Using the downloaded Excel data, retrieve the file labeled 20X9 Cutoff. (Link) Study WP 6.4,

Inventory Cutoff, and compare it with the voucher register and sales summary portions reproduced in

Exhibits BB.13 and BB.14. Comment on any cutoff misstatements that you detect and determine their

effect on net income. Do the misstatements appear to be intentional or unintentional? Explain.

2. Draft any audit adjustments suggested by the analysis performed in requirement (1). (Remember

that Bronys Bikes maintains perpetual inventory records and adjusts its perpetual inventory to the

physical inventory through the appropriate Cost of Goods Sold accounts.)

Dated Inventory Cutoff December 31, 20X9 by: PURCHASES CUTOFF DATE RECORDED RECEIVING REPORT NO. INVENTORY INCLUDED EXCLUDED VOUCHER NO DATE SHIPPED DATE RECEIVED FREIGHT TERMS COST 12131120X9 12131120X9 112120Y0 113120Y0 113120Y0 114120YO 12456 01-12486 01-12487 01-12488 01-12489 02-13001 02-13002 12127120X9 12126120X9 12128120X9 12129120X9 12130120X9 112120Y0 12130120X9 12131120X9 12131120X9 12131120X9 112120Y0 113120Y0 FOB destination $1.445.900 12458 12459 12460 $962.200 $488.754 $365.400 Excluded$1,879,000 (1 $438.870 (2) (1) Voucher 12460 ras for the purchase of ra materials (2) Voucher 12461as for the purchase of parts SALES CUTOFF SALES INVOICE NUMBER INVENTORY INCLUDED EXCLUDED DATE SHIPPED DATE RECORDED FREIGHT TERMS SELLING PRICE COST 33002 33003 33004 33005 33006 33007 33008 33009 33010 33011 12130120X9 112120Y0 11212008 12131120YO 112120Y0 113120Y0 12131120X9 113120Y0 114120YO 114120YO 12130120X9 12130120X9 12130120X9 12131120X9 12131120X9 12131120X9 12131120X9 12131120X9 114120YO 114120YO $266.800 $881,870 $443.760 $144.600 $773.200 $338.700 $122.900 $1.322.800 $488 900 $788.211 $205.436 excluded $679,040 included $341,695 included $111342 excluded $595,364 included $260.799ncluded $94.633 excluded $1,018,556 included $376,453 ncluded $606,922 ncluded All adjustments of perpetual to physical inventories have been made through Cost of Goods Sold. Examined the folloving documents for a fer days before and after the balance sheet date to determine that transactions ere recorded in the proper accounting period: Receiving Reports All sales are shipped FOB shipping point. Examined freight invoices for incoming shipments to locate possible goods in transit for hich title had passed before year-end. Audit Adjustment 4 1310 Ray Haterials Inventory 2020 Accounts Payable-Trade To record inventory in transit at 121311X9 Audit Adjustment 5 4100 Sales-Grand Pri Touring Bike 4200 Sales-Phoenin Touring Bike 4300 Sales-Pike's Peak Mountain Bike 4400 Sales-Himalaya Mountain Bike 4500 Sales-Haistliner Stationary Bike 1201 Accounts Receivable-Trade To reverse the folloving sales recorded in 20X9: shipped in 20Y0 (goods vere included in 121311X9 inventory]: Sales Account Number 4300 Invoice Number Amount 4100 4200 4400 4500 33003 33004 33006 33007 33009 $881.870 $443.760 $773.200 $338.700 $1.322.800 $322.550 $77,200 $288.700 $44,860 $497,310 $23.400 $55,900 $466.740 $223.060 $410.650 $122.400 $714.58O $32,500 $87,600 $22.300 $88,500 $22.150 $36,680 $0 $51,550 $20,565 $62,375 $88.760 $3.760.330 $1.230.620 $230.435 $1.937.430 $253.050 $108.795 Other Raw Materials Debit Purchased Parts Debit Accounts Payable Credit Derailleurs Debit Materials Debit IndirectRepair Parts Debit Account Number Debit $415,000 $415,000 LaPrix Derailleurs, Ltd Kryolock Steel Supply Crown Manufacturing 212,480 $ 212,480 122,169 $ 78,000 44,169 589,600 589,600 Crystal Manufacturing Inc. Kryolock Steel Supply Crown Manufacturing Palmer & Nile Advertising MedCare HMO, Inc. Denise Vaughan & Co., CPAS Joelson & Wicks, Attorneys at Law Zebra Cleaning Supplies Crew Brothers Manufacturing I aPriy Derailleirs I tr 266,800 266,800 215,000 93,000 10,600 318,600 112,800 41,600 122,500 8340 9435 9450 112,800 41,600 122,500 233,000 9451 233,000 7,865 1,445,900 9460 7,865 1,445,900 962,200 962,200 25.774,213 $ 3,822,900 S 12.430.975 $ 883.411 $776.500 3,484 427 Accounts Receivable Invoice No. Customer Phoenix Peak Himalaya Waistliner 5,550 21,500 31662 Bikes and Parts $ 67,000 325,600 $ 21,750 185,200 $12,600 $27,100 89,600 31663 L Mart Department Stores 29,300 266,800 881,870 443,760 144,600 773,200 338,700 122,900 1,322,800 Dec. 30 Dec. 30 Dec. 30 33002 33003 33004 33005 33006Big Mart Discount Centers 33007 33008 33009 Texas Bike Emporium Rear and Sawbuck