Accrued Liabilities

MARKRICH SPORTSWORLD, INC.
PROPERTY TAXES PAYABLE DECEMBER 31, 19X2
H-1 CH 2-25-X3
Accrual at 1-1-X2 Accrual for 19X2 Land and Building Personal Properties Valuation Base Assessment Rate Rate of $4 per $100
3,680
400,000 50,000 450,000 0.20 90,000 0.04
3,600 Total Less Advance Payment Accrual, 12-31-X2 7,280 3,680 3,600 H
Agreed to tax statement for 19X2 CH Examined approved voucher and cancelled check CH Compared with book values for reasonableness Examined voucher and cancelled check CH
RJE 301 Voucher Payable 303 Property Tax Payable
3,600 3,600
MARKRICH SPORTSWORLD, INC. PAYROLL REGISTER TEST DECEMBER 31, 19X2
L-10 CH 1-14-X3
EMPLOYEE Buyer, Some Cash, Tim Collect, Greg Income, Bob Jacobs, Marc Money, Lynda Nicole, Ms. Order, Justin Pay, Bob Price, Will Record, Sam Richards, Michael Salesman, Tom Salesman, Dick Salesman, Harry Receiver, Able Receiver, O.K. Reception, Sue Trucker, Bill Trucker, Jay
EMPLOYEE RATE HRS NUMBER 110 6 80 111 112 113 114 115 116 117 118 119 120 121 122 6 80 123 6 80 124 6 80 125 6 80 126 6 80 127 6 80 6 80 128 129 6 80
GROSS PAY 480 625 667 708 1,500 1,250 1,250 750 750 750 667 1,750 480 480 480 480 480 480 480 480 14,987
INCOME TAXES WITHHELD FEDERAL STATE 120 24 156 31 167 33 177 35 375 75 313 63 313 63 188 38 188 38 188 38 167 33 438 88 120 24 120 24 120 24 120 24 120 24 120 24 120 24 120 24 3,750 751 Estimate of Acccrual Taxes Payroll Gross Pay Above Weekly Wages Number of Periods Number of Weeks
FICA 34 44 47 50 105 88 88 53 53 53 47 123 34 34 34 34 34 34 34 34 1,057
INSURANCE 10 20 20 20 20 20 20 20 20 20 20 20 10 10 10 10 10 10 10 10 310
UNITED WAY
NET PAY 287 368 393 419 910 754 754 444 444 444 393 1,064 287 287 287 287 287 287 287 287 8,969
5 6 7 7 15 13 13 8 8 8 7 18 5 5 5 5 5 5 5 5 155
Scheduled Prepared By Client

