Marquis Lynch is the chief financial officer of Jaida Ford Company. He prides himself on being able to manage the companys cash resources to minimize the interest expense. Consequently, on the second business day of each month, Marquis pays down or draws cash on Jaida Fords revolving line of credit at Bulldog New Generation Bank in accordance with his cash requirements forecast. You are the auditor. You find the information on this line of credit in the following table. You inquired at Bulldog New Generation Bank and learned that Jaida Ford Companys loan agreement specifies payment on the first day of each month for the interest due on the previous months outstanding balance at the rate of prime plus 1.5 percent. The bank gave you a report that showed the prime rate of interest was 8.5 percent for the first six months of the year and 8.0 percent for the last six months.

Jaida Ford Company Notes Payable Balances
Date		Balance
Jan 1		$	150,000
Feb 1			200,000
Mar 1			200,000
Apr 1			225,000
May 1			285,000
Jun 1			375,000
Jul 1			375,000
Aug 1			430,000
Sep 1			290,000
Oct 1			210,000
Nov 1			172,000
Dec 1			95,000

Required: a.Determine an audit estimate of the amount of interest expense you expect to find as the balance of the interest expense account related to these notes payable. (Do not round intermediate computations. Round your final answers to the nearest whole dollar amount.)

b.Which type of Analytical procedure did use to determine the estimate?

c.Suppose that you find that the interest expense account has a balance of $23,659, related to these notes. What could account for this difference?

d.Suppose that you find that the interest expense account has a balance of $24,400, related to these notes. What could account for this difference?

e.Suppose that you find that the interest expense account has a balance of $25,200, related to these notes. What could account for this difference?