PINNACLE MANUFACTURING

16-35 Part VII

Sunday, December 15, 2013 Cassie Rosado, Dyllan Holmes, Hanna Wong, Matthew Townley, Shemika Stinson, Traci Rood

Stinson, Traci Rood

CUSNAM FIBERCHEM TODD-MACHINERY RUFUS AUSTIN ANTIQUES WELBURN MANUFACTURING AMERICAN PRESS CLEAN-O-RAMA, CO. SAFETY ENVELOPE CO GOODMAN-RECHWELD SABLEX INC MACDONALD SVC CORPORATION MICRON POWER SYSTEMS FREEMAN FURNITURE - ATTN A/P SELECT WASHING SERVICE INC REMINGTON SUPPLY SANDLER'S INC SANDLERS,INC. HOLY FAMILY HOSPITAL TOMPKINS CORP RULAND TV SERVICE MISC. COD (TRADE) MOBIL OIL PROCESS & CONTROL EQUIP LAS FLORES DESIGNS INC NORRIS INDUSTRIES SANDLERS VILLAGE IND MOLD RITE CASTING CO METADYNE CORP GODWIN DRUG COMPANY A & M SANDLER INC UNIVERSITY OF CALIFORNIA PERGAMENT MASON R & B PRODUCTS BURTON MARTIN NATIONAL ELEVATOR & MACH CO BEACH & HOOVER REFINING AMERICAN BABY % USTC PLAZA LIGHTING BEARING DRIVES CO WOODSTOVE & FIREPLACE TECNI COS THE HABERDASHERY CO CABLE SYS % IND TRAF CONS ALDERS WHSE LEAN CORP MCCOYS INC SCANDEC USA INC THE SERVICE CENTER ZZZZ BANK ADJUSTMENTS WEBER COMPANY KOLMAR AUDIO G P CHAMBERS CO

Accounts Payable 793,049.89 531,073.93 400,046.08 388,836.07 340,767.94 317,668.63 223,950.34 191,373.01 153,853.85 147,943.95 136,071.37 130,493.51 125,344.16 123,411.24 120,075.63 118,052.09 117,916.83 112,532.07 99,745.77 95,901.28 93,210.48 89,080.78 88,644.92 88,314.64 88,038.42 86,660.95 85,432.51 84,331.05 81,348.54 80,624.95 80,482.46 80,092.46 78,682.54 76,921.40 76,408.79 75,432.73 75,160.96 73,017.24 72,982.39 72,678.14 71,869.16 71,288.95 69,381.70 67,985.23 67,936.32 65,942.94 64,956.54 64,471.21 64,466.17 64,450.67 64,125.44

2771442.55

THE DUTTON COMPANY HENDERSON PUMP CO FINISH METALS INC EDDIE VENTURA, INC. FIBEROPTICS UNIVERSITY OF MARYLAND JETCO INT'L INC MATERIAL FLOTATION IND MARC LAWRENCE CHRISTIAN BRIDGE BAKERY J C LICHT CO-GLENDALE HTS BOSTON SHOECASE CO ADVENT SIGN MFG. CO. HARRAH'S METALS, INC. PACKAGE FORWARD INC G & B MARINE INC % PMC LGSTCS QUAKER TRANSANALYSIS LONG BEACH LAWN SERVICE INNOVATIVE CONCEPTS INC EVERHART CO LIBERTY LIGHTING GOOD HOUSE HOME VIDEO INC AL. ALAMILLO FOCUS CAMERA INC AMERICAN QUALITY APPAREL, INC. TV SALES & SERVICE EMI AUTOMOTIVE GROUP BELLCO B&K MFG CO INC DESSERTS BY BEN WEAVER VERNON BEAR TASSEL CO COAST DIST SYS TOWER INTERNATIONAL VACUUM SERVICE DYNAMIC METAL PRODUCTS BELTON LAMP & SHADE OUTLET B & L CHEMICAL CO RECKNAGEL CO FREIGHT LINES CAL HANNAS INC CUMBERLAND STEEL THE VCR CLINIC CYTEC ASSOC FULLER TRAVEL MULTIPAK PACKAGING HERPIN'S NEON DESIGNS OPEN SYSTEMS INC BYRON USA SORENSON DIE CASTINGS INC ADVANCED COMPUTER ABNER HOMECARE

63,882.02 63,528.67 60,769.71 60,255.55 60,102.78 59,333.16 57,700.30 56,072.37 55,316.05 53,703.45 53,228.47 52,174.50 51,750.00 51,279.85 51,035.94 50,884.95 50,363.69 48,488.96 47,690.86 47,519.14 46,802.78 46,472.67 45,483.82 44,577.51 44,029.99 42,872.01 42,815.74 42,710.74 42,668.50 42,560.83 40,105.62 39,794.23 37,403.58 37,299.57 37,238.69 36,546.05 36,061.56 35,869.33 35,392.29 34,273.28 33,549.69 33,172.11 32,885.80 32,486.59 32,470.11 32,373.32 31,721.04 31,171.84 31,069.14 30,959.46 30,666.33 30,636.94

