Edwards has decided to use monetary-unit sampling in the audit of an entitys accounts receivable balance. Few, if any, misstatements of account balance overstatements are expected. (8 points)

a. Calculate the sample size and the sampling interval Edwards should use for the following information:

Tolerable misstatement = $15,000

Expected misstatement = $6,000

Desired confidence level = 95%

Recorded amount of accounts receivable balance $300,000

b. Calculate the upper misstatement limit (UML) assuming that the following three misstatements were discovered in testing based on the MUS sample computed in part (a).

Misstatement #	Book Value	Audit Value
1	$400	$320
2	$500	$0
3	$3,000	$2,500

c. Document the auditors conclusion about the fairness of the accounts receivable balance based on your testing.