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In this mini-case you will focus on performing one aspect of the test of details on the accounts payable balance the search for unrecorded liabilities. To identify possible unrecorded liabilities you will compare the payments made after year end with the accounts payable listing as of the end of the year. In performing this comparison particular attention should be given to any payment made on the disbursements journal for which there was not an accounts payable balance as of year end. Your responsibility is to identify the transactions on the cash disbursements journal that the audit team should investigate and review further to determine if a liability should have been recorded as of year end.

Work paper 11-2 contains a listing of the cash disbursement journal entries made in the first few days of the following year end. Compare the transactions on the cash disbursements journal with the accounts payable listing on work paper 11-1. Use the appropriate tick mark to evidence your review of each transaction.

Work Paper 11-1:

EARTHWEAR CLOTHIERS
Accounts Payable Listing
December 31, 2016
Vendor Name	Amount Due
Aarhus Industries	$	94,840
Alpas Cashmere		34,522
American Apparel		25,407	V
Anderson Clothes, Inc.		345,392
Apparel Concepts		434,032	V
Asian Textile Resource Group		25,646,163	V
C&S Manufacturing Inc.		134,043
CDSB Retail		1,538,902	V
Chami Design Inc.		342,340
Chief Jack International		112,034
Deguire Halden Equipment Leasing		3,475,452	V
Europe By Post Distribution Services		774,892
Fairway Corporation Ltd.		87,232	V
Fashion & Craft		23,452
Industria Americana, Ltda.		14,292,301	V
Mail Works		823,343
Mauler Creations		990,822
Mountain West Properties Group		987,480
MS Leather Factory		40,501	V
National Retail Leaseholdings		1,839,024	V
Southside Apparel		345,346
Stephenson Promotion		69,291
Texwin Pacific Ltd.		105,021	V
Warehouse Solutions Leasing		1,334,921	V
Washington Mfg., Inc.		234,802
Western Wear Textiles		45,475
Zantec Bros.		8,920	V
	$	54,185,950

Work Paper 11-2:

EARTHWEAR CLOTHIERS

Excerpt from EarthWear Cash Disbursements Journal

CASH DISBURSEMENTS JOURNAL

from 1/1/2017 through 1/11/2017

Date

Check(C)/ Wire(W) #

Voucher#

Description

Payee

G/L Account #

Cash

1/1/2017

W:1863

195948

Inventory PO# 627-2561-1818

Apparel Concepts

12087-25201-5608971-113

254,032

(Click to select) F S

1/1/2017

C:57698

195949

Inventory PO# 627-2561-1821

American Apparel

11023-25201-1435149-881

25,407

(Click to select) F S

1/2/2017

W:1864

195950

Inventory PO# 627-2561-1822

Texwin Pacific Ltd.

15237-56213-8146523-300

105,021

(Click to select) F S

1/3/2017

C:57699

520444

Building Supply

Lewis Hardware

33000-91200-1253000-100

20,536

(Click to select) F S

1/3/2017

C:57700

195951

Inventory PO# 627-2561-1823

MS Leather Factory

11023-25750-4152610-108

40,501

(Click to select) F S

1/4/2017

C:57701

265152

Advertising

Stephenson Promotion

55126-11592-1001220-100

157,206

(Click to select) F S

1/7/2017

C:57702

195952

Inventory PO# 627-2561-1825

C&S Manufacturing Inc.

11023-25201-4441563-656

134,043

(Click to select) F S

1/9/2017

C:57703

375929

Utilities

Intermountain Gas

99000-61000-1642000-100

37,554

(Click to select) F S

January Totals to Date

$

494,861

FS