Apollo Shoes, Inc.

F-1
Fixed Asset Lead Schedule Prepared by
For Year Ended 12/31/2014 Reviewed by
PBC
(Audited) Unaudited Audited
Balance Balance Adjustments Balance
Acct Account Title 12/31/13 12/31/14 Debit Credit 12/31/14 AJE#
#

15000 Land TB $117,000.00 TB $117,000.00 $117,000 F-1-1

15100 Buildings and Land Improvement TB $623,905.92 TB $674,313.92 $50,408.00F-3, F-2 $623,905.92 F-1-1 #7

15200 Machinery, Equipment, Office TB $433,217.10 TB $2,929,097.13 $2,929,097.13 F-1-1

Furn.

Total Assets $1,174,123.02 $3,720,411.05

17000 Accumulated Depreciation TB ($164,000.00) TB ($610,000.00) $1,260.20F-5 $74,021.00 F-5 $682,760.80 F-1-2 #7
$1,010,123.02 $3,110,411.05 $1,260.20 $124,429.00 $2,987,242.25
f f f f f

Note: The addition to machinery, equipment, and office furniture was noted and confirmed in the emails between auditors. The addition
to buildings and land improvement was for repairs from a hurricane. This should be reclassified as repair and maintenance. See F-2
for details of this repair. Adjusting entries:

TB – Agreed to Trial Balance on GA-6

f-Footed

Adjustments
#7 AD $1,260.20
Repair and Maintenance Expense $50,408.00
Building $50,408.00
Depreciation Expense $1,260.20

Depreciation Expense $74,021.00

AD $74,021.00
 Fixed Assets Roll Forward F-1-1
For the Year Ended 12/31/2014

Land:
Year-End Balance 12/31/2013 $117,000.00 F-1
Increases: (purchases for the year) $ 0 F-3
Disposals $ 0 F-3
Year-End Balance $ 117,000.00 F-1

Buildings
Year-End Balance 12/31/2013 $623,905.92 F-1
Increases: (purchase for the year) $ 50,408.00 F-3
Disposals ($ 0.00) F-3
Year-End Balance $674,313.92 D-1

Adjustments
Repair and Maintenance Expense $50,408.00
Building $50,408.00
Adjusted Balance
$623,905.92
& - As noted on F-3 amount is to be expensed and not capitalized

Equipment
Year-End Balance 12/31/2013 $ 433,217.10 F-1
Increases: (purchase for the year) $2,495,880.03 F-3
Disposals ($ 0.00) F-3
Year-End Balance $2,929,097.13 F-1
 F-1-2
Accumulated Depreciation Roll Forward
For the Year Ended 12/31/2014

Year-End Balance 12/31/2013 $164,000.00 F-1

Increases: (depreciation expense) $446,000.00 F-2
Disposals $ 0 F-3
Year-End Balance $610,000.00 F-1
Adjustments:
AD $1,260.20
Depreciation Expense $1,260.20
Depreciation Expense $74,021.00
AD $74,021.00

