Teal Corporation has 2,000 accounts receivable, with a total book value of $300,000. Ricardo Ramaro, CPA, has selected and audited a sample of 100 of the accounts with a combined book value of $16,100; the total of the audited values was $16,000. Using the mean-per-unit method, calculate the:a. Accounts receivable estimated audited value.b. Projected misstatement.
What will be an ideal response?
a. The accounts receivable estimated audited value is calculated as:
| Estimated total audited value | = | Mean audited value × Number of accounts |
| = | $161 × 2,000 accounts | |
| = | $322,000 |
| Projected Misstatement | = | Est. total audited value ? Book value of population |
| = | $322,000 ? 300,000 | |
| = | $22,000 overstatement |
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