Precision Vision Corporation (PVC) is a Canadian firm selling high-quality glass lenses to individual eye-wear customers by mail order. For 2017, recorded revenue was $1,950,000, and total assets were $1,550,000, while gross profit was $950,000 and net earnings were $550,000. PVC wants to expand, and is seeking to raise capital in the United States. To enhance the credibility of its financial statements, PVC has hired a prominent CPA firm, Hardin & Associates (H&A), to audit its 2017 financial statements. PVC management wants to show the best earnings and financial position possible to maximize its prospects to raise capital. Your H&A team audit of PVC reveals the following items: a. Your team selected a sample of 80 accounts from approximately 8,000 customer receivables. The total book value of PVC receivables is $525,000. Your team found that two sampled accounts had exceptions - a $500 account had an audited value of $300, and a $15 account had an audited value of $3. The sample was stratified; projecting the errors to the population of PVC receivables, your team finds support for the range of $475,000 to $515,000 after adjusting for sampling error. b. PVC's beginning inventory was under-stated by $7,500 due to a waived (as immaterial) audit adjustment in 2016 by the previous auditor. The current year audit sample consisted of items comprising about 20 percent of the $810,000 book value of PVC's ending inventory, and the sample was not stratified. Your team found various errors in inventory costs. Some errors were over-statements and some were under-statements. Over the set of sample items examined, the net impact was a $125 over-statement. c. PVC management changed the useful life for depreciation of certain production equipment. This change reduced depreciation expense by $8,000 compared to what it would have been using the previous estimated useful life. d. PVC management asserts warranty expense to be $50,000. The team estimates it to be $75,000, but the e