Given the Description you have to complete the following task:

Task #1) Inventory adjustments.

Task #2 Audit opinion on inventory.

#1 – Letter from the Controller

From: controller

To: Auditor

Date: January 11 year 5

Subject: Re: Returns

Auditor,

Please see my response to your question inline below. Also, it should be noted that on closer look, there is an issue with the physical counts of the 5mm widgets. The perpetual records are correct. This has been validated by your associate, Lily.

Lastly, it looks like the perpetual inventory listing includes 750 units of SKU 267-1 that have been consigned.

Thanks,

Controller

#2 – Email from the Auditor

From: Auditor

To: controller

Date: January 10, year 5

Subject: Returns

Hi,

Can you please tell me whether the items in the returns area have been included in the count?

Thanks,

Auditor

[Controller] Yes, the counts are correct and returns have been included in the counts. However, they would not yet have been processed in the perpetual inventory system.

#4 – Supplier Report: Widget-Wiz Co

SKU 267-3

On September 25, year 4, JBU acquired 100 units of SKU 267-3 with a unit price of $7.99. Subsequent to this acquisition, JBU sold a total of 25 units of 267-3 to third parties for $11.99, and utilized 70 units of the product in the manufacture of equipment being held for sale in warehouse B.

SKU 267-5

The company has not made a purchase of SKU 267-5 subsequent to February, year 3. In prior years, JBU had a regular customer for this product line but during year 3, this customer became insolvent.

SKU 267-1

In March, year 4, JBU purchased 5,000 units of SKU 267-1. Half of the units had been used in the manufacture of equipment that has subsequently been sold. A further 30% of the units were sold to third parties during year 4, and 5% of the units are in ending inventory. The remaining 15% of the units were provided to a customer on a consignment basis. As of December 31, year 4, all of the consigned goods were sold by the customer.

SKU 267-4

In December, year 3, the company acquired 10,000 units of SKU 267-4 at a price of $1.56 per unit. During year 4, the company sold 5,898 units of the product to third parties. The last sale was made in November, year 4, with shipment that same month.

#6 – Memo from Staff Accountant

To: JBU, Co. Audit File

From: Lily, Staff Auditor

Date: December 31, year 4

Subject: SKU 267-4 Widgets - 5mm

I met with the controller of JBU, Co. on December 31, year 4, to resolve discrepancies between the perpetual inventory listing for SKU 267-4 and the count sheets prepared during the inventory observation. I then visited the warehouse again with the controller to perform a recount of these items. I counted 4,102 units of SKU 267-4. I validated that the perpetual inventory listing for SKU 267-4 was correct and the initial count reflected on the inventory count sheet was incorrect.

Transcribed Image Text:

#3 - Inventory Count Sheets 267-4 490-2 267-3 561-3 290-1 Inventory Count Sheet [Warehouse A] 4,098 541 7,975 121 #3 - Inventory Count Sheets 267-4 490-2 267-3 561-3 290-1 Inventory Count Sheet [Warehouse A] 4,098 541 7,975 121

Answer rating: 100% (QA)

Task 1 Inventory adjustments Discrepancies SKU 2674 Perpetual inventory listing shows 4102 units but ... View the full answer