Based on this financial statement calculate materiality for the ensuing audit

MATERIALITY DECISIONS AND PERFORMING ANALYTICAL PR CHAPTER 8 , LTYD ANALYTICAL PROCEDURES 1341] Figure 8-12 Household, Inc. Summary Financial Statements ($ 000 Omitted) Income Statement 20x6 20x5 Sales Cost of sales Selling general and administrative expe Other income and expense Income tax expense Gross proft Operating income Pretax income $ 3,513 $ 2,622 $ 891 $ 3,413 $ 2475 $ 938 $ 781 $ 157 nses $ (13) $ (14) S 143 s 32 Net income $49$88 Balance Sheet Cash and cash equivalents Accounts receivable Inventories $ 208 $ 89 5 1,183 $ 1,480 $ 190 $ 73 $ 1,179 $ 1,442 Current assets Property, plant and equipment Goodwill S 630 $ 96 S 2,206 $ 649 $ 88 Total assets $2179 $ 565 $ 401 $121 Accounts payable Accrued expenses Taxes, including income taxes Total current liabilities Long-term debt $ 638 $ 376 $ 93 $1.107 $ 152 $ 1,259 $ 661 $ 1,087 $ 150 $ 1,237 Total liabilities Common stock Retained earnings $ 661 $ 308 $ 969 $ 920 Total equity Total liabilities and equity $2206 $2.179 Summary Cash Flow Information Cash flow from operations Cash flow from investing activities Cash flow from financing activities $ 175 $ (90) s 10 $ 95 $ 127 $ (107) Change in cash on the sale of this inventory. No other problems h the not realizable value audit objective. Tolerable misstate- pany can realize approximately $175,000