here are the financial statements:

ULULISU a As it is our first-year auditing a company and starting the ac we need to determine a few things: Required: 4) What would be a good basis to set materiality (Revenue, Assets, Equity, etc)? (Think about the definition of materiality, and what would be important to shareholders-do they care about profitability or how many assets the company has acquired.) (Think about if the company is a non-profit, a start-up, oriented towards building up assets, profitable, etc. Use these factors in your explanation.) (Pick 1 letter and & Explain why.) [EX: B. Net Income because.....] I Revenue b. U Net Income Total Assets Total Equity un Virtual Reality, Inc. Statement of Finalial Condition December 31, 2020 $ Assets Cash and cash equivalents Inventories Property Plan & Equipment (Net of Accum. Repc. Of $1,700,000) Accounts receivable (Net of $1,124,280 allowance for uncollectible Accts.) Other assets 1.741204 6,500,042 3,710,753 4,718,517 1,175,094 Total assets $ 17,485,610 Liabilities and Member's Equity Liabilities: $ Notes Payable Accounts payable and accrued expenses Long Term Debt Total liabilities 5, 139,690 180.579 5,000,000 10,320,269 Stockholder's Equity: Common Stock (no Par Stock, 1 million shares outstanding) Retained Earnings Total Stockholder's Equity 4,496,341 3,029,000 7,525,341 $ 17,485,610 Total liabilities and Stockholder's equity See accompanying notes to financial statements. Styles hos Select Virtual Reality, Inc. Is Editing Statement of Operations Year ended December 31, 2020 Revenues Technology Income (Net of Sales Returns and Discounts) Dividend and Interest Income Other revenue Total Revenues $ 30,174,531 10,597 4,159 Expenses 30,189,287 Cost of Goods Sold Fees to Parent for rent, staff, etc. Legal, professional, audit, and regulatory fees Salary Expense Interest expense Depreciation & Amortization expense Other expenses Total Expenses Settlement expense (from lawsuit) 15,832,849 1,200,000 207,398 1,014,336 15,526 70,000 65,646 18,405,755 1,000,000 s Net Income 10,783,532 See accompanying notes to financial statements. Focus 20 ant NOTE: You will need to review the financial statements provided see file "Financial Statements" attached in Blackboard As it is our first-year auditing a company and starting the audit we need to determine a few things: Required: 4) What would be a good basis to set materiality (Revenue, Assets. Equity, etc)? (Think about the definition of materiality, and what would be important to shareholders- do they care about profitability or how many assets the company has acquired.) (Think about if the company is a non-profit, a start-up, oriented towards building up assets, profitable, etc. Use these factors in your explanation.) (Pick i letter and & Explain why.) [EX: B. Net Income because.......] O Revenue b. O Net Income Total Assets O Total Equity