You are the auditor of Heavy Metal Manufacturing Company, a small manufacturer of specialty parts used in various manufacturing processes. You are performing a search for unrecorded liabilities.

Suppose you have the following information:

Also, you discuss the holiday party with Delectable Catering and learn that this party did take place on December 23, 2021, and was for all the employees and their families.

1. Do you see any problems? If so, what are these problems?
2. What, if any, are your concerns about unrecorded liabilities?
3. What should you do now? If an adjusting entry is to be proposed, show what that entry would be. Assume all amounts are material.
    

Vendor Jones Supply Metal Customwerks Sophisticated Catering Calumet Controls Business First Ace Fabricating Check # 8719 8720 8721 8722 8723 8724 8725 8726 Accounts Payable Listing as of December 31, 2021 Type of Vendor Invoice # Due Date Acquisition Inventory Inventory Party 241 Inventory 5409 Supplies Inventory 9974 R9121 R9122 R9123 R9124 R9125 R9126 R9127 R9128 01-11-2022 01-11-2022 65001 99831 Date 01-06-2022 01-07-2022 01-08-2022 Delectable Catering 01-11-2022 Calumet Controls Organized Office Business First Alumex Supply Steel Fixtures 01-15-2022 01-15-2022 Receiving Report # Date 7117306 Cash Disbursement for January 2022 Payee Purpose Jones Supply Inventory Metal Customworks Inventory 01-09-2022 01-10-2022 01-10-2022 01-14-2022 01-14-2022 02-22-2022 Receiving Reports Before and After December 31, 2021 Vendor Description Received 12-26-2021 Jones Supply 12-27-2021 Metal Customworks 12-27-2021 Calumet Controls 12-30-2021 Organized Office 12-30-2021 Ace Fabricating 12-31-2021 Business First 01-02-2022 Alumex Supply Steel Fixtures 01-03-2022 Party Inventory Supplies Supplies Inventory Inventory Amount Owed $70,000 90,000 17,500 8,300 2,400 84,200 $262,400 Amount $70,000 70,000 17,500 8,300 15,500 2,400 9,700 35,000 Inventory - 60 units part # B450 Inventory - 100 units part # B178 Inventory - 500 units part # C703 Supplies 500 boxes computer paper Inventory-70 units part # 398 Supplies - 100 printer cartridges Inventory - 250 units part # Z190 Inventory - 200 units part # 2347