Oceanview Marine Company

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- 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.

adjustment)
 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

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

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.
even), use column eight to
H E
M M
L R
 Oceanview Marine Company 21-27
Calculation of Sample Size:
Difference Estimation
December 31, 2018

Audit Area: Accounts receivable

Population: 86 accounts receivable at 12/31/2018

Decision and Facts for Determining Sample Size:

Population (number of accounts) (N) = 86
Tolerable misstatement (TM) =
Estimated misstatement in the population (E) = 4,000 (overstated)
Estimated population standard deviation (SD) = 1,800
ZA (from table below) =
ZR (from table below) =

Calculation of Sample Size:

SD (ZA + ZR) N = 0.00
TM - E = -4,000.00
(SD (ZA + ZR) N) / (TM - E) = 0.00
[(SD (ZA + ZR) N) / (TM - E)]2 = 0.00
Sample Size =
(round up to whole number)

Acceptable Risk of Incorrect Acceptance (ARIA) (check one):

(ARIA should be based on considerations of acceptable audit risk, inherent risk, control risk, results of preliminary
analytical procedures, and the results of any relevant substantive tests of transactions already performed.)

ARIA ZA (Conf. Coef.)

Low (high amount of assurance needed from tests) 10 1.28

✘ Medium 20 0.84
High (low amount of assurance needed from tests) 30 0.52

Acceptable Risk of Incorrect Rejection (ARIR) (check one):

(ARIR should be based on the costs of increasing the preliminary sample size and normally should be set at high
unless there are unusual factors that affect the cost of increasing the sample size.)

ARIR ZR (Conf. Coef.)

Low 20 1.28
Medium 40 0.84

✘ High 60 0.52

Current file 3 - tests of balances, completing the audit

 Oceanview Marine Company 21-28
Sample Selection:
Difference Estimation
December 31, 2018

Audit Area: Accounts receivable

Sampling Interval = Number of accounts / Sample Size =

(round down to whole number)

Random Starting Point = 1st account

Amount
Customer Name Confirmed

1 Anthony Underwriters 117,990.00

10 Lonnie Beatty 21,390.00

11 to 35 Various Various

Current file 3 - tests of balances, completing the audit

 Oceanview Marine Company 21-29
Evaluation of A/R Confirmations:
Difference Estimation
December 31, 2018

Summary of Confirmation Differences: Amount

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

0.00 0

0.00 0

0.00 0

0.00 0

0.00 0

Totals: 0.00 0

Calculation of Projected Misstatement:

Total amount of misstatement in sample per table above = 0.00

Sample size (# of accounts tested) =
Mean misstatement (total misstatements/sample size) = #DIV/0!
Population size (total # of accounts) =

Projected Misstatement (mean misstatement x population size) = #DIV/0!

Current file 3 - tests of balances, completing the audit

 Oceanview Marine Company 21-30
Evaluation of A/R Confirmations (continued):
Difference Estimation
December 31, 2018

Calculation of Sample Standard Deviation: (round all figures to whole numbers)

(a) Sum of squared misstatements in the sample = 0

Mean misstatement squared = #DIV/0!
(b) Mean misstatement squared x sample size = #DIV/0!
(a) - (b) = #DIV/0!
(c) [(a) - (b)] / (sample size - 1) = #DIV/0!
Square root of (c) = #DIV/0!

Sample Standard Deviation = #DIV/0!

Calculation of Precision Interval:

Population size (N) = 86

ZA (per 21-27) = 0.00 (round to 2 decimals)
(a) N x ZA = 0.00 (round to 2 decimals)

Sample standard deviation (SD) (per above) = #DIV/0!

Square root of sample size = 5.92 (round to 2 decimals)
(b) SD / Square root of sample size = #DIV/0! (round to 2 decimals)

Population size (N) - sample size (n) = 51

[(N) - (n)] / (N) = 0.59 (round to 2 decimals)
(c) Square root of [(N) - (n) / (N)] = 0.77 (round to 2 decimals)

Precision Interval (a x b x c) = #DIV/0!

(round to whole number)

Current file 3 - tests of balances, completing the audit

 Oceanview Marine Company 21-31
Evaluation of A/R Confirmations (continued):
Difference Estimation
December 31, 2018

Calculation of Confidence Limits:

Projected Misstatement (per 21-29) = #DIV/0!

Add: Precision Interval (per 21-30) = #DIV/0!
Upper Confidence Limit = #DIV/0!

Projected Misstatement (per 21-29) = #DIV/0!

Less: Precision Interval (per 21-30) = #DIV/0!
Lower Confidence Limit = #DIV/0!

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:

Current file 3 - tests of balances, completing the audit

 Oceanview Marine Company 21-32
Evaluation of A/R Confirmations (continued):
Difference Estimation
December 31, 2018

Conclusion:

Calculation of Unadjusted Projected Misstatement:

Projected misstatement #DIV/0!

Less: Any adjusting journal entry
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, 2018 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