8.58 Search for Unrecorded Liabilities. The list of vouchers payable for Potter's Magic Shoppe at December 31 is as follows: Vondr Invoice Date ‘Amount Hagrd Cleaning Services ans. $4,322.43 Hormione’s Hats 1202 2,167.96 Lockhart Magic Books 12131 6,489.11 aly Financial Constants 1228 23,752.63 ‘MeGonagell Veterinary Supplies 12123 4,590.60 Mocning Myte’s Mystical Capes 104 11,529.88 Nicholas Fancy Heedwear 12729 51,268.62 Sape’s Snakes 12/28 36,152.45 Weesley's Wands 12728 6.40055 Hogwarts Rents 125 53,000.00 Total vouchers payable $199,674.03 (Checks writen inthe following January ae: Check Number [Payee Deserintion Invoice dete | Amount 082 atay Franc Constants reson servers raze | $23,752.68 1883 Herd Ceaning Serves October monty cleaning 15 932243 1048 Hogwarts Rentals January rent rats | 5300000 1045 Lack Magi Books Imveriory 1231 489.11 1846 Dadiey Pasties Cetrng fr ofceCristnas party 15 30000 7887 Woasly'sWands Inverter 1228 540055 1888 own’ Enters “eater sn | 1000000 1048 McGonagall Veteinay Spies ventory 1223 459060 1650 Nicholas Fancy Headwear mentor, 279 | si26e62 1851 eases Wands Terie 151 540055 1882 Heroine’ Has Inverter 202 2:61.76 1883 act Magic Books Inverter 1231) 5932.89 1054 grid leaning Serco Noverber mest daring 1215 432248 1055 atioyFrancilConsutants Profesional serens 1ma__| 1388856 equled ‘a. Prepare an audit plan forthe audit of untecordedlabiliies for Potter's Mage Shoppe. », Prepare an adjusting journal entry to correct accounts payable, Potr’s maintains per petal inventory records, andthe inventory was counted and adjusted on December 31.9.57 Tracing the Inventory Count. You have been assigned to trace the results of the observation of Brightware China’s physical inventory count to its pricing and compilation. You note the following conditions. 1. The last inventory tag documented by Mark Hulse, the auditor who observed the inven- tory, was 1732, but you notice a number of items with count ticket numbers higher than 1732. You contact the client's controller, Marcia Vines, who tells you the client found a storage room full of a new product that Brightware had just produced and added it to the inventory. 2. The count tickets recorded by Hulse agree to the inventory list, but some of the other ‘count tickets you select are substantially different from it. Vines tells you these are inpat ‘errors and she will have them corrected. 3, Hulse deseribed several boxes of goods as being dusty and even broken. They are included in the inventory at cost. Vines’s explanation is that china never “goes bad” and the goods themselves were not broken. Required: 1a Prepare an audit plan for tracing the information from the inventory count to the compilation. bb. What might have caused the conditions you found? What effect might they have on the financial statements’) ©. What steps will you take to follow up on Vines’s explanations?