 94,191.47 59,162.18 1,125.03 23,704.76 178,183.44 178,183.44
Gibson, Marion 0.00 8,900.00 0.00 0.00 8,900.00 187,083.44
Groomer, Michael 23,567.00 0.00 0.00 0.00 23,567.00 210,650.44
Hansen, Karen 213.45 324.65 119.11 0.00 657.21 211,307.65
Hill, Leonard 0.00 0.00 0.00 348.21 348.21 S 211,655.86
Howard, Richard 0.00 11,678.00 0.00 0.00 11,678.00 223,333.86
J & S Research 654.97 0.00 0.00 0.00 654.97 223,988.83
Jenkins, Frank 0.00 0.00 0.00 21,680.00 21,680.00 245,668.83
Jennings, Rocky 0.00 31,676.00 0.00 0.00 31,676.00 277,344.83
Jensen, Deborah 25,456.00 0.00 0.00 0.00 25,456.00 302,800.83
Kattelus, Sue 345.00 368.00 239.00 114.65 1,066.65 303,867.48
Kessler, Henry 0.00 0.00 23,645.00 0.00 23,645.00 327,512.48
Klaver, Earl 766.34 654.78 324.65 0.00 1,745.77 329,258.25
Klinger, Max 11,960.00 0.00 0.00 0.00 11,960.00 341,218.25
Kubczak, Antoni 345.67 213.45 11.64 0.00 570.76 S 341,789.01
LaFave, Laura 0.00 0.00 0.00 214.68 214.68 342,003.69
LaLonde, Jennifer 0.00 0.00 0.00 8,965.00 8,965.00 350,968.69
Lantis, William 214.67 356.94 158.90 325.76 1,056.27 352,024.96
Larson, Debra 114.67 219.43 0.00 0.00 334.10 352,359.06
Lee, Yang 116.45 235.89 0.00 0.00 352.34 352,711.40
Little, Donna 432.11 325.67 0.00 0.00 757.78 353,469.18
Marsh, Max 318.27 0.00 0.00 0.00 318.27 353,787.45
Maurer, Stephen 0.00 0.00 0.00 643.34 643.34 354,430.79
McCabe, Terry 21,643.00 0.00 0.00 0.00 21,643.00 376,073.79
McCall, Joseph 5,865.00 0.00 0.00 0.00 5,865.00 S 381,938.79
Mechem, William 0.00 0.00 6,590.00 0.00 6,590.00 388,528.79
Meier, Diane 0.00 21,456.90 0.00 0.00 21,456.90 409,985.69
Melbourne Corp. 235.00 134.68 437.00 0.00 806.68 410,792.37
Murphy, James 0.00 0.00 0.00 1,145.00 1,145.00 411,937.37
Nash, Dean 0.00 0.00 0.00 3,567.90 3,567.90 415,505.27
O'Connell, Daniel 456.90 532.00 219.05 0.00 1,207.95 416,713.22
Olin, Barry 0.00 0.00 21,397.00 0.00 21,397.00 438,110.22
Peiffer, Jerrold 0.00 4,595.00 0.00 0.00 4,595.00 442,705.22

Current file 3 - tests of balances, completing the audit

 Totals this page 186,895.97 140,833.57 54,266.38 60,709.30 442,705.22
Oceanview Marine Company 21-9
Accounts Receivable Listing BC 2/05/2019
December 31, 2016 PBC
0-30 31-60 61-90 91-120 Cumulative
Customer Name days days days days Total Total

Totals from prior page 186,895.97 140,833.57 54,266.38 60,709.30 442,705.22 442,705.22
Peoples, Jacquelyn 18,654.00 0.00 0.00 0.00 18,654.00 461,359.22
Perkins, Terry 22,456.00 0.00 0.00 0.00 22,456.00 S 483,815.22
Ramirez, Ramon 1,124.75 234.79 0.00 0.00 1,359.54 485,174.76
Ramsey, James 0.00 2,145.00 0.00 0.00 2,145.00 487,319.76
Raymer, Lester 0.00 0.00 2,246.47 0.00 2,246.47 489,566.23
Rose, Anna 2,145.67 1,158.49 2,145.78 0.00 5,449.94 495,016.17
Ryan, Bernard 21,456.00 0.00 0.00 0.00 21,456.00 516,472.17
Savalli, Karen 556.24 346.78 0.00 0.00 903.02 517,375.19
Schmidt, Peter 134.65 334.61 0.00 0.00 469.26 517,844.45
Schroeder, Bruce 0.00 867.00 0.00 0.00 867.00 518,711.45
Simmons, Carol 0.00 13,687.00 0.00 0.00 13,687.00 S 532,398.45
Spanos, Jim 5,698.00 0.00 0.00 0.00 5,698.00 538,096.45
Steinbart, Paul 0.00 0.00 0.00 13,654.00 13,654.00 551,750.45
Taylor, Denzil 0.00 11,321.00 0.00 0.00 11,321.00 563,071.45
Trotter, David 21,456.00 0.00 0.00 0.00 21,456.00 584,527.45
Tuttle, Tom 154.65 214.60 124.60 369.40 863.25 585,390.70
Warner, Wendy 356.90 213.92 0.00 0.00 570.82 585,961.52
Wilcox, Laura 6,890.00 0.00 0.00 0.00 6,890.00 592,851.52
Young, Gregory 0.00 0.00 0.00 1,124.00 1,124.00 593,975.52
Zelli, Arthur 0.00 2,590.48 0.00 0.00 2,590.48 596,566.00
TOTAL < $40,000 287,978.83 173,947.24 58,783.23 75,856.70 596,566.00
F F F F F, CF
TOTAL > $40,000 539,445.00 389,011.00 237,660.00 0.00 1,166,116.00
TOTAL ACCTS RECEIVABLE 827,423.83 562,958.24 296,443.23 75,856.70 1,762,682.00 G/L
F F F F F, CF
21-15 21-15 21-15 21-15

Tickmark Legend

F = Footed without exception.

CF = Cross-footed without exception.

G/L =Agreed to general ledger without exception.

S = Agreed to A/R subsidiary records without exception. Selected all over $40,000.
For amounts below $40,000, began with 5th account; selected every 10th account thereafter.

Current file 3 - tests of balances, completing the audit