On May you were hired by Carla Vista Inc., a closely held company that follows ASPE, as a staff member of its newly created internal auditing department. While reviewing the company's records for and you discover that no adjustments have yet been made for the items listed below.
Interest income of $ was not accrued at the end of It was recorded when received in February
Equipment costing $ was expensed when purchased on July It is expected to have a fouryear life with no residual value. The company typically uses straightline depreciation for all fixed assets.
Research costs of $ were incurred early in They were capitalized and were to be amortized over a threeyear period. Amortization of $ was recorded for and $ for For tax purposes, the research costs were expensed as incurred.
On January Carla Vista leased a building for five years at a monthly rental of $ On that date, Carla Vista paid the following amounts, which were expensed when paid for both financial reporting and tax purposes:
tableSecurity deposit,$
