Engagement materiality = $150,000

Performance materiality = $375,000

For each of the following situations, note whether an exception/problem was noted, whether an adjusting journal entry(s) is needed, and what the adjusting journal entry(s) would be. After ALL of the situations have been dealt with, total ALL of the adjusting entries to A.P. and state whether A.P. as a whole will increase/decrease and if the A.P. balance is materially misstated (i.e. if it is above or below the materiality threshold):

1)

A vendor statement from JeepFuel shows that payments for fuel deliveries (each in the amount of $160,000) in November 2022, December 2022, and February 2023 are still outstanding. You noted that the amounts for the November and December deliveries were included in A.P subledger, but that the February amount was missing.

2)

During repairs and maintenance expense testing, you noted that a new building was purchased from a competitor and expensed immediately to cash on the books in 2022, though the invoice was paid on January 2nd, 2023. The cost of the building was $600,000, and it has an estimated useful life of 50 years.

3)

During the search for unrecorded liabilities, you noted that an invoice for jeep parts in the amount of $320,000 was booked to A.P at December 13th, 2022. However, during your later review of the accounts payable detail and support, you came across an email from the controller at the Company, stating that the jeep parts were on backorder and would not arrive to the facility for use until January 23rd, 2023.

4)

While reviewing the January 31, 2023 bank statement, you noted that the Company made a payment to Jeeps4Lyfe on January 18th, 2023, in the amount of $233,000 for jeeps that were received on December 28th, 2022. Upon inquiry of the controller and review of the A.P detail and invoice, you noted that this transaction was not included in the A.P balance as of December 31, 2022.

5)

During your review of the year-end payroll register, you noted that all employees at the Company received a bonus for their hard work in fiscal year 2022. This bonus amounted to $356,700 and was paid out on December 30, 2022. You noted that there was no accrual for this bonus as of December 31, 2022.