5212467

RED HERRING INC OTB TROY HILLS TRANSCONTINENTAL SALES CO. BRASS BOOK TRADING CO EASTERN PHARMACY CIRCLE INTL WOOD STOVE CO INC EXPAND SVCS NORTH CONTROL IND INC L & L TRUCKING SERVICE INC LIBERTY TREE, INC. D I T AUTOMOTIVE BOOMER KITCHEN & BATH CTR BECTON ELEC PROD % SCOTT AULT B & G INDUSTRIES ACCESSORY SVCS PETERSON PHARM PRTNR RANDOM CHOICE INC PAUL P. ELLISON PFS USA NCAA / VM MARKETING / PE BREAYER CORP MILTON MATTRESS & FUTON KARCH TECH SPLY LOTUS EQUIPMENT LTD NATURAL SERVICE INDUSTRY RETAIL INDUSTRIES TREND ACCOUNT STERILIZATION TECH SER INC GUARANTEED-TRANS OPER DEPT ELECTRICAL DISTRIBUTING, CARRIAGE'S JACK'S INC. INSUL MEDI CRAFT BINDER ALL TO PHYSICIAN SALES & SVC INC TONY - COLL ONLY SAMPSON MINING A A HILL CORP HOPEWELL DECORATIVE PKG DIAMOND METAL STAMPING INC PRESIDENT CAMERA INC HAWKES INDUSTRIAL WEAR LAB CRAFT ASSOC PHILIP LAPINSKI INTL HUNT'S AV SYSTEMS, INC. GERODON INC CONTINENTAL EXP INC PEI CORP CHELMSFORD FRUIT CTR SHELBY TILE MEMORIAL MICROWAVE CO

30,541.69 29,402.17 29,184.16 28,923.29 28,860.53 28,303.70 28,199.60 28,086.15 28,020.43 27,804.76 27,561.14 27,166.23 27,107.92 26,991.77 26,608.10 26,588.26 26,355.60 26,304.97 26,209.72 26,096.87 25,959.58 25,863.57 25,816.28 25,539.38 25,171.10 25,000.59 24,818.66 24,652.60 24,290.38 23,775.62 23,460.93 23,356.85 23,119.72 22,973.03 22,617.02 22,550.59 22,424.47 22,282.08 22,244.08 22,108.68 21,854.36 21,826.11 21,763.06 21,577.00 20,723.20 20,657.59 20,567.22 20,432.50 20,424.10 20,232.42 20,223.46 20,037.35

ASSISTED CARE PARTNERS INC ENGELHARTS NATIONAL BAKERY CO GEORGE RODRIGUEZ THE CARWASH**LEGAL****** GOOD HOUSE VIDEO NAUTICAL MAINE INC KARL'S TV BRAGG SUSPENSION PARTS PROGRESSIVE HARDWARE CO SUMITOMO DIAMOND CORP COMMONWEALTH DIST. TRAVIS WORKS THOMAS POLLARD CO UNIVERSITY C.C.,LC*LEGAL***** WORLD DRUG COMPANY XANTHAL FUND MILL STREET RESTAURANT SEMATECH AUDIO CO CITA CORP DOWNS CHENARD INC NIMBUS ASSOCIATES RAINBOW INC GENETICS INSTITUTE FACTORY LTG LOFT INC MIDWEST SALES MAC FARMS MAXITE USA MERRILL INDS WEBER (BT) CO NYC-HEALTH & HOSPITALS CORP ALBERS APPLIANCE INC. INTERNATIONAL MAIL SYS TREASURE ADVERTISING MUNI HLTH ORG INS CO SEVILLE FASHIONS, INC. INTERVAL CORP ALLOID CO INC GLOBE BUSINESS SUPPLY COOPER ACCESSORIES & SUPPLY ARTISAN GLASS INC DELTA INSTALLATION TILES OF AMERICA MARVIN CHOC CO MILTON JEWELERS AIR PRODS & CHEMS-ACCTS PAYBL MYSTIC CONCEPTS MR. GLASS INC WORLD PHOTONICS PRESBYTERIAN HOSPITAL MLCOM OFFICE EQUIP AKZO TEMP

