GRACE CORPORATION

Property, Plant, and Equipment-Work Program

Planning Materiality (PM) 1,743,735.30

Tolerable Error (TE) 871,867.65
SAD Nominal Amount (SAD) 87,186.77

Assertion/s Completeness
Inherent Risk Lower
Control Risk Not Rely
CRA Moderate
Scope 10 - 25%
Testing Threshold 217,966.91

Testing Threshold (Key Items Testing)

We select our key items by identifying transactions or balances that:
● Are above a testing threshold and therefore individually important because of their size or
● Meet a qualitative criteria that indicates that they are more likely to contain material misstatements.

We set a percentage of our tolerable error (TE) as a threshold of our substantive testing depending on our CRA for each assertions.

Account type
For asset/income accounts
Minimal
Low
Moderate
Thresholds
High
For liability/ expense accounts
Minimal
Low
Moderate
High

Substantive Procedures
PPE Lapsing PSP

Conclusion

We have completed all planned work steps related to Property, Plant and Equipment and Related depreciation, including primary subst
combined risk assessments and the results of the procedure in this and related areas, we believe that the procedures completed are appro
assertions and their respective risk assessments.

As a result of completing the planned procedures, no audit differences were identified.

 Valuation Notes:
Lower
Not Rely
Moderate
25- 50%
217,966.91

HIGH-LEVEL SUMMARY OF CRA APPLICA

1.) Accomplish the CRA Assessment for ALL

each assertions. 2.) Refer to the table in this tab for the deter
Low end High end 3.) These % are applied to the TE to determ
(% of TE) (% of TE)

75% 100%
50% 75%
25% 50%
10% 25%

25% 50%
15% 25%
10% 15%
5% 10%

Assertions WP Ref. Remarks

E, V A5.1 N/A

ciation, including primary substantive procedures. Based on the related

procedures completed are appropriate for the relevant financial statement
 Inherent Risk Control Risk
Lower Lower
Higher Lower
Lower Higher
Higher Higher

LEVEL SUMMARY OF CRA APPLICATION

complish the CRA Assessment for ALL accounts and their related assertions. Please refer to "SAMPLE CRA ASSESSMENT" t

efer to the table in this tab for the determination of testing thresholds for each account. The testing threshold is going to be used
hese % are applied to the TE to determine the testing threshold
 Combined Risk Assessment (CRA)
Minimal
Low
Moderate
High

ted assertions. Please refer to "SAMPLE CRA ASSESSMENT" tab

holds for each account. The testing threshold is going to be used in order to determine the samples that are going to be tested
es that are going to be tested for each procedure
GRACE CORPORATION
Property, Plant, and Equipment-Baby Lead

Planning Materiality (PM)

Tolerable Error (TE)
SAD Nominal Amount (SAD)

Assertion/s
Inherent Risk
Control Risk
CRA
Scope
Testing Threeshold (INITIAL)

Scope: Investigated variances

amounting to 10% of Tolerable Error
(P307,200) and 10%

CODE

201
202
203
204
205

202-A
203-A
204-A
205-A

4009
4010
4011
4012
ment-Baby Lead

1,743,735.30
871,867.65
87,186.77

Existence Valuation
Higher Lower
Not Rely Not Rely
High Moderate
10 - 25% 25- 50%
386,708.67 217,966.91

ACCOUNT WP Ref

PROPERTY, LAND, AND EQUIPMENT A5.1

Land 16,500,000.00
Building 53,000,000.00
Furniture and Fixture 3,550,000.00
Transportation Equipment 6,000,000.00
Office Equipment 6,000,000.00
ACCUMULATED DEPRECIATION A5.1.1
Accumulated Depreciation- Building 650,000.00
Accumulated Depreciation- Furniture & Fixture 355,000.00
Accumulated Depreciation- Transportation Equipment 1,200,000.00
Accumulated Depreciation- Office Equipment 426,000.00
DEPRECIATION EXPENSE A5.1
Depreciation Expense- Building -
Depreciation Expense- Furniture & Fixture -
Depreciation Expense- Transportation Equipment -
Depreciation Expense-Office Equipment -
Trial Balance Adjusted
CAJE PAJE
12/31/2011 12/31/2011
81,180,000.00 0.00 81,180,000.00 0.00
16,500,000.00 0.00 16,500,000.00 0.00
53,000,000.00 0.00 53,000,000.00 0.00
3,550,000.00 0.00 3,550,000.00 0.00
6,000,000.00 0.00 6,000,000.00 0.00
2,130,000.00 0.00 2,130,000.00 0.00
(2,631,000.00) 0.00 (2,631,000.00) (2,495,416.67)
(650,000.00) 0.00 (650,000.00) (2,275,000.00)
(355,000.00) 0.00 (355,000.00) (650,000.00)
(1,200,000.00) 0.00 (1,200,000.00) 600,000.00
(426,000.00) 0.00 (426,000.00) (170,416.67)
- 0.00 2,106,000.00
- 0.00 0.00 2,000,000.00
- 0.00 0.00 285,000.00
- 0.00 0.00 (600,000.00)
- 0.00 0.00 421,000.00
 Audited Audited
Variance Change
12/31/2011 12/31/2010
81,180,000.00 - - #DIV/0!
16,500,000.00 0.00 0%
53,000,000.00 0.00 0%
3,550,000.00 0.00 0%
6,000,000.00 0.00 0%
2,130,000.00 0.00 0%
(5,126,416.67) 0.00 0.00 #DIV/0!
(2,925,000.00) 0.00 0%
(1,005,000.00) 0.00 0%
(600,000.00) 0.00 0%
(596,416.67) 0.00 0%
2,106,000.00 0 0 #DIV/0!
2,000,000.00 0.00 0%
285,000.00 0.00 0%
(600,000.00) 0.00 0%
421,000.00 0.00 0%
GRACE CORPORATION
Proposed Adjusting Entries
December 31, 2011

