JIT Manufacturing has a 31 December balance date. The physical inventory for JIT Manufacturing was taken on 30 December 20X9, rather than 31 December, because the client had to operate the plant for a special order on the last day of the year. At the time of the client's physical count, you observed that acquisitions represented by receiving report number 2631 and all preceding ones were included in the physical count, whereas inventory represented by succeeding numbers was excluded. On the evening of 31 December you stopped by the plant and noted that inventory represented by receiving report numbers 2632 to 2634 was received subsequent to the physical count but before the end of the year. You later noted that the final inventory on the financial statements contained only those items included in the physical count. In testing accounts payable at 31 December 20X9, you obtain a schedule from the client to aid you in testing the adequacy of the cutoff. The following schedule includes the information that you haven't yet resolved:

REQUIRED
a. Explain the relationship between inventory and accounts payable cutoff.
b. For each of the receiving reports, state the misstatement in inventory or accounts payable, if any exists, and prepare an adjusting entry to correct the financial statements, if a misstatement exists.
c. Which of the misstatements in (b) are most important? Explain.

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Information on the vendor's invoice Amount currently included in or Receiving Amount of report number FOB origin or destination vendor's xcluded from accounts payable* Shipping date Invoice nvoice date 30/12/X930/12X9 Origin 2631 2632 2633 2634 2635 2636 2637 2638 $2619.26 3709.16 5182.31 6403.00 8484.91 5916.20 7515.50 240787 Included Excluded Included Excluded Included Excluded Excluded Excluded 26/12/X9 31/12/X926/12x9 Origin 16/12/X9 28/129 31/129 Origin 03/01/X0 31/12/X9 05/01/x0 26/12x9 Origin 15/12/X9 Destination 27/12X9 Destination Destination 31/12/X903/01X0 Origin