W Fire. CPA is examining the accounts receivable (which were recorded at 5500.000) for TEE. Inc.. using

Question:

W Fire. CPA is examining the accounts receivable (which were recorded at 5500.000) for TEE. Inc.. using a monetary unit sampling application. Using a risk of incorrect acceptance of 5% and a tolerable misstatement of 550.000. Fire has determined a sample size of 100 items and found the following three misstatements

Account Number................. Recorded Balance................. Audited Balance

128................................................ 52,500 ................................$1,250

415................................................. $2,000................................$1,500

526................................................. $8,000............................... $7,000

a. What sampling interval did Fire use?

b. Based on the preceding information, calculate the (1) actual misstatement (2) projected misstatement (3) incremental allowance for sampling risk. and (4) basic allowance for sampling risk.

c. What is the upper limit on misstatement?

d. Based on the preceding information, what would Fire's conclusion be with respect to Tan accounts receivable balance?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...