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The following decisions about the audit of inventory for ABC Inc. have been determined by the partner-in-charge: Total recorded value $1,200,000 Materiality $100,000 Sample size

The following decisions about the audit of inventory for ABC Inc. have been determined by the partner-in-charge:

Total recorded value

$1,200,000

Materiality

$100,000

Sample size

60

Average percent of error assumption - overstatements

50%

Average percent of error assumption - understatements

50%

Acceptable risk of incorrect acceptance

10%

Required: Calculate the initial overstatement and understatement bounds. Use three decimal places.

Overstatements

Number of Misstatements

Upper Precision Limit

Total Upper Precision Limit

Recorded Value

Misstatement Unit Error Assumption

Bound Portion

0

Blank 1. Fill in the blank, read surrounding text.

Blank 2. Fill in the blank, read surrounding text.

1,200,000

Blank 3. Fill in the blank, read surrounding text.

Blank 4. Fill in the blank, read surrounding text.

1

Blank 5. Fill in the blank, read surrounding text.

Blank 6. Fill in the blank, read surrounding text.

1,200,000

Blank 7. Fill in the blank, read surrounding text.

Blank 8. Fill in the blank, read surrounding text.

2

Blank 9. Fill in the blank, read surrounding text.

Blank 10. Fill in the blank, read surrounding text.

1,200,000

Blank 11. Fill in the blank, read surrounding text.

Blank 12. Fill in the blank, read surrounding text.

3

Blank 13. Fill in the blank, read surrounding text.

Blank 14. Fill in the blank, read surrounding text.

1,200,000

Blank 15. Fill in the blank, read surrounding text.

Blank 16. Fill in the blank, read surrounding text.

Initial overstatement bound

Blank 17. