Question 3 (34 marks) You are engaged in the audit of Mutterworths (Pty) Lid, a wholesaler of books, and have been placed in charge of the audit of accounts receivable. The company has a 30 June financial year-end and an audit deadline of 15 July 2021. As a result of the audit deadline, you decided to circularise debtors at 30 April 2021 and to perform roll forward tests for the months of May and June. The debtors' master file reflects that the company has approximately 375 debtors ranging from very large retail outlets to small specialist bookshops. Your firm uses generalised audit software which has a very effective circularisation application. Your initial analysis of the debtors' master file at 30 April revealed the following. Total amount owed to Mutterworths (Pty) Ltd R4 738 294 Number of new accounts opened during the current financial year 47 Number of accounts with balances over R205 000 9 Number of accounts under R7 500 235 Number of duplicated accounts, credit balances, missing fields, etc. nil Ageing of total amount: 30 days - R2 319 512 60 days - R1 788 837 90 days - R165 578 120 days - R464 367 Your firm's policy is to perform only positive debtors circularisations and with the Co-operation of Ukay Zedden, the debtors controller, you were able to successfully incorporate your circularisation letters into the company's debtors statement run on 30 April 2021. By the end of May all debtors, other than the three below, had confirmed that the balances reflected on their confirmations were correct and you are about to follow up On the following responses: Debtor Balance Response Boekwurms CC R43 076 As our correspondence with Mutterworths (Pty) Ltd has indicated, we are not going to pay one cent of this amount. It represents a charge for incorrect textbooks which were delivered to us. We ordered the 3d edition of the book and the 2nd edition (which is out of date) was delivered. The books have been stored in our warehouse for 6 months awaiting collection by Mutterworths (Pty) Ltd. We simply will not pay. (5) Printables (Pty) Ltd R116 250 This balanced is overstated by R45 511. A payment by EFT which we made to Mutterworths (Pty) Ltd in February