AC 410 All Assignments AC 410 All Assignments | Page 12

of the asset may not be recoverable. As a result, management
developed an estimate of the fair value of the location using a
discounted cash flow model. The estimated fair value of the location
was determined to be $1.5 million, which resulted in an impairment
loss of about $500,000. The undiscounted future cash flows are equal
to $1.7 million.
Problem 13-34
The following are typical questions that might appear on an internal
control questionnaire relating to plant and equipment:
Are subsidiary ledgers for plant and equipment regularly reconciled
with general ledger controlling accounts?
State the purpose of each of the above controls.
Describe the manner in which each of the above procedures might be
tested.
Assuming that the operating effectiveness of each of the above
procedures is found to be inadequate, describe how the auditors might
alter their substantive procedures to compensate for the increased
level of risks of material misstatements.
AC 410 Unit 7 Homework Assignment