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Volgvan
3 years ago
7

Murphy & Johnson is a privately owned manufacturer of small motors for lawnmowers, tractors, and snowmobiles. The components

of its financial statements are (1) income before taxes = $21 million, (2) total assets = $550 million, and (3) total revenues = $775 million.
a) Determine overall materiality and determine tolerable misstatement. Justify your decisions.
Business
1 answer:
Gennadij [26K]3 years ago
6 0

Answer:

Auditing:it enables business managers,consultants,investors,regulatory agencies and creditors to take right decision on financial aspects of the entity,auditing also ensures that the financial information pertaining to he entity is reliable,credible,relevant and time bound.

Explanation:

Murphy & Johnson is a privately-owned company, we should use 5% of net income before taxes. => Planning Materiality = $21 million × 5% = $1.05 million. The planning materiality is not an extremely high number, so we will use 50% to help determine tolerable  misstatement,  as   it   is   a  safer  value   to  use  when  calculating   tolerable  misstatements because it has a lower risk. => Tolerable Misstatement = $1.05 million × 0.50 = $525,000.

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Branch-circuit conductors supplying a single motor compressor shall have an ampacity not less than 125% of either the motor-comp
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A branch circuit consists of the conductors between the final over current safety equipment and the exhaust system(s).It consists of drivers between the final over current protection equipment (OCPD) and the receptacle outlets, the illumination outlet(s).

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Which of the following describes an inferior​ good? A. When consumer income​ increases, the demand for tea increases. B. When co
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Answer:

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