PIC Inc. has prepared a trial balance of general ledger accounts from which the following information is extracted:

For convenience assume that all known error will be corrected and expected error will be negligible. Also, assume that in planning tests of details for accounts receivable you have decided that a 5 percent risk of incorrect acceptance is appropriate and that the receivable balance contains no individually significant items.

Required: 

What sample size would you use for confirmation of accounts receivable under each of the following circumstances:

a. Planning materiality is to be 1 percent of total revenue.

b. Planning materiality is to be 1 percent of total assets.

c. Planning materiality is to be 10 percent of pretax income. Which sample size is correct?

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Accounts receivable Total assets Total revenue Pretax income $ 100,000 900,000 2,000,000 500,000