$2.$ Evan Kristopher, CPA intends to use monetary unit sampling. He has properly selected and audited a sample of $100$ accounts receivable from his client$$s population of $3,000$ accounts. He calculated a sampling interval of $$6,000$ and the tolerable misstatement for the account is $$30,000.$

Evan also recalls that $$basic precision$$ is equal to the appropriate reliability factor multiplied times the sampling interval. He wishes to accept a risk of incorrect acceptance of $10\%.$

He found that $97$ of the $100$ accounts in the sample were properly calculated. However, the following three errors existed:

Book Value Audited Value

$$75$ $$70$

$1,000750$

$9,3006,720$

Required:

a$.$ Calculate the projected misstatement.

b$.$ Calculate the basic precision.

c$.$ Calculate the incremental allowance.

d$.$ Calculate the upper limit on misstatement.

e$.$ What would the auditors$$ conclusion be for the population based on the analysis?