Meltdown Incorporated $($MI$)$ recycles plastic and then sells it to manufacturing companies to produce toys, household

items $($such as coffee makers$),$ and so on$.$ MI was founded in $1998$ by Samuel Abdesselam. Sam has maintained full

ownership of MI$,$ deciding not to take it public when so many other recycling companies were going public. While

Sam is the only shareholder, MI does have a substantial bank loan and the bank requires an annual audit of MI$$s

financial statements and MI follows ASPE. Sam has a background in operations, but is also very strong in accounting.

It is now early $2021$ and you are the controller for MI$,$ having been hired just days before the December $31,2020,$

year end. In October $2020,$ Sam decided to step away from the business and spend more time at his second home in

Florida. In order to ensure there was someone at the MI facility to oversee production and day$-$to$-$day operations, Sam

hired a chief operating officer, Fred Finklestein. Fred$$s background is sales and operations and he has limited knowledge of accounting. Fred tried to run the accounting side of MI when he was hired, but determined that it wasn$$t his

area of strength. He received Sam$$s permission to hire you to help him with accounting for some of the activities in

preparation for year end, and to help him understand the accounting function better.