$1.$ As part of the fieldwork of an audit engagement, the senior on the audit obtained and documented an understanding of the company's in$$ternal control relating to accounts receivable and assessed control risk related to accounts receivable at the maximum level. Susan, the staff person assigned to the engagement, requested and obtained from the company an aged accounts receivable schedule listing the total amount owed by each customer as of December $31,$ year $2,$ and sent positive confirmation requests to a sample of the company customers. Review Susan's comments on each of the following confirmations and determine the best conclusion and$/$or follow$-$up procedures for each item$\mathrm{.}2.3.$ Five confirmation letters follow. Assume that all confirmations received have been appropriately signed, unless otherwise noted. For each customer in the table below, review the relevant confirmation letter and the comments at the bottom of each. Then double$-$click on the shaded space in the table, and select the procedure that should be followed to clear the exception, if one exists. Choose only one procedure per confirmation. A procedure may be used once, more than once, or not at all.

February $1,$ year $3$Performance Marine Sales, Incorporated$1284$ River RoadLouisville, Kentucky $40059$Re: Balance at December $31,$ year $2-$ $$267,000$Dear Accounting Manager:$$As of December $31,$ year $2,$ our records indicate your balance with our company as the amount listed above. Please complete and sign the bottom portion of this letter and return the entire letter to our auditors, JS LLP$,$ PO Box $100,$ Orlando, Florida $32806.$A stamped, self$-$addressed envelope is enclosed for your convenience.$$Sincerely$,$Aquatic Jet Products, Incorporated$$The above balance isCorrectXIncorrect $($show amount$)$$$325,000$If incorrect, please provide information that could help to reconcile your account.$$Response: We placed an order for $$58,000$ on December $26,$ year $2.$SignatureTitleDate$$Susan$\text{'}$s note to file:$$Per discussion with the controller, the order for $$58,000$ was shipped FOB shipping point on December $30,$ year $2,$ and was received by the customer on January $3,$ year $3.$ Therefore, no entry has been made to record the sale in year $2.1.$ Performance Marine Sales,$$Incorporated

Multiple choice:

Send a second request for confirmation to the customer.Exception noted; propose adjustment and request that the controller post it to the accounting records.Verify by examining subsequent cash collections and$/$or shipping documents.Verify that additional invoices noted on confirmation pertain to the subsequent year.Not an exception, no further audit work deemed necessary.Not an exception, no adjustment necessary. Determine the sufficiency of allowance for doubtful accounts.

Confirmation Letter #$2$

February $1,$ year $3$West Coast Ski Center, Incorporated$163$ Tide AvenueMonterey, California $93940$Re: Balance at December $31,$ year $2-$ $$414,000$Dear Accounting Manager:As of December $31,$ year $2,$ our records indicate your balance with our company as the amount listed above. Please complete and sign the bottom portion of this letter and return the entire letter to our auditors, JS LLP$,$ PO Box $100,$ Orlando, Florida $32806.$A stamped, self$-$addressed envelope is enclosed for your convenience.Sincerely,Aquatic Jet Products, Incorporated$$The above balance isCorrectXIncorrect $($show amount$)$$$320,000$If incorrect, please provide information that could help to reconcile your account.$$Response: We made a payment of $$94,000$ on December $12,$ year $2.$SignatureTitleDate$$Susan$\text{'}$s note to file:$$Per discussion with the controller, the company received the payment of $$94,000$ on December $15,$ year $2,$ and posted it to Other Income.$2.$ West Coast Ski Center,$$Incorporated

Multiple choice:

Send a second request for confirmation to the customer.Exception noted; propose adjustment and request that the controller post it to the accounting records.Verify by examining subsequent cash collections and$/$or shipping documents.Verify that additional invoices noted on confirmation pertain to the subsequent year

Not an exception, no further audit work deemed necessary.