20,019.61 19,771.17 19,307.45 19,241.63 19,238.47 19,145.21 19,018.04 19,002.42 18,734.70 18,700.16 18,611.24 18,559.24 18,371.48 18,202.56 18,105.20 17,852.36 17,472.65 17,391.85 17,320.18 17,250.33 17,127.55 17,101.93 17,022.63 16,991.68 16,593.97 16,513.90 16,207.67 15,961.05 15,899.50 15,884.80 15,512.03 15,368.37 15,331.02 15,300.68 15,187.98 15,124.12 15,068.14 15,000.54 14,965.31 14,918.98 14,916.03 14,786.65 14,362.58 14,175.20 14,092.80 14,053.45 14,010.30 13,618.16 13,563.97 13,560.56 13,513.14 13,423.55

INNOVATIVE PAPER THE T.V. SHOP BLAKE WHITNEY MI-CAR INC. TYCO PIPE & STEEL PRECISION PRODUCTS THE ANNEX SHOPPE, INC. WALL-BOARD PRODUCTS HAMILTON CHIMNEY INC SLANTCO CORP HOFSTRA GLASS MFG LIPPER CO GORMAN ELEC AMERICAN LIGHT CORP COURIER NETWORK INC GRAPHIC SYSTEMS INC DAVID F. PAYNE CESAR ALVAREZ SERVICE WORLD WILLIAMS TV & APPL CO INC ARTNAC CORP MATTHEY DESIGNS INC BRUNNER INC SOUTH RADIO & TV SVC WHITE FUTON ASSOC GROWTH NEW ARMY NAVY CORP ATS INC ALPINE ELECTRONIC SERVICE ROSE-HAMMER & ASSOCS COOKIE WORKS INC CHEMTREX EASTERN PACKAGING LTD FINGERS CORP SMALL BOAT EXCHANGE HEARTLAND RECRUITING CO COLOR PRESS CO-ACCT PAYABLE UTILITY MFG CO INC C L COMMUNICATIONS HARRIS FORD MOTORSPORT STERLING TENTS PHYTEK GLOBAL INC LOUISIANA DISC WHSE CO TELEVISION VIDEO AUDIO SA SIDNEY CASTELLI MD LOGAN TANNING INC MURNELL SEAT CO CAMERA MUNDI INC WOODSIDE WOOD FLOORS AMERICAN INTL SVC HARLEY TRANSFER CORP AIR ENERGY INC

13,422.51 13,413.16 13,103.00 13,099.35 13,043.28 12,905.93 12,890.89 12,850.80 12,824.29 12,739.86 12,424.50 12,416.77 12,309.77 12,239.62 12,185.52 11,969.72 11,911.02 11,870.46 11,849.51 11,843.91 11,642.70 11,612.82 11,409.56 11,362.52 10,794.10 10,682.61 10,664.58 10,656.68 10,491.44 10,480.19 10,477.16 10,458.53 10,359.37 10,260.42 10,231.45 10,227.43 10,212.15 10,150.49 10,149.97 10,104.16 10,050.23 10,031.98 9,974.81 9,957.10 9,910.36 9,865.49 9,827.10 9,605.26 9,333.42 9,221.17 9,218.70 9,204.96

VANDYKE FOOD MACHINES LEE JAY RESTAURANT TOM'S TV SERVICE SWEETHEART CORP G.P. ELECTRONIC SERVICES J-Z AUTO PARTS INC LUCY INTERNATIONAL, INC. INK TECH INC AFFILIATED MATERIAL INC GUARDIAN COMP CO STAR COFFEE B & B MFG CORP MEYER-ECCO INC. KEYSTONE-TURNER CORP WAKEFIELD ASSOC ALBERT SANDLER LEWIS SYLVESTER MD EXCAVATOR TECH OFFICE SUPPLY INTERNATIONAL BRUSH COMPUTREX STATE OF MARYLAND ART ACOUSTICS M PENNY CO - DIST SVCS WILSON BLOUIN OMASCOT, INC. VALUE APPAREL TAYLOR ATHLETIC HORSESHOES STAR TORCH ARV LOGISTICS/FREIGHT PAYMENT FAYS DRUG COMPANY CLARK MILLS PREMIER WHIRLPOOL BATH B.T. STYLES, INC. OLDFIELD'S PAULINE PRODUCTS INC WEINMACHERS TOM THOMPSON CYCLES HAMBLETON & FOOTE PRINCETON WIRE INC NATIONAL TAYLOR CORP US INDIAN HEALTH SERVICE APEX PAPER CO WORLD VIDEO CORP 2ND TOPPERS INC SOLANO'S TV SERVICE PARKIN MEDO INC GUARANTEED-TRNS OPER DPT HARRIS T.V. AND ELECTRONIC PEALE OFFICE FURNITURE CAMDEN WORKS WEISS DISTRIBUTORS AVON ELECTRIC

