Task #1

Green, CPA, is completing audit procedures for the December 31, year 4, audit of JBU Co., a non-issuer (not a public corporation). An auditor from Green attended the physical inventory observation at year-end. JBU Co. maintains a perpetual inventory system integrated with its general ledger. The auditor noted some issues that require further investigation while reviewing JBU's inventory count sheets and warehouse location maps.

The source documents examined by the auditor are in this file ACCT444CD#1Exhibits.docx (FILE ATTACHED)

The auditor established the following information relating to the inventory count and product lines of JBU.

• There was no product movement on the day of the count.
• The loading dock is part of Warehouse A for the purposes of the count.
• All product lines within each storage area are on the warehouse maps.
• The warehouse map is reflective of the warehouse on the day of the count.
• Inventory values in the perpetual inventory listing are the most recent purchase price.
• Materiality for year-end audit $8,000
• Performance materiality: $5,000

Complete the inventory tasks below by using the information provided in the exhibits:

1. In column B, quantify the required adjustment, if any, to the product line in the perpetual inventory system.

• Enter increases to the perpetual inventory listing as positive whole dollars.
• Enter decreases to the perpetual inventory listing as negative whole do
• If no adjustment to the perpetual inventory listing is required, enter a zero (0).

1. In column C, select the justification for the required audit adjustment, or the reason why no audit adjustment is required, by selecting from the option list provided. A justification is once, more than once, or not used at all.

Assume that there is only one reason for each product line discrepancy

Choices for the Justification

Product lineAdjustment required to inventory balance, if any ($)Justification for the adjustment requiredWidgets - 10mm Widgets - 5mm Hex bolts Other 1 Other 2 Total$

Task #2

Based on the work performed above, select from the option list provided a conclusion on the ending inventory balance. Assume that the auditor performed any follow-up procedures to confirm the initial reasons for the differences identified and therefore any adjustments required are accurate and there are no other adjustments to consider other than those above.

Choices for the Conclusion:

- Enter in - Enter d - If no ad - In column C, adjustment i than once, or - Assume that Select an option below Damaged items not removed from perpetual inventory system Errors in the count Items consigned to company Items consigned to customer were sold Items pulled for sales orders have not yet been processed in the perpetual inventory system Items ready for shipping are f.o.b. destination Items ready for shipping are f.o.b. shipping point Misplacement of inventory items in the warehouse Obsolescence Returns not yet processed in the perpetual inventory system ho audit sed once, more Based on the work perrormed above, select from the option IIst provided a conciusion on the ending inventory balance. Assume that the auditor performed any follow-up procedures to confirm the initial reasons for the differences identified and therefore any adjustments required are accurate and there are no other adjustments to consider other than those above. system. Enter in - Enter d Select an option below - If no ad - In column C, adjustment is than once, or - Assume that Based on the inventory work performed, the inventory balance is materially misstated because the required adjustments identified exceed audit materiality. Based on the inventory work performed, the inventory balance is materially misstated because the required adjustments identified exceed performance materiality. Based on the inventory work performed, the inventory balance is not materially misstated because the required adjustments identified are less than audit materiality. Based on the inventory work performed, the inventory balance is not materially misstated because the required adjustments identified are less than performance materiality. ho audit sed once, more Based on the work performed above, select from the option list provided a conclusion on the ending inventory balance. Assume that the auditor performed any follow-up procedures to confirm the initial reasons for the differences identified and therefore any adjustments required are accurate and there are no other adjustments to consider other than those above