9-26 you are in charge of Hipp Supply Company for the year ended December 31. In prior years, your firm observed the inventory and tested compilation and pricing. Various misstatements were always found. About 10 percent of the dollar value of the university is usually tested. This year you have established the tolerable misstatement to be $50,000. The entitys book value is $97,500. The entity has 960 inventory items, the number of which has been determined by examining inventory codes. Each item will be tagged with a prenumbered inventory tag numbered from1 to 960. You plan to evaluate the results using classical variables sampling (difference estimation). Assume you have selected a sample of 100 items randomly. For each sample item, audit test are performed to make sure that the physical count is correct, the pricing is accurate, and the extensions of unit price and quantity are correct. The results are summarized as follows: Inventory Audit Tag Number Book Value Audit Value Difference (Audit Difference) 6 $ 100 $ 100 $ 0 $ 0 42 85 85 0 0 46 120 120 0 0 51 420 450 30 900 55 18 18 0 0 56 10 10 0 0 . . . . . . . . . . . . . . . 851 25 25 0 0 854 152 150 2 4 857 85 85 0 0 862 76 86 10 100 Total $ 10,147 $9,666 $481 $8,895 There were 50 differences, making up the net difference of $481. The recorded total of entitys inventory sheets is $97,500. Required: Determine the results of the audit tests using a desired confidence level of 90 percent. Indicate whether the evidence supports the fair presentation of inventory account