94-13 Edwunds has decided to use monetary unit sampling (MUS) in the audit of a client's accounts receivable bulance. Few. ir any mistatements of the account balance are expected Edwards plans to use the following MUS table Risk of Incorrect Aceptance Number of Overstatement Mixstatements 1% 5% 10x IS 20% 0 461 100 231 1.90 1.61 1 6.64 4.75 39 1.00 11 8 41 6.10 3.13 4.08 10.05 17.76 669 6.00 352 1161 4 9.16 800 7.27 6.13 a Identity the advantages of wing MUS wwer classical variables sumpling Calculate the sampling interval and the sample size Edwards should use given the following information: Tolerable misstatement $ 15,000 Risk of incorrect acceptance 5% Estimated misstatement $ 0 Recorded amount of accounts receivable $300,000 Note: Requirements (c) through () are not related to requirements (a) and (b) c. Assuming a sampling interval of $5,000, calculate the total projected misstatement if the following three errors were discovered in MUS: Misstatement Book Value Audited Value 1 $ 400 S 320 2 500 0 5 6,000 2.500 MO e Assuming a sampling interval of $5.000, calculate the total projected misstatement if the following three errors were discovered in MUS Misstatement Book Value Andited Value 1 $ 400 $ 320 2 500 0 5 6,000 2.500 d. Calculate basic precision and incremental allowance, e Calculate the upper limit on misstatements 4. Will you accept or reject the account as materially correct? Explain. This problem includes additional parts that require the use of severalized audit sofhare. See the Connect Instructor Library or Connect's Additional Student Resources for more information. (AICPA, adapted)