9,203.06 9,070.00 9,055.46 8,854.60 8,763.52 8,745.12 8,707.72 8,658.79 8,608.29 8,573.80 8,481.62 8,272.92 8,200.60 8,190.16 8,173.18 7,943.95 7,820.35 7,762.95 7,759.76 7,697.87 7,639.07 7,529.68 7,520.29 7,500.77 7,443.48 7,350.79 7,185.67 7,136.74 7,052.85 7,007.39 6,937.74 6,860.83 6,854.08 6,849.33 6,833.76 6,804.32 6,725.25 6,656.11 6,607.53 6,590.95 6,470.27 6,462.08 6,441.89 6,432.03 6,419.29 6,285.20 6,201.65 6,065.17 6,019.28 5,951.46 5,942.98 5,823.26

FL WRIGHT CO HACKER ASSOC STUDIO BROTHERS CIRCLE INTL MICRO ETCH CORP JOE'S TV CARPENTER CO LAMPLIGHTERS ARMOR PROD MOOG PAPER BOXES PIONEER MFG DENPHAL CUSTOM FURN USP STERILIZATION INC DARPIN INTL GROUP COLUMBIA CLORINE CO., INC. B B R, INC. DBA KELLY'S PETERSON HOTEL CORP REDS CUSTOM SOUND INC BEACON WIRING CO M N D CORP VAN BREEDEN CO J POMERANTZ SERT CO TENATRONICS CORP EXTRA-FAST CO FIBER PRODUCTS INC MICRO TECH CORP KOLLMORGEN INSTR CO WALTON STORES INC ELLEN R WASNER MD FOAM PRODUCTS ALBERT B FITZGERALD INC JOHNSTONE GLASS MIDCO HARNESS SCHULTZ & SON INC B & E RAILROAD SUPER MARKET CORP SILIPOS CAMERA INC PERFECT TIMES CONSOLIDATED ELECT Y&R ESSEX CORP GLOBAL COMM CORP - STE 207 PETE MARTIN SCHOONMAKER MICA CO MOTOR CARGO BUECHLE & KUEHNE SCANDIA SCIENTIFIC CO ROHM AND NPC COVE HARDWARE GRANDVIEW CORPORATION CUSTOM CLASSICS

5,703.23 5,650.97 5,617.67 5,442.67 5,432.70 5,423.61 5,420.90 5,420.30 5,407.75 5,277.27 5,253.74 5,211.41 5,193.23 5,150.93 5,069.89 5,027.52 4,876.79 4,861.00 4,770.45 4,759.67 4,758.00 4,757.52 4,719.67 4,621.90 4,586.09 4,557.76 4,556.73 4,528.83 4,453.26 4,432.19 4,380.70 4,378.61 4,366.64 4,360.85 4,355.89 4,263.89 4,256.22 4,229.14 4,212.19 4,203.92 4,173.59 4,171.83 4,095.56 4,082.72 4,046.13 4,023.11 4,011.46 3,997.68 3,951.18 3,949.96 3,891.54 3,859.39

MC GRAW & GUNTHER J C LICHT CO-PRAIRIE #2 FIBERWORK INC CANCER SPECIALIST INC INTL PLAY THEMES POLAR AIR CORP ELTON METAL POWDERS INNOV MOTORS AMERICA TACO GROUP RAM DATA SERVICE CTR IRON HORSE CUSTOM ELECTRONICS ALBERTSON NETWORK SAVE THE CHILDREN FED. F DICK CORP CLOTHING SALES CRP FONTAINE'S RADIO & TV SER PURE SYSTEMS WYETH LABELS DEBBIE CELESTINO MCMASTER CARTER SUPPLY TEMPO APPL. SERVICE INC R N BALDWIN & ASSOC ULSTER LUMBER SUPPLY TRASK CASTERS INC BRUCE G ATCHESON MD RUSSELL TOOL & MACH CO INC RUNNER TRANSPORT IT TRANS DIST SVC F.I.R.S.T., INC. CHECKPOINT FLOWERS INC % STI MACARTHUR DIST CO DOUBLETREE ARS MFG INC NELAS STORES, INC ROGER RADIO & TELEVISION INTERPLANT INC AUTOMATIC SWITCH CO BEELINE PRODUCTS INC COMMUNICATIONS DESIGN CO LAZARUS ENT KISS ME CORP TESS CANDY CO INC PLAINFIELD SUPPLY ARGON INC RALSTON NELSON INC WORLD CASS INFO SULLIVAN PLASTICS % CT V.J.'S TV & APPLIANCE ABUNDANCE INC CERTAIN SEED CORP CONN SCIENTIFIC CORP

