Partly to address the existence and completeness assertions, auditors typically test purchase cutoff at the balance sheet date, thereby addressing whether purchase transactions are recorded in the proper accounting period. Your audit supervisor has asked that you perform a purchase cutoff test for the Ridgeview Corporation, a December 31, 1999, year end client. The supervisor suggests that you test all purchase transactions over $5,000 for the period December 25, 1999 through January 5, 2000. Audit working papers compiled during the December 31 physical inventory observation indicate that the last receiving report used on December 31 was No. 13402. The following data is available for eight purchase transactions:

*Indicates the purchase was included in December 31 payables.

**Indicates the purchase was not included in December 31 payables.

Required: 

For the purchase data above, indicate whether (and why) each purchase is treated properly or improperly in December 31 accounts payable. Prepare an adjusting journal entry for the purchases treated improperly.

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Receiving Report Number Amount Date Shipped Date Received 13398 $13,500 ** Dec. 26 Dec. 28 Shipping Terms FOB: Origin 13399 7,560* Dec. 27 Dec. 27 13400 24,000* Dec. 29 Dec. 29 FOB: Dest. FOB: Origin 13401 5,000* Dec. 31 Dec. 31 FOB: Origin 13402 15,980 * Dec. 29 Dec. 31 FOB: Dest. 13403 9,765* Dec. 30 Jan. 02 FOB: Dest. 13404 45,000 ** Jan. 01 Jan. 03 FOB: Dest. 13405 10,855** Dec. 31 Jan. 02 FOB: Origin