A few things to keep in mind:

a. Cash has not been paid out as of December 31; therefore,

cash should not be credited.

b. Read the last two sentences of the first paragraph again. The

auditor is only recommending adjustments for material items.

c. Pay attention to the dates the goods or services were

received. You only want to record liabilities for items that actually

relate to December.

Problem 4 You are in charge of the audit of Ortega Corporation for the year ended December 31, 2022. One of the auditors on your team, David Perez, is currently performing procedures to search for unrecorded liabilities. Materiality for this test was assessed at $5,000. Adjustments are only recorded for items equal to, or exceeding materiality. David has identified the following items from the check register which are not included in accounts payable on December 31. Vendor Check Check date Amount Nature of the expenses # 1333 1336 World Distributors, orated Breen, Esquire one Services, Incorporated processing Paychecks io Trucking Company cash s Forklift Repairs s Glass Distribution Center 1/6/2023 S 3,500 Water coolers in office and warehouse delivered 12/31/2022 1334 1/6/2023 S 6,000 Corporate legal services for December 2022 1335 1/8/2023 S 6,500 December, 20022, telephone and computer services 1/10/2023 $ 25,500 Biweekly payroll (12/25/2022-1/7/2023) 1337 1/10/2023 S Trucking services 12/4/20221/3/2023, deliveries made evenly throughout the 45,601 period 1338 1/17/2023 S 2,002 Replenish petty cash box 1339 1/22/2023 S Received new forklift on 12/29/2022, ordered on 12/18/2022 11,000 12,230 Inventory ordered 12/20/2022, delivered 12/31/2022 1341 1/24/2023 $ 25,500 Biweekly payroll (1/8/2023-1/21/2023) 1342 2/6/2023 S 6,800 Corporate legal services for January 2023 1340 1/23/2023 S processing-Paychecks Breen, Esquire Required: For each of the ten disbursements identified, indicate the adjusting entry that should be recorded. Since no Chart of Account is provided, use a reasonable name for each account needed. If no entry is required, state no entry