Southwest Spokes, Inc. Great Lakes Fitness Centers 55,300 322,550 42,800 23,400 55,900 92,300 466,740 223,060 44,600 32,500 87,600 36,680 2 144,600 51,550 20,565 410,650 122,400 35,500 714,580 Dec. 31 288,700 Leisure Time Truly Bikes L Mart Department Stores 62,375 31,600 88,760 22,300 88,500 40,200 Dec. 31 15,600 2 1 497,310 Dated Inventory Cutoff December 31, 20X9 by: PURCHASES CUTOFF DATE RECORDED RECEIVING REPORT NO. INVENTORY INCLUDED EXCLUDED VOUCHER NO DATE SHIPPED DATE RECEIVED FREIGHT TERMS COST 12131120X9 12131120X9 112120Y0 113120Y0 113120Y0 114120YO 12456 01-12486 01-12487 01-12488 01-12489 02-13001 02-13002 12127120X9 12126120X9 12128120X9 12129120X9 12130120X9 112120Y0 12130120X9 12131120X9 12131120X9 12131120X9 112120Y0 113120Y0 FOB destination $1.445.900 12458 12459 12460 $962.200 $488.754 $365.400 Excluded$1,879,000 (1 $438.870 (2) (1) Voucher 12460 ras for the purchase of ra materials (2) Voucher 12461as for the purchase of parts SALES CUTOFF SALES INVOICE NUMBER INVENTORY INCLUDED EXCLUDED DATE SHIPPED DATE RECORDED FREIGHT TERMS SELLING PRICE COST 33002 33003 33004 33005 33006 33007 33008 33009 33010 33011 12130120X9 112120Y0 11212008 12131120YO 112120Y0 113120Y0 12131120X9 113120Y0 114120YO 114120YO 12130120X9 12130120X9 12130120X9 12131120X9 12131120X9 12131120X9 12131120X9 12131120X9 114120YO 114120YO $266.800 $881,870 $443.760 $144.600 $773.200 $338.700 $122.900 $1.322.800 $488 900 $788.211 $205.436 excluded $679,040 included $341,695 included $111342 excluded $595,364 included $260.799ncluded $94.633 excluded $1,018,556 included $376,453 ncluded $606,922 ncluded All adjustments of perpetual to physical inventories have been made through Cost of Goods Sold. Examined the folloving documents for a fer days before and after the balance sheet date to determine that transactions ere recorded in the proper accounting period: Receiving Reports All sales are shipped FOB shipping point. Examined freight invoices for incoming shipments to locate possible goods in transit for hich title had passed before year-end. Audit Adjustment 4 1310 Ray Haterials Inventory 2020 Accounts Payable-Trade To record inventory in transit at 121311X9 Audit Adjustment 5 4100 Sales-Grand Pri Touring Bike 4200 Sales-Phoenin Touring Bike 4300 Sales-Pike's Peak Mountain Bike 4400 Sales-Himalaya Mountain Bike 4500 Sales-Haistliner Stationary Bike 1201 Accounts Receivable-Trade To reverse the folloving sales recorded in 20X9: shipped in 20Y0 (goods vere included in 121311X9 inventory]: Sales Account Number 4300 Invoice Number Amount 4100 4200 4400 4500 33003 33004 33006 33007 33009 $881.870 $443.760 $773.200 $338.700 $1.322.800 $322.550 $77,200 $288.700 $44,860 $497,310 $23.400 $55,900 $466.740 $223.060 $410.650 $122.400 $714.58O $32,500 $87,600 $22.300 $88,500 $22.150 $36,680 $0 $51,550 $20,565 $62,375 $88.760 $3.760.330 $1.230.620 $230.435 $1.937.430 $253.050 $108.795 Other Raw Materials Debit Purchased Parts Debit Accounts Payable Credit Derailleurs Debit Materials Debit IndirectRepair Parts Debit Account Number Debit $415,000 $415,000 LaPrix Derailleurs, Ltd Kryolock Steel Supply Crown Manufacturing 212,480 $ 212,480 122,169 $ 78,000 44,169 589,600 589,600 Crystal Manufacturing Inc. Kryolock Steel Supply Crown Manufacturing Palmer & Nile Advertising MedCare HMO, Inc. Denise Vaughan & Co., CPAS Joelson & Wicks, Attorneys at Law Zebra Cleaning Supplies Crew Brothers Manufacturing I aPriy Derailleirs I tr 266,800 266,800 215,000 93,000 10,600 318,600 112,800 41,600 122,500 8340 9435 9450 112,800 41,600 122,500 233,000 9451 233,000 7,865 1,445,900 9460 7,865 1,445,900 962,200 962,200 25.774,213 $ 3,822,900 S 12.430.975 $ 883.411 $776.500 3,484 427 Accounts Receivable Invoice No. Customer Phoenix Peak Himalaya Waistliner 5,550 21,500 31662 Bikes and Parts $ 67,000 325,600 $ 21,750 185,200 $12,600 $27,100 89,600 31663 L Mart Department Stores 29,300 266,800 881,870 443,760 144,600 773,200 338,700 122,900 1,322,800 Dec. 30 Dec. 30 Dec. 30 33002 33003 33004 33005 33006Big Mart Discount Centers 33007 33008 33009 Texas Bike Emporium Rear and Sawbuck Southwest Spokes, Inc. Great Lakes Fitness Centers 55,300 322,550 42,800 23,400 55,900 92,300 466,740 223,060 44,600 32,500 87,600 36,680 2 144,600 51,550 20,565 410,650 122,400 35,500 714,580 Dec. 31 288,700 Leisure Time Truly Bikes L Mart Department Stores 62,375 31,600 88,760 22,300 88,500 40,200 Dec. 31 15,600 2 1 497,310