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1 Please advise me for the highlight portion because I am not sure if I need to adjust them for 12/31 2 please check my answer to see if they are correct Thank you. Prepare an adjusting journal entry to correct account payable. Potter's maintains perpetual inventory records and the inventory was counted and adjusted on December.31 The list of vouchers payable for Potter's Magic Shoppe at December 31 as follows Vendor Hagrid cleaning Services Hermione's Hats Lockhart Magic Books Malfoy Financial Consultants McGonagall Veterinary Supplies Moaning Myrtle's Mystical capes Nicholas Fancy Headwear Snape's Snakes Weasley's Wands Hogwart's Rentals Total vouchers payable Invoice Date 11/15 12/02 12/31 12/28 12/23 10/14 12/29 12/28 12/28 12/15 Amount 4322.43 2167.76 6489.11 23752.63 4590.60 11529.88 51268.62 36152.45 6400.55 53000.00 199,674.03 Checks written in the following January are : Check Number 1842 1843 Payee Malfoy Financial Consultants Hagrid Cleaning Services 1844 1845 1846 Hogwart's Rentals Lockhart Magic Books Dudley Pastries 1847 1848 1849 1850 1851 1852 1853 1854 Weasley's wands Rowlin's Enterprises McGonagall Veterinary Supplies Nicholas Fancy Headwear Weasley's Wands Hermione's Hats Lockhart Magic Books Hagrid cleaning service 1855 Malfoy Finanical Consultants Description Professional services October monthly cleaning January rent Inventory Catering for office Christmas party Inventory Trademark Inventory Invoice Date 12/28 11/15 Amount 23752.63 4322.43 12/15 12/31 1/15 53000.00 6489.11 6300 12/28 1/1 12/23 6400.55 10,000 4590.60 Inventory Inventory Inventory Inventory November monthly cleaning Professional services 12/29 12/31 12/02 12/31 12/15 51268.62 6400.55 2167.76 5932.89 4322.43 1/28 13888.56 For Problem 8.52, you only need to complete part b., which is to create adjusting journal entries (AJE) to correct Accounts Payable, if adjustments are necessary. The best way to tackle this problem is to start with the first check (in the second table) and determine whether or not is should be accrued, i.e., included in A/P, at 12/31. Once you determine that, see if that amount is already accrued. If it should be accrued but is not, then you need to suggest an AJE. If it should not have been accrued but it is, then you need to suggest an AJE. Use Microsoft Excel or Word to create your AJEs, if any are required. Answer: A/P at Dec.31 Account Inv Amt Written Inv Amt date Checks in date Jan. 1 Moaning Myrtle's Mystical 12/28 $11529.8 N/A N/A N/A Capes 8 2 Nichola's Fancy Headwear 12/28 $51268.6 N/A N/A N/A 2 3 Snap's Snakes 4 Dudley Pasties 5 6 Rowlin's Enterprises Weasley's Wands 7 Weasley's Wands 8 Lockhart Magic Books Inventory 9 Hagrid Cleaning Service(Nov. Sev) Malfoy Financial Consultants Nov.monthly cleaning Professional services 10 12/28 12/31 AJE's 1 Adjusted reason: unrecorded liabilities (1) Dr: Expense-Catering for office Christmas party CR: A/P -Dudley Pasties Inv date 1/15 (2) Dr: A/P-Dudley Pasties Inv date 1/15 CR: Note payable- check #1846 2 Adjusted reason: unrecorded liabilities (1) Dr: Expense- trademark CR: A/P-Rowlin's enterprises Inv. Date 1/1 (2) Dr: A/P-Rowlin's enterprises Inv. Date 1/1 CR: Note payable-check #1848 3 Adjusted reason: duplicate payment (1) Dr: Note payable- Check #1851 CR: A/P- Weasley's Wands Inv. date 12/31 (2) Dr: A/P- Weasley's Wands Inv. Date 12/31 CR: Inventory 4 Adjusted reason: unrecorded liabilities (1) Dr: Inventory CR: A/P- Lockhart Magic Books Inv.date 12/31 (2) Dr: A/P-Lockhart-Magic Books Inv. Date 12/31 CR: Note payable check#1853 5 Adjusted reason: unrecorded liabilities (1) Dr: Expense- Nov. monthly cleaning CR: A/P- Hagrid Cleaning Inv. Date 12/15 (2) Dr: A/P- Hagrid Cleaning Inv. Date 12/15 CR: Note payable check#1854 6 Adjusted reason: unrecorded liabilities (1) Dr: expense- Professional services CR: A/P- Malfoy Financial Consultants Inv. Date 1/28 (2) Dr: A/P-Malfoy Financial Consultants Inv. Date 1/28 CR: Note payable check#1855 N/A N/A #1846 12/28 N/A 1/15 $6300 $6400.55 #1848 #1847 #1851 $6489.89 #1853 1/1 12/2 8 12/3 1 12/3 1 12/1 5 1/28 $10000 $6400.55 $6400.55 Catering for office Christmas party Trademark Inventory $36152.4 5 #1854 #1855 $6400.55 $5932.89 $4322.43 $13888.56 $6300 $6300 $6300 $6300 $10000 $10000 $10000 $10000 $6400.55 $6400.55 $6400.55 $6400.55 $6489.89 $6389.89 $5932.89 $5932.89 $4322.43 $4322.43 $4322.43 $4322.43 $ 13888.56 $13888.56 $13888.56 $13888.56 Tests of Controls Related to Controls and Assertions. Each of the following tests of controls could be performed during the audit of the controls in the production cycle. Required: For each procedure, identify (a) the internal control activity (strength) being tested and (b)the assertion(s) being address. 1 Balance and reconcile detailed production cost sheet to the work-in-process inventory control account Answer: b 2 Scan closed production cost sheets for missing numbers in the sequence Answer: a 3 Vouch a sample of open and closed production cost sheet entries to (a) labor reports and (b)issue forms and materials used reports. Answer: a 4 Locate the material issue forms and determine whether they are (a) Prenumbered, (b)kept in a secure location, and (c)available to unauthorized persons. Answer: a 5 Select several summary journal entries in the work-in process inventory and (a) Vouch them to weekly labor and material reports and to production cost sheets and (b) trace them to the control account. Answer: a 6 Select a sample of the material issue forms in the production department file. Examine them for Issue date and material used report date Production order number Floor supervisor's signature or initials Name and number of material Raw materials stores clerk's signature or initials Material requisition in raw material stores file, noting the date of requisition Answer: a 7 Determine by inquiry and inspection whether cost clerk review dates on reports of units completed for accounting in the proper period. Answer: a