Left and Right PAs audited the accounts receivable of Investo Limited on a sample basis. There were 2,000 customer accounts in the subsidiary ledger with a total recorded value of $375,000. As part of the audit program, Left and Right selected a sample of 100 accounts having a recorded value of $20,000. They performed the audit procedures and determined that the audited amount of the sample totalled $19,000. 

Required:

A) Calculate the projected likely misstatement (PLM) using (1) the average difference method and (2) the ratio method.

B) Evaluate the results of the calculation in part a. - assume that Left and Right set the tolerable misstatement for accounts receivable at $25,000.