GL Code Account Description

1 Depreciation Expense- Building

Retained Earnings
Accumulated Depreciation- Building

2 Depreciation Expense- Furniture & Fixture

Retained Earnings
Accumulated Depreciation- Furniture & Fixture

3 Accumulated Depreciation- Delivery Transportation

Depreciation Expense- Delivery Transportation

4 Retained Earnings
Depreciation Expense- Office Equipment
Accumulated Depreciation- Office Equipment
 (426,000.00)
3,700,416.67 3,274,416.67
Debit Credit WP Ref

2,000,000.00
275,000.00
2,275,000.00

285,000.00
365,000.00
650,000.00

600,000.00
600,000.00

175,416.67
(421,000.00)
170,416.67
 A5.01
GRACE CORPORATION
Property, Plant and Equipment Lapsing Schedule
December 31, 2011
1
Property, Plant, and Equipment Lapsing Schedule

Account Details

Opening Balances
Land Lot 4, Block 2 PCS 12456-Sucat
Building 2,000 sq.m. concrete building
Building Additional Improvements
Subtotal-Building

Furniture & Fixtures 80 showcases @P5000

40 office tabes and chairs@P24,000
10 conference table with 80 chairs
30 four-drawer steel cabinets
1 office safe-Hobart
50 venitian blinds-FineLine
Air conditioning system
Subtotal-Furniture & Fixture

Delivery Vans 6 Isuzu Crewcab

Subtotal- Delivery Transporation

Office Equipment 10 Personal Computers Pentium

Subtotal-Office Equipment
Accumulated Depreciation (Year 2011)
Building
Furniture & Fixtures
Delivery Transportation
Office Equipment
Net Realizable Value/Year
Building
Furniture & Fixtures
Delivery Transportation
Office Equipment
Olympia Electric Typewriter,142C
Olympia Electric Typwriter,215
10 Electric Fans
For December 31,2011
For December 31,2011
For December 31,2011
For December 31,2011
For December 31,2011
For December 31,2011
For December 31,2011
For December 31,2011

1 PPE Schedule PBC

a recomputed values
AUDIT NOTE:

Objective:
To ensure existence and valuation of property, plant, and equipment by confirming the Property, Plant and
Accumulated Depreciation that are reflected in Grace Corporation's trial balance.

Procedures Performed:
1. Obtained the Schedule of Property, Plant, and Equipment from the client.
2. Compared the balances per PPE schedule and the balance per PPE account in the client's books.
3. Prepared a summary of Property, Plant and Equipment and analysis of depreciation during the year.
4. Recalculated the depreciation charges.

Findings:
No material exceptions were noted.
 Date CV Life Method Salvage Amount
PBC

11/02/2010 CV-11-182 16,500,000.00

11/02/2010 CV-11-182 20 SLM 0.00 33,000,000.00
01/05/2011 CV-1-5 20 SLM 0.00 20,000,000.00
53,000,000.00 650,000.00

06/01/2010 CV-6-2 40 SLM 0.00 400,000.00

06/02/2010 CV-6-3 5 SLM 0.00 480,000.00
08/20/2010 CV-8-10 5 SLM 0.00 600,000.00
07/10/2010 CV-7-10 5 SLM 0.00 240,000.00
07/11/2010 CV-7-11 5 SLM 0.00 280,000.00
08/15/2010 CV-8013 5 SLM 0.00 320,000.00
03/18/2010 CV-3-16 5 SLM 0.00 1,230,000.00
3,550,000.00 355,000.00

12/20/2010 CV-12-20 10 SLM 0.00 6,000,000.00

6,000,000.00 1,200,000.00

08/01/2010 CV-8-01 5 SLM 0.00 2,050,000.00

08/01/2010 CV-8-02 10 SLM 0.00 25,000.00
08/01/2010 CV-8-03 10 SLM 0.00 25,000.00
08/01/2010 CV-8-03 5 SLM 0.00 30,000.00
2,130,000.00 426,000.00