3,836.48 3,823.54 3,807.72 3,786.46 3,784.50 3,741.35 3,701.53 3,684.96 3,670.32 3,600.86 3,598.07 3,580.63 3,540.02 3,524.62 3,523.15 3,500.44 3,460.48 3,423.11 3,399.68 3,337.62 3,296.49 3,264.46 3,254.47 3,139.10 3,099.47 3,098.68 3,082.41 3,067.10 3,058.66 3,011.38 2,986.58 2,937.76 2,890.62 2,847.85 2,796.56 2,780.82 2,753.68 2,676.69 2,646.13 2,636.19 2,600.83 2,599.36 2,574.69 2,571.88 2,552.43 2,552.34 2,549.47 2,519.14 2,443.98 2,434.68 2,377.96 2,360.81

STERNBERG RADIATORS INC SALEM HARDWEAR US PHS INDIAN HOSPITAL MASTER RELIANCE NATIONAL TV & APPLIANCE THRUWAY CONNECTORS LAMBERT & HIGGINS POCONO PETERTON MILLS DEPARTMENT STORE ROYALTONE COLE FILM ROSEN COMERCIAL IMPORT USTC VALVE COUPLING PLASMA CANADA PROTECTIVE COATING CORP MECKLENBURG FLORIST INTERNATIONAL MICROENG RAYMOND M KELLER BUSINESS MACHINE PROFESSIONAL WEBSTER FOOD STORES DESIGN LABEL MFG INC NEEDHAM FURNITURE RUBBER SUPPLY CO MACARTHUR DIST CO UNIVERSAL INSTRUMENTS INC MAIN PAPER & PACKAGING IVERS PRINTING & BUSINESS FMS NORTON CO AIRTEK PRODS TABER ENGINE CONNECTION PERFORMANCE MFG LUIS CALDERON EMPIRE WEAVING KIMSCO FASHION DESIGN CO PAUL K CALLOWS CO NORTHEAST MEDICAL SUPPLY SPORT DODGE HARRY SANDOW CO INC FRIGIDCO QUALITY MARKETS LEHANNS OF AMERICA OVERLAND TRADE TAYLOR ALUMINUM TRADE CHEMICAL CORP RAND PARK EMPLOYEE CHARGE SALES "A" SAVTEC INC BATES HAROLD ELLIS CO BANK BROS GBI ELECTRONICS WARWICK SERVICES

2,292.42 2,290.50 2,276.09 2,275.10 2,263.37 2,255.32 2,253.61 2,217.74 2,213.81 2,213.09 2,211.74 2,142.20 2,097.42 2,068.88 2,066.92 2,043.70 2,038.47 2,027.97 1,989.41 1,984.19 1,978.68 1,972.14 1,930.06 1,908.80 1,905.31 1,893.62 1,827.59 1,820.74 1,816.26 1,774.14 1,766.72 1,757.86 1,751.75 1,709.10 1,694.63 1,645.06 1,640.42 1,626.43 1,624.54 1,607.88 1,587.94 1,583.79 1,578.32 1,527.68 1,520.28 1,503.29 1,498.70 1,485.27 1,477.26 1,474.56 1,451.21 1,444.11

VIDEO & SOUND CENTER RETAIL CLOTHIERS INC WESTERN ONCOLOGY MED GROUP PEAREY CORP DERBY RACE CARS POLAR FOODS THE DISTRIBUTORS LTD. PLASTIC STORAGE SYSTEMS INC LORD CORP HERLIN BEVERAGE CO QUALITY WHSE SHOE FACTORY OUTLET TOM BERNARDI INC SOUND CITY INC BRIDGE TOOL & MFG WILD BLUEBERRY CO HAMPTON WHSE SALIDA, INC PEACHTREE & HALL R & R HLTHCARE RES INC-CPO SWIFT TRANSPORTATION & LOGISTI MAITLIN BIOCHEMICAL HENDERSON PUMP CO RGB PUBLICITY ACCOUNT B & B CLOTHING MFG. CO., INC. DIOR INTERNATIONAL GLEASON CORP-ATTN:VERSHARNN TRIMOTOR INC MASON AUTOMATIC MACHINERY HANNAFORD SULLIVAN CWP INDUSTRIES INC EVERHART CO ULTIMATE RESEARCH INC RIVER BUILDING SUPPLY UNION SAT, INC. MERRITT FROSST CANADA INC HILL VIDEO CENTER WIDMAN DRILL CO A TO Z DELTRON INC PHYSICIAN SALES & SVC INC ELIZABETH FALLS PUERTO RICO HOSP SPLY WORD PROC SAMUEL PLUMBING & HTG DES CHAMPS WHITE RALEIGH USA BICYCLE % NTA INC SHAWMUT HILLS SALTON CREATIONS MONSEY PRODUCTS CO MARCOT DEVELOPMENT MR. ALAN'S STYLES.

