Oceanview Marine Company Preliminary Materiality December 31, 2018 1. Planning data Current year (unaudited) Prior year Sales/revenue (net) Expenses 26,419,090 22,861,320 6,316,336 5,669,023 Gross margin 7,285,791 6,331,206 Pre-tax income 969,455 662,183 Current assets 16,516,127 14,753,281 Current liabilities 7,149,557 5,921,882 Total assets 17,112,644 15,365,761 Materiality 50,000 2. Preliminary Judgment about Materiality Measurement base (i.e., net income, revenue, assets) Percentage applied* (rounded) Preliminary materiality *Materiality percentages: Pre-tax net income Assets Equity Revenue Gross profit 3-10% -1% -5% -1% -5% % $ GA 5-2-a These materiality factors are provided as guidelines only, and should be used only as an aid in the development of your professional judgment. The materiality level should represent the largest amount of a misstatement or group of misstatements that would not, in your judgment, influence or change a decision based on the financial statements.