Not an exception, no adjustment neccessary. Determine sufficency of allowance for doubtful accounts

Confirmation Letter #$3$

February $1,$ year $3$ Fish & Ski World, Incorporated $5660$ Ocean Blvd$.$Port Arkansas, Texas $78373$Re: Balance at December $31,$ year $2-$ $$72,000$Dear Accounting Manager:As of December $31,$ year $2,$ our records indicate your balance with our company as the amount listed above. Please complete and sign the bottom portion of this letter and return the entire letter to our auditors, JS LLP$,$ PO Box $100,$ Orlando, Florida $32806.$A stamped, self$-$addressed envelope is enclosed for your convenience.Sincerely,Aquatic Jet Products, Incorporated$$The above balance isCorrectXIncorrect $($show amount$)$$$163,000$If incorrect, please provide information that could help to reconcile your account.$$Response: Per our records, the following invoices are outstanding:$$Invoice #$4212$$$72,000$Invoice #$4593$$$66,000$Invoice #$4738$$$25,000$SignatureTitleDate$$Susan$\text{'}$s note to file:$$Invoices #$4593$ and $4738$ are not on the A$/$R aging report at December $31,$ year $2.3.$ Fish & Ski World,$$Incorporated

Multiple choice:

Send a second request for confirmation to the customer. Exception noted; propose adjustment and request that the controller post it to the accounting records.Verify by examining subsequent cash collections and$/$or shipping documents.Verify that additional invoices noted on confirmation pertain to the subsequent year.Not an exception, no further audit work deemed necessary.Not an exception, no adjustment necessary.Determine the sufficencyof allowance for doubtful accounts.

Confirmation Letter #$4$

February $1,$ year $3$NC Boating Center, Incorporated$110$ Windward Blvd$.$Tierra Verde, Florida $33715$Re: Balance at December $31,$ year $2-$ $$239,000$Dear Accounting Manager:As of December $31,$ year $2,$ our records indicate your balance with our company as the amount listed above. Please complete and sign the bottom portion of this letter and return the entire letter to our auditors, JS LLP$,$ PO Box $100,$ Orlando, Florida $32806.$A stamped, self$-$addressed envelope is enclosed for your convenience.Sincerely,Aquatic Jet Products, Incorporated$$The above balance isCorrectXIncorrect $($show amount$)$$$$If incorrect, please provide information that could help to reconcile your account.$$Response: We cannot determine the balance due at December $31,$ year $2.$SignatureTitleDate$$Susan$\text{'}$s note to file:No amount was confirmed on the response letter.$4.$ NC Boating Center,$$Incorporated

Multiple Choice:

Send a second request for confirmation to the customer.Exception noted; propose adjustment and request that the controller post it to the accounting records.Verify by examining subsequent cash collections and$/$or shipping documents.Verify that additional invoices noted on confirmation pertain to the subsequent year.Not an exception, no further audit work deemed necessary.Not an exception, no adjustment necessary. Determine the sufficiency of allowance for doubtful accounts.

Confirmation Letter #$5$

February $1,$ year $3$Desert Boats$2135$ W$.$ Lane Ave.Tempe, Arizona $85287$Re: Balance at December $31,$ year $2-$ $$60,000$Dear Accounting Manager:As of December $31,$ year $2,$ our records indicate your balance with our company as the amount listed above. Please complete and sign the bottom portion of this letter and return the entire letter to our auditors, JS LLP$,$ PO Box $100,$ Orlando, Florida $32806.$A stamped, self$-$addressed envelope is enclosed for your convenience.Sincerely,Aquatic Jet Products, Incorporated$$The above balance isCorrectXIncorrect $($show amount$)0$If incorrect, please provide information that could help to reconcile your account.$$Response: We paid the entire amount on December $30,$ year $2.$ So the balance is completely incorrect.$$SignatureTitleDate$$Susan$\text{'}$s note to file:I found cash recorded as received in the cash receipts journal on January $3,$ year $3.5.$ Desert Boats

Multiple choice:

Send a second request for confirmation to the customer.Exception noted; propose adjustment and request that the controller post it to the accounting records. button u

Verify by examining subsequent cash collections and$/$or shipping documents.Verify that additional invoices noted on confirmation pertain to the subsequent year.Not an exception, no further audit work deemed necessary.Not an exception, no adjustment necessary. Determine the sufficiency of allowance for doubtful accounts.