1,433.61 1,381.01 1,380.39 1,379.60 1,371.85 1,329.94 1,313.88 1,274.83 1,223.43 1,189.95 1,181.12 1,180.94 1,164.93 1,132.43 1,120.50 1,110.49 1,096.44 1,094.12 1,056.13 1,053.17 1,045.01 1,039.73 1,016.01 969.13 858.19 841.51 820.25 796.92 779.92 769.01 750.70 706.39 678.71 668.54 654.36 641.73 627.69 625.60 606.34 605.19 601.21 404.29 389.42 382.27 365.98 339.08 255.31 254.45 221.34 216.80 163.45 150.72

4985776.60

12,969,686.36

12969686.36

Figure 16-8

Pinnacle Manufacturing Sample of Accounts Payable Selected for Confirmation--December 31, 2011 High-Volume Items (>$250,000) 1. AMERICAN PRESS 2. CLEAN-O-RAMA, CO. 3. FIBERCHEM 4. RUFUS AUSTIN ANTIQUES 5. TODD-MACHINERY 6. WELBURN MANUFACTURING Large Balance Items ($50,001 - $250,000) 1. A & M SANDLER INC 2. AMERICAN BABY % USTC 3. BEACH & HOOVER REFINING 4. BEARING DRIVES CO 5. BURTON MARTIN 6. CABLE SYS % IND TRAF CONS 7. EDDIE VENTURA, INC. 8. FIBEROPTICS 9. FINISH METALS INC 10. FREEMAN FURNITURE - ATTN A/P 11. G P CHAMBERS CO 12. GODWIN DRUG COMPANY 13. HOLY FAMILY HOSPITAL 14. LAS FLORES DESIGNS INC 15. LEAN CORP 16. MACDONALD SVC CORPORATION 17. MCCOYS INC 18. METADYNE CORP 19. MICRON POWER SYSTEMS 20. MOBIL OIL 21. NATIONAL ELEVATOR & MACH CO 22. NORRIS INDUSTRIES 23. R & B PRODUCTS 24. REMINGTON SUPPLY 25. SAFETY ENVELOPE CO 26. SCANDEC USA INC 27. THE DUTTON COMPANY 28. THE HABERDASHERY CO 29. UNIVERSITY OF CALIFORNIA 30. ZZZZ BANK ADJUSTMENTS Items $50,000 and less 1. ADVENT SIGN MFG. CO. 2. B&K MFG CO INC 3. BELLCO 4. BOSTON SHOECASE CO 5. DYNAMIC METAL PRODUCTS 6. EVERHART CO 7. FULLER TRAVEL 8. GOOD HOUSE HOME VIDEO INC 9. HARRAH'S METALS, INC. 10. J C LICHT CO-GLENDALE HTS 11. LIBERTY LIGHTING 12. LONG BEACH LAWN SERVICE 13. PREMIER WHIRLPOOL BATH 14. QUAKER TRANSANALYSIS 15. TOWER INTERNATIONAL TOTAL TESTED

340,767.94 317,668.63 793,049.89 400,046.08 531,073.93 388,836.07

2,771,442.54

81,348.54 75,432.73 76,408.79 73,017.24 78,682.54 71,288.95 60,255.55 60,102.78 60,769.71 130,493.51 64,125.44 84,331.05 117,916.83 88,644.92 67,985.23 147,943.95 67,936.32 85,432.51 136,071.37 93,210.48 76,921.40 88,314.64 80,092.46 123,411.24 223,950.34 65,942.94 63,882.02 71,869.16 80,624.95 64,471.21

2,660,878.80

51,750.00 42,668.50 42,710.74 52,174.50 36,546.05 47,519.14 32,470.11 46,472.67 51,279.85 53,228.47 46,802.78 48,488.96 6,550.33 50,363.69 37,299.57

$ $

646,325.34 6,078,646.68

FIGURE 16-9

Replies to Requests for Information

STATEMENT FROM FIBERCHEM Pinnacle Manufacturing Detroit, MI Amounts due as of December 31, 2011 Invoice No. 8312 8469 8819 9002 Date 11/22/2011 12/02/2011 12/18/2011 12/30/2011 Amount 300,000.00 178,000.00 315,049.89 32,500.00 (2) Balance Due 300,000.00 478,000.00 793,049.89 (1) 825,549.89

$ $ $ $

$ $ $ $

Auditor's notes: (1) Agrees with accounts payable listing. (2) Goods shipped FOB Fiberchem's plant on December 31, 2011, arrived at Pinnacle Manufacturing on January 4, 2012.

