In the audit of OBrian Tools for the year ended December 31, 2009, The senior auditor, Mary Ellen Vercon, lists the following items that she considers material for review by the engagement manager. (Assume that the audit report date is to be Feb. 25, 2010)

1. A $26,000 sale on January 14, 2010, for fabrication tools that was included in inventory at a cost of $35,000.

1. Bonds that were issued on February 16, 2010 in the amount of $5,000,000.

1. Equipment in the amount of $125,000 was purchased on January 30, 2010.

1. A major customer filed bankruptcy on December 15, 2009.

1. Litigation in the amount of $150,000 was settled on February 6, 2010 and is listed as a contingent liability for $140,000 on the 12/31/2009 financial statements.

1. On 1/15/2010 A lawsuit was filed against OBrian for an injury of a customers employee using a tool sold to them by OBrian. The employee was injured on 1/5/2010.

1. On 2/24/2010 OBrian had preliminary discussions with a larger tool company for possible merger or sale.
2. Some of the items listed above would probably be subsequent events. For each of the seven Items listed above, fill in the blanks with either Type I, Type II or not N/A if the item is not a subsequent event.

Item #

Response

Type I, Type II or N/A

1 2 3 4 5 6