The audit staff of Adams, Barnes \& Co. (ABC). CPAs, reported the following audit findings in their 205 audit of Keystone Computers \& Networks (KCN) Inc.: 1. Unrecorded liabilities in the amount of $6,440 for purchases of inventory. These inventory items were counted and induded in the year-end total. 2. Projected misstatement from confirmation of accounts receivable in the amount of $2,042 understatement. 3. Projected misstatement from price tests of inwentory of $9,510 overstatement. 4. The stalf of ABC beliowes that the amount of KCN's allowance for uncollectible accounts should be increased by $5,000. In addition. the audit statt has derided that for evaluating a material misstatement of the financial statements, the following guidelines should be used: a. Prepare a schedule modeled after Figure 16.4 (page 718 ) to be used to evaluate the abown audit findings, assuming that KCNs marginal tax rate is 25 percent b, Decide whether the results indicate that there is a sulficiently low risk of material misstatement to justify ABCs audit opinion