Agreed to approved time cards CH Footed and traced to general ledger postings CH Recalculated extensions and examined payroll checks CH Calculated and traced to employee deduction authorization CH
Salaries 10,667 24 256,008
Wages 2,160 52 112,320
12-31-X2 Accrued Wages Employees x Days x Daily Rate
12-31-X2 9 5 45 48 2,160
$ $
MARKRICH SPORTSWORLD, INC. SALES TAXES PAYABLE DECEMBER 31, 19X2
H-3 CH 2-9-X3
Retail sales for Decemver, 19X2 Combined state and local sales tax rate Monthly sales tax collected Less processing fee of 5% Accrual at 12-31-X2
62,000 5% 3,100 155 2,945 H
Traced to sales register and sales summary for December CH Traced to rates per sales tax forms CH Examined approved voucher completed sales tax form and cancelled check (paid in January, 19X3)
MARKRICH SPORTSWORLD, INC. INCOME TAXES ACCRUALS DECEMBER 31, 19X2 STATE INCOME TAXES 4,000 3,849 151 (151) 4,000 4,000 4,000 H 36,947 1,819 2,346 53 32,835 3,284
H-4 CH 2-25-X3 FEDERAL INCOME TAXES 10,000 9,838 162 (162)
Balance, 1-1-X2 Payment in 19X2 Exceed accrual Less client entry to elliminate excess with offset to miscellaneous 19X2 monthly accrual: State 12 at $333.33 Federal 12 at $1,000 Acccrual at 12-31-X2 (unadjusted) Less AJE Accrual at 12-31-X2 Earnings in 19X2 before taxes Less dividends exclusion Less excluded portion of gain on stock sales Add nondeductible loss on asset trade Less state income taxes Taxable base Tax rate State 10% Federal 22% of $25,000 45% of $ 4,552 Total Excess Accrual Accrual at 12-31-x2
12,000 12,000 (4,000) 8,000 H 36,947 1,819 2,346 53 3,284 29,552
3,284 716 4,000
5,500 2,048 7,548 452 8,000
AJE 308 Federal Income Taxes Payable 905 Federal Income Taxes
4,000 4,000
Agreed to tax rates per state and federal tax returns CH Examined cancelled checks, approved vouchers and tax returns CH
MARKRICH SPORTSWORLD, INC. NOTES PAYABLE AND INTEREST DECEMBER 31, 19X2 NOTES PAYABLE (LONG-TERM) Worldwide Insurance Co. Beginning Balance Payment annual installments Feb 1, 19X2 Interest expense for 19X2 : ($360,000 x 10% x 1/12)-January ($300,000 x 10% x 11/12) Payment annual interest Feb 1, 19X2 Installment reclassification Balance at 12-31-X2
300,000
I-3 CH 1-17-X3 NOTES PAYABLE CURRENT 60,000 (60,000)
INTEREST PAYABLE
33,000
INTEREST EXPENSE
27,500
(33,000) (60,000)
3,000 27,500
240,000
60,000 60,000
27,500
30,500
Sun United Bank Beginning Balance Payment annual installments Feb 1, 19X2 Interest expense for 19X2 : ($180,000 x 10% x 1/12)-January ($150,000 x 10% x 11/12) Payment annual interest Feb 1, 19X2 Installment reclassification Balance at 12-31-X2 Combined at 12-31-X2
150,000
30,000 (30,000)
16,500
13,750
(16,500) (30,000)
1,500 13,750
120,000 360,000 I
30,000 30,000 90,000 I
13,750 41,250 H
15,250 45,750 L
Agreed to ending balance at 12-31-19X1 CH Computed interest and traced to expense CH Footed CH
INTEREST EXPENSE
MARKRICH SPORTSWORLD, INC. ACCRUED DIVIDENDS DECEMBER 31, 19X2 SHAREHOLDERS NUMBER OF SHARES 2000 2000 2000 2000 2000 10000 DIVIDEND PER SHARE 1.20 1.20 1.20 1.20 1.20 6.00
H-5 CH 1-8-X3 DIVIDEND PAYABLE 2,400 2,400 2,400 2,400 2,400 12,000 H
Michael Richards Marc Jacobs Ms. Nicole Lynda Money Tina Sanders Total
Traced to Board of Directors' Minutes CH Examined corresponding stock certificate register for issuance entries CH
MARKRICH SPORTSWORLD, INC. ACCRUED LIABILITIES DECEMBER 31, 19X2
H CH 1-8-X3
PER BOOKSADJUSTMENTS FINAL 12-31-X2 12-31-X2 303 Property Taxes Payable 3,600 3,600 H-1
304 Salaries and Wages Payable
2,160
2,160 L-10
305 Accrued Payroll Taxes
5,738
306 Sales Taxes Payable
2,945
2,945 H-3
307 State Income Taxes Payable
4,000
4,000 H-4
308 Federal Income Taxes Payable
12,000
(4,000)
8,000 H-4
309 Interest Payable
41,250
41,250 I-3
310 Dividends Payable
12,000
12,000 H-5
Based on the study of internal controls and the results of audit tests performed, it is my opinion that the accruals are fairly stated at December 31, 19X2 CH

Accrued Liabilities

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MARKRICH SPORTSWORLD, INC.

PROPERTY TAXES PAYABLE DECEMBER 31, 19X2

400,000 50,000 450,000 0.20 90,000 0.04

RJE 301 Voucher Payable 303 Property Tax Payable

MARKRICH SPORTSWORLD, INC. PAYROLL REGISTER TEST DECEMBER 31, 19X2

FICA 34 44 47 50 105 88 88 53 53 53 47 123 34 34 34 34 34 34 34 34 1,057

Scheduled Prepared By Client

Salaries 10,667 24 256,008

Wages 2,160 52 112,320

12-31-X2 Accrued Wages Employees x Days x Daily Rate

MARKRICH SPORTSWORLD, INC. SALES TAXES PAYABLE DECEMBER 31, 19X2

62,000 5% 3,100 155 2,945 H

H-4 CH 2-25-X3 FEDERAL INCOME TAXES 10,000 9,838 162 (162)

12,000 12,000 (4,000) 8,000 H 36,947 1,819 2,346 53 3,284 29,552

3,284 716 4,000

5,500 2,048 7,548 452 8,000

I-3 CH 1-17-X3 NOTES PAYABLE CURRENT 60,000 (60,000)

30,000 30,000 90,000 I

MARKRICH SPORTSWORLD, INC. ACCRUED LIABILITIES DECEMBER 31, 19X2

304 Salaries and Wages Payable

305 Accrued Payroll Taxes

306 Sales Taxes Payable

307 State Income Taxes Payable

308 Federal Income Taxes Payable

309 Interest Payable

310 Dividends Payable

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