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Sandifer's Accounting Service, Inc.
Trial Balance
For the year ended 12/31/19
Accounts		Debit	Credit
Cash		$ 156,500
Accounts Recieveable		116,650
Allowance for Doubtful Accounts			$ 51,250
Supplies		2,950
Prepaid Insurance		1,700
Building		260,000
Equipment		125,000
Land		111,500
Accumulated Depreciation			167,000
Investment in Bonds held to Maturity		24,000
Accounts Payable			5,650
Current Maturity of Note Payable			3,000
Note Payable			170,000
Unearned Revenue			2,000
Interest Payable			1,500
Salaries Payable			1,950
Common stock			49,100
Retained earnings			100,000
Service Revenue			488,700
Advertising Expense		6,000
Depreciation Expense		55,600
Insurance Expense		5,800
Interest Expense		1,800
Rent Expense		6,700
Salaries Expense		155,000
Supplies Expense		2,200
Travel Expense		550
Utilities Expense		6,200
Loss on Sale of Equipment		2,000
Total		$ 1,040,150	$ 1,040,150

ASB 100 Index CX-4: FINANCIAL STATEMENT MATERIALITY WORKSHEET FOR PLANNING PURPOSES Balance Sheet Date: Company: Completed by: Date: Instructions 1. This form should be completed for all audit engagements. See Section 203. The purpose of this form is to determine and document the materiality amount that will be considered suitable for audit planning purposes. 2. Use amounts from the financial statements to be audited or the trial balance from which those financial statements will be prepared whenever available. If not available, use annualized amounts from the most recent interim financial statements. For revenue, use an annualized amount even if the period is shorter than a year. 3. When current amounts are unavailable or when significant audit adjustments to client-prepared accounting data are expected, use historical averages based on the past two or three years. (Attach the calculation on a separate page.) Based on your professional judgment, determine a planning materiality amount using the following table as a guideline. (Amounts should be rounded to two significant digits.) If the Base Amount (larger of total assets or total revenue) is: Over But Not Over $0 $50 thousand $50 thousand $100 thousand $100 thousand $500 thousand $500 thousand $1 million $1 million $5 million $5 million $10 million Planning Materiality is: Amount + (Percent x Base) 0 + 5.5% 1,250 + 3.0% 2,250 + 2.0% 7,500 + 1.0% 9,500 + 0.8% 19,500 + 0.6% 40,000 + 0.4% $10 million $50 million $50 million $100 million 115,000 + 0.25% $100 million 185,000 + 0.18% Example: If the base amount were $3.5 million, then the planning materiality amount would be as follows: $9,500 + (.008 $3,500,000) = $37,500 Round amount to two significant digits: $38,000 Calculation of planning materiality and tolerable misstatement (as well as completion of audit planning, determining the extent of substantive tests, and computing sample sizes) can be automated using PPC's Engagement Manager. For order information, call (800) 323-8724 Index Calculations 1. Planning Materiality. (Complete a, and b.) a. BASE AMOUNT (larger of total revenue or total assets) Total Revenue (Annualize if interim amount is used.) Total Assets b. PLANNING MATERIALITY CALCULATION Amount from Table Percentage from Table Planning Materiality x Base Amount 2. Tolerable Misstatement. Tolerable misstatement is used in computing sample sizes and in making other scope decisions. As a rule of thumb, tolerable misstatement can be computed as follows: Planning Materiality Amount from Line 1b Tolerable Misstatement Factor .75 3. Individually significant Items. The dollar amount used to identify individually significant dollar items can be any amount up to tolerable misstatement. CX-7a provides guidance on determining individually significant items for specific account balances or transaction classes. 1 Round to two significant digits. 2 If reliable estimates can be made of uncorrected known misstatement and likely misstatement, tolerable mis statement may be computed as follows: Uncorrected Planning Known Likely Tolerable Materiality Misstatement Misstatement Misstatement

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