Total $682,760.80 F-1

 F-2
Fixed Asset Detail
Apollo Shoes, Inc. Listing   Prepared by  
12/31/2014   Reviewed by  BGS
PBC Depreciation Expense
Estimated
Fixed Useful Accumulated
Asset Tag Acquisition Date Description Cost Life 2011 2012 2013 2014 Depreciation
A32767 7/3/2011 Landrover $45,000.00 5 5000 $9,000.00 $9,000.00 ^ $9,000.00 $32,000.00
A32766 9/1/2012 Jaguar $102,000.00 5 $6,800.00 $20,400.00 ^$20,400.00 ^ $47,600.00
A32768 9/1/2012 Landrover $51,000.00 5 $3,400.00 $10,200.00 ^$10,200.00 ^ $23,800.00
A32769 9/1/2012 Landrover $51,000.00 5 $3,400.00 $10,200.00 ^$10,200.00 ^ $23,800.00
A32764 9/1/2012 Landrover $51,000.00 5 $3,400.00 $10,200.00 ^$10,200.00 ^ $23,800.00
2/1/2013 Land $117,000.00 ^ $0.00
2/1/2013 Building $623,905.92 15 $38,127.58 ^$41,593.73 ^ $79,721.31
Miscellaneou
s 2/1/2013 Office furniture $38,178.54 6 $5,832.81 ^$6,363.09 ^ $12,195.90
PC0001 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 ^$1,759.98 ^ $3,373.29
PC0002 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 ^$1,759.98 ^ $3,373.29
PC0003 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 ^$1,759.98 ^ $3,373.29
PC0004 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 ^$1,759.98 ^ $3,373.29
PC0005 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 ^$1,759.98 ^ $3,373.29
PC0006 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 ^$1,759.98 ^ $3,373.29
PC0007 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 ^$1,759.98 ^ $3,373.29
PC0008 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 ^$1,759.98 ^ $3,373.29
PC0009 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 ^$1,759.98 ^ $3,373.29
PC0010 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 $1,759.98 ^ $3,373.29
PC0011 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 $1,759.98 ^ $3,373.29
PC0012 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 $1,759.98 ^ $3,373.29
PC0013 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 $1,759.98 ^ $3,373.29
PC0014 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 $1,759.98 ^ $3,373.29
PC0015 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 $1,759.98 ^ $3,373.29
PC0016 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 $1,759.98 ^ $3,373.29
PC0017 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 $1,759.98 ^ $3,373.29
PC0018 2/1/2013 Smart Chip 5 Ghz PC $5,279.93 3 $1,613.31 $1,759.98 ^ $3,373.29
4/14/2014 Repair/Repaint original building $50,408.00 30 F-3 $1,260.20 F-3 $1,260.20
$1,200,519.9
E00001 7/6/2014 New computing system 0 5 F-3 $120,051.99 ^ $120,051.99
$1,295,359.9
M0001 1/5/2014 Machinery 8 5   F-3     $185,051.43 # $185,051.43
$3,720,411.0 $5,000.0 $26,000.0
5 0 0 $133,000.00 $446,000.00 $610,000.01
@ - Agreed to depreciation expense on X-1 @ F-1
^ - Recalculated without exception
 # - Error in calculation Amount should be $1,295,359.98 ÷ 5 = $259,072. This is a difference of
$74,020.57 (259,072 – 185,051.43). Thus, depreciation expense should be increased. See F-1 for the
entry.
 F-3
Prepared by: BC 2/211
Reviewed by: BGS

According to Sam Shaw, the fixed asset coordinator, Apollo Shoes moved into new quarters and acquired
new equipment in February 2013. Up to that time, Apollo purchased only a fleet of vehicles for key
executives and rented everything else. (All of their salesmen rent cars on an as needed basis for visiting
clients.) Since the move, there have been only three major capital additions:

 Apollo repaired damage to the new building from a hurricane in April. Also, the building was
repainted at the same time. I examined an invoice from ZZZ Best Building Repair Company for
$50,408.00 as well as the cancelled check. This amount should be expensed and not depreciated.
The following adjusting entry is proposed to expense the repairs and reverse the recorded
depreciation:

 The company purchased and installed new machinery to make shoes themselves. Apparently,
they have been buying all the shoes pre-made from an overseas company. The machinery was
installed in January, but hasn’t yet been operated. They hope to start production in January 2015.
I examined an invoice for $1,295,359.98 (F-1.1)as well as the cancelled check. This amount
should be depreciated over a 5 year period and depreciation should begin this year. However, this
machinery was calculated over 7 years. The amount is calculated on F-2. Needs adjusting entry.

 Apollo purchased and installed a new computer system in July. I examined three invoices and
related cancelled checks for $1,200,519.90. One was to Smart Chip for $1,000,000. One was to
FastMove for moving services for 519.90. The third was to Professor Josephine Mandeville for
$200,000 for “system analysis consulting.” All of these expenses should be added to cost of the
equipment and be depreciated over 5 years.

 I scanned the invoices in the Repairs and Maintenance account. Repairs and small capital
additions (<$5,000) were expensed according to company policy.

 I examined the titles of the land, building, and vehicles. All listed “Apollo Shoes, Inc.” as
titleholder. No new land was purchased or disposed of during the year (F-1.1)