STATEMENT FROM MOBIL OIL Pinnacle Manufacturing Detroit, MI Amounts due as of December 31, 2011 Invoice No. DX14777 DX16908 Date 12/23/2011 12/29/2011 Amount Balance Due $ 93,210.48 $ 93,210.48 (1) $ 37,812.00 (2) $ 131,022.48

Auditor's notes: (1) Agrees with accounts payable listing. (2) Goods shipped FOB Pinnacle Manufacturing December 29, 2011; arrived at Pinnacle Manufacturing on January 3, 2012 STATEMENT FROM NORRIS INDUSTRIES Pinnacle Manufacturing Detroit, MI Amounts due as of December 31, 2011 Invoice No. 14896 15111 Date 12/27/2011 12/28/2011 Amount Balance Due $ 88,314.64 $ 88,314.64 (1) $ 117,296.00 (2) $ 205,610.64

Auditor's notes: (1) Agrees with accounts payable listing. (2) Goods received December 30, 2011, recorded on January 2, 2012.

STATEMENT FROM REMINGTON SUPPLY Pinnacle Manufacturing Detroit, MI Amounts due as of December 31, 2011 Invoice No. 141702 142619 142811 143600 144927 Date 11/11/2011 11/19/2011 12/04/2011 12/21/2011 12/29/2011 (2) Amount 23,067.00 12,000.00 7,100.00 27,715.24 53,529.00 Balance Due 23,067.00 35,067.00 42,167.00 69,882.24 123,411.24 (1)

$ $ $ $ $

$ $ $ $ $

Auditor's notes: (1) Agrees with accounts payable listing. (2) Goods shipped FOB Pinnacle Manufacturing on December 29, 2011, arrived at Pinnacle Manufacturing on January 4, 2012.

STATEMENT FROM ADVENT SIGN MFG. CO. Pinnacle Manufacturing Detroit, MI Amounts due as of December 31, 2011 First progress billing per contract Second progress billing per contract Total due $ $ $ 51,750.00 (1) 7,500.00 (2) 59,250.00

Auditor's notes: (1) Agrees with accounts payable listing. (2) Progress payment due as of December 31, 2011, per contract for construction of new custom electric sign. Sign installation completed on January 15, 2012.

STATEMENT FROM FULLER TRAVEL Pinnacle Manufacturing Detroit, MI Amounts due as of December 31, 2011 Invoice No. 84360110 84360181 84360222 84360291 Date 12/04/2011 12/12/2011 12/21/2011 12/26/2011 Amount $ 9,411.63 $ 9,411.63 $ 7,100.00 $ 13,646.85 Balance Due 9,411.63 18,823.26 25,923.26 39,570.11

(2) (2) (1) (2)

$ $ $ $

Auditor's notes: (1) Paid by Pinnacle Manufacturing on December 28, 2011. Payment in transit at year-end. (2) The total of these items of $32,470.11 agrees with accounts payable listing.

A. Relationships, Ratios and Trends

Relationships
Comparing the current list of Accounts Payable to last year's list of Accounts Payable, could assist in finding any unusual balance changes in particular vendors. Finding any major balances changes from one year to the next, could be an indication for the auditor to request an explanation for the major change.

Ratios
Accounts Payable Turnover : Total Purchases/(Beginning A/P+Ending A/P)/2 then 365/ans 2009-2010 - 29.21 days 2010-2011 - 35.29 days These ratios indicate that Pinnancle has increased the amount of time it is taking to pay their vendors. Investigate the reasoning behind increasing the payments to nearly one week longer. This ratio would seem more reasonable if the inventory ratio was actually showing that inventory was being used quicker. Instead, the ratio is actually showing risk of obselescence decreasing from a turnover of 4.32 times per year in 2009-2010 to 3.78 times per year in 2010-2011.

Trends
When looking at the percent of change for years 2009-2010 and 2010-2011, we see that accounts payable increased from 24.71% to 37.09% respectively. This increase seemed to be a result of the large increase in inventory, which increased from 1.05% to 26.23%. Looking at the monthly detail of purchases may give some indiciation of any trend for the increase. Another area to look at is the charges to other expenses that could end up on accounts payable. Two accounts that could be investigated would be legal services and repairs and maintenance. Verify if either of these expenses are associated with any vendors on the accounts payable listing to test for reasonableness.

B. Audit Program for Accounts Payable

1. Recalculate the AP Population file and compare the total to the balance of the accounts payable account on the general ledg

2. Send 25 Vendor Confirmations off the AP Poplulation file to verify the detail and balance with what the vendor's balance is sh 3. Match the responses with the balances shown on the AP Population. 4. For the non-responses, verify the invoices shown on the aging detail with the actual invoices to verify correct data. 5. Inquire with management and review the AP Population for any related party transactions. 6. Select the last 25 transactions of the current year and the first 25 transactions of the subsequent year and trace each to the related documentation.

ount on the general ledger.

he vendor's balance is showing.

y correct data.

ar and trace each

C. Affect on audit procedures

1. Assessed control risk is high 2. Inherent risk is high 3. High potential for misstatement

With higher risks in all areas, any sample sizes would be increased to check the potential of a lack of controls or potential misstatements. Vendor confirmations would increase to verify balances shown on the AP Population are correct. For the cutoff testing, an increase from 25 transactions to 50 transactions would be justified.

