You are supervising the audit fieldwork of Star Magic Shop. Harry maintains perpetual inventory records and the inventory was counted and adjusted on December 31, 2017.

The list of vouchers payable to Star Magic Shop at December 31, 2017 is as follows:

Vendor Invoice Date Amount

Aqua Water Service 15-Nov 8,644.86

Basketball Supplies 2-Dec 4,335.52

Classic Milktea House 31-Dec 12,978.22

Drake Tax Consultants 28-Dec 47,505.26

Edna Veterinary Shop 23-Dec 23,059.76

Frappe Town 14-Oct 9,181.20

Glazing Pork Steak House 29-Dec 102,537.24

Honeydue Fruit Stand 28-Dec 72,304.90

Isaac Pharmacy 28-Dec 12,801.10

Jancy Barbershop 15-Dec 106,000.00

Total Vouchers Payable 399,348.06

Checks written in the following January 2018 are as follows

Check No. Payee Description Invoice Date Amount

1042 Drake Tax Consultants Tax Services 28-Dec 47505.26

1043 Aqua Water Service October Water Service 15-Nov 8644.86

1044 Jancy Barbershop December rent 15-Dec 106000.00

1045 Classic Milktea House Inventory 31-Dec 12978.22

1046 Katherine Pastries Catering for office birthday party 15-Jan 12600.00

1047 Isaac Pharmacy Inventory 28-Dec 12801.10

1048 Lays Bookshop Inventory 1-Jan 20000.00

1049 Edna Veterinary Shop Inventory 23-Dec 23059.76

1050 Glazing Pork Steak House Inventory 29-Dec 102537.24

1051 Isaac Pharmacy Inventory 31-Dec 12801.10

1052 Basketball Supplies Inventory 2-Dec 4335.52

1053 Classic Milktea House Inventory 31-Dec 12978.22

1054 Aqua Water Service November Water Service 15-Dec 8644.86

1055 Drake Tax Consultants Tax Services 28-Jan 47505.26

Requirements:

a. Prepare the adjusting entry for check #1044 as of December 31, 2017.

b. The cost of goods sold for the year will have to be increased /reduced by what amount?

c. What is the total adjustment to Voucher/Accounts Payable to take up the unrecorded liabilities as of December 31, 2017?