The audit staff of Adams, Barnes, &Co (ABC) CPAs reported the following audit findings in their 20X5 audit of keystone Computers and Networds (KCN) Inc

1. Unreconciled liabilities in the amount of $6440 for purchase of Inventory. These inventory items were counted and included in the year end total

2. Projected misstatement from confirmation of accounts receiveable in the amount of $2042 understatement

3. Projected misstatements from price tests of inventory of $9510

4. The staff of ABC believes that the amount of KCN's allowance for uncollectable accounts should be increased by $5000

In addition the audit staff has decided that for evaluating missatement of the financial statements the following guidelines will be used:

current assets $50000

noncurrent assets $75000

Current Liabilities 50000

Noncurrent Liabilities 75000

Net income before taxes 65000

Required:

1. Prepare a schedule modeled after Figure 16.4 to be used to evaluate the above audit findings. *** USE THE TEMPLATE PROVIDED BELOW PLEASE, answer total uncorrected, tax effect at 25%, after tax effect, prior year misstatements, after tax and prior year's effects**** See Excel Template below Please*****

2. Decide whether the results indicate that there is sufficient low risk of material misstatements to justify ABC's Audit opinion

16-49 Keystone Computers & Networks, Inc. Total Likely Misstatement Decembr 31, 20X5 Overstatements (Understatements) Assets Liabilities Income Statement Selling, Gen. Admin. Current Non-current Non-current Current (6,440) Revenue Cost of Sales 6,440 Income 6,440 (2,042) Number Type 1 Factual 2 Projected Misstatement 3 4 Total Uncorrected Tax effect at 25% After Tax Effect Prior year misstatements After tax and prior year's effects Totals per financial statement Percent of unrrecorded to f.s. 9,941,620 1,938,547 8,184,489 456,700 96,459,566 74,122,435 20,624,115 989,275