FIGURE 16-10

Pinnacle Manufacturing Analysis of Trade Accounts Payable--December 31, 2011

Vendor

Balance per Books

Amount Confirmed by Vendor

Difference: Books Over (Under) Amount Confirmed

Timing Difference: No Misstatement

Misstatement in Accounts Payable o/s (u/s)

Accounts in stratum > $250,000)

Fiberchem Balances confirmed without misstatements Total for Key Accounts > $250,000

793,049.89

825,549.89

$ (32,500.00)

(32,500.00)

1,978,392.65

$ 1,978,392.65

$ 2,771,442.54 $ 2,803,942.54 Accounts in stratum $50,001 - $250,000

$ (32,500.00) $

(32,500.00)

Mobil

$93,210.00

$131,022.00

($37,812.00)

($37,812.00)

Norris Remington Advent Balances confirmed without misstatements Total for Key Accounts $50,001$250,000

$88,315.00 $123,411.00 $51,750.00

$205,611.00 $123,411.00 $59,250.00

($117,296.00)

($117,296.00) $53,529.00

($7,500.00)

($7,500.00)

$2,304,192.80

$ 2,141,584.80

$2,660,878.80

$2,660,878.80

($162,608.00)

($37,812.00)

($71,267.00)

Accounts in stratum less than or equal to $50,000 Fuller Balances confirmed without misstatements Total for Key Accounts <$50,000 $32,470.00 $39,570.00 ($7,100.00) ($7,100.00)

613,855.34

606,755.34

$646,325.34

$646,325.34

($7,100.00)

($7,100.00)

$0.00

yable--December 31, 2011 Misstatement in Related Accounts Other Income Balance Sheet Statement Misstatement o/s Misstatement o/s (u/s) (u/s) Brief Explanation

(32,500.00)

F.O.B. Origin error Dr. Inv. Cr. A/P

(32,500.00) $

Timing difference shipment was in transit Invoice not recorded on A/P (Purchases $117,296.00 and A/P) Pinnacle Recorded FOB Shipment before ($53,529.00) Received (Purchases

($7,500.00)

DR Fixed Asset CR A/P

($7,500.00)

$63,767.00 Timing difference payment was in transit

$0.00

$0.00

E. Estimate of m/s in the income statement

Misstatements in sample Stratum >$250,000 Dollars sampled Stratum >$250,000 Dollars in Population Stratum >$250,000 Income Statement m/s - Point Estimate Estimate of Sampling Error Total Estimates Misstatements in sample Stratum $50,000-$250,000 Dollars Sampled Stratum $50,000-$250,000 Dollars in Population Stratum $50,000-$250,000 Income Statement m/s - Point Estimate Estimate of Sampling Error Total Estimates Misstatements in sample Stratum <$50,000 Dollars Sampled Stratum <$50,000 Dollars in Population Stratum <$50,000 Income Statement m/s - Point Estimate Estimate of Sampling Error Total Estimates $0

$2,771,443

$2,771,443

$0 $160,000 $160,000

$63,767

$2,660,879

$5,212,457

$124,915 $100,000 $224,915

$0

$646,325

$4,985,777

$0 $39,000 $39,000

F. Estimate of m/s in accounts payable

Misstatements in sample Stratum > $250,000 Dollars Sampled Stratum > $250,000 $32,500

$2,771,443

Dollars in Population Stratum >$250,000 Accounts Payable m/s - Point Estimate Estimate of Sampling Error Total Estimates Misstatements in sample Stratum $50,001-$250,000 Dollars Sampled Stratum $50,001-$250,000 Dollars in Population Stratum $50,001-$250,000 Accounts Payable m/s - Point Estimate Estimate of Sampling Error Total Estimates Misstatements in sample Stratum <$50,000 Dollars Samples Stratum <$50,000 Dollars in Population Stratum <$50,000 Accounts Payable m/s - Point Estimate Estimate of Sampling Error Total Estimates

$2,771,443

$32,500 $160,000 $192,500

$71,267

$2,660,879

$5,212,467

$139,607 $160,000 $299,607

$0

$646,325

$4,985,777

$0 $39,000 $39,000

G. Conclusion

Overall, the audit did not show any significant errors for Pinnancle. While there were errors found in sampling, they fell below our tolerable misstatement of $250,000 in regards to the income statement. Management should consider establishing procedures for dealing with year end cutoff shipments. This seems to be an area of concern. While the misstatements did not have a material affect on the income statement, the audit procedures may expand the sampling for this area to check for additional misstatements.

of concern. may expand the sampling