(2,925,000.00)
(1,005,000.00)
(600,000.00)
(596,416.67)

50,075,000.00
2,545,000.00
5,400,000.00
1,533,583.33
 irming the Property, Plant and Equiment and related
ance.

ount in the client's books.

epreciation during the year.
 Depreciation Expense
2010 2011 2012 2013 2014

- - - - -
275,000.00 1,650,000.00 1,650,000.00 1,650,000.00 1,650,000.00
0.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00
275,000.00 2,650,000.00 2,650,000.00 2,650,000.00 2,650,000.00

5,833.33 10,000.00 10,000.00 10,000.00 10,000.00

56,000.00 96,000.00 96,000.00 96,000.00 96,000.00
40,000.00 120,000.00 120,000.00 120,000.00 120,000.00
24,000.00 48,000.00 48,000.00 48,000.00 48,000.00
28,000.00 56,000.00 56,000.00 56,000.00 56,000.00
26,666.67 64,000.00 64,000.00 64,000.00 64,000.00
184,500.00 246,000.00 246,000.00 246,000.00 246,000.00
365,000.00 640,000.00 640,000.00 640,000.00 640,000.00

0.00 600,000.00 600,000.00 600,000.00 600,000.00

0.00 600,000.00 600,000.00 600,000.00 600,000.00

170,833.33 410,000.00 410,000.00 410,000.00 410,000.00

1,041.67 2,500.00 2,500.00 2,500.00 2,500.00
1,041.67 2,500.00 2,500.00 2,500.00 2,500.00
2,500.00 6,000.00 6,000.00 6,000.00 6,000.00
175,416.67 421,000.00 421,000.00 421,000.00 421,000.00
Accumulated Deprecation per Year
275,000.00 2,925,000.00 5,575,000.00 8,225,000.00 10,875,000.00
365,000.00 1,005,000.00 1,645,000.00 2,285,000.00 2,925,000.00
0.00 600,000.00 1,200,000.00 1,800,000.00 2,400,000.00
175,416.67 596,416.67 1,017,416.67 1,438,416.67 1,859,416.67
nse
2015 2016 2017 2018

- - - -
1,650,000.00 1,650,000.00 1,650,000.00 1,650,000.00
1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00
2,650,000.00 2,650,000.00 2,650,000.00 2,650,000.00

10,000.00 10,000.00 10,000.00 10,000.00

96,000.00

106,000.00 10,000.00 10,000.00 10,000.00

600,000.00 600,000.00 600,000.00 600,000.00

600,000.00 600,000.00 600,000.00 600,000.00

2,500.00 2,500.00 2,500.00 2,500.00

2,500.00 2,500.00 2,500.00 2,500.00

5,000.00 5,000.00 5,000.00 5,000.00

precation per Year
13,525,000.00 16,175,000.00 18,825,000.00 21,475,000.00
3,031,000.00 3,041,000.00 3,051,000.00 3,061,000.00
3,000,000.00 3,600,000.00 4,200,000.00 4,800,000.00
1,864,416.67 1,869,416.67 1,874,416.67 1,879,416.67
A5.1.1
GRACE CORPORATION
Lead Schedule of Property, Plant and Equipment
December 31, 2011

Lead Schedule of Property, Plant and Equipment

Accounts WP# Opening balance Additions Disposals

Land A.5.1 16,500,000.00 0.00 0.00

Building A.5.1 53,000,000.00 0.00 0.00

Furniture & Fixture A.5.1 3,550,000.00 0.00 0.00

Delivery Transportation A.5.1 6,000,000.00 0.00 0.00

Office Equipment A.5.1 2,130,000.00 0.00 0.00
Accumulated Depreciation
Buildings A.5.1 650,000.00 0.00 0.00
Furniture & Fixture A.5.1 355,000.00 0.00 0.00
Delivery Transportation A.5.1 1,200,000.00 0.00 0.00
Office Equipment A.5.1 426,000.00 0.00 0.00
Totals
 Closing Balance
Remarks
Per Client's books Per Audit Difference
16,500,000.00 16,500,000.00 0.00
The additional improvements were estimatedly acquired
53,000,000.00 53,000,000.00 0.00 the client, there were no entry was recorded for this and
the building.

The cost of 40 office tablets and office chairs were reco

3,550,000.00 3,550,000.00 0.00
the total units were multiplied by its cost (24,000) the co

6,000,000.00 6,000,000.00 0.00

2,130,000.00 2,130,000.00 0.00

650,000.00 2,925,000.00 (2,275,000.00)

355,000.00 1,005,000.00 (650,000.00)
1,200,000.00 600,000.00 600,000.00
426,000.00 596,416.67 (170,416.67)
(2,495,416.67)
 Remarks

were estimatedly acquired 01.05.2011 however, in the books of

was recorded for this and was added directly to the balance of

d office chairs were recorded at a cost of 480,000. However, if

y its cost (24,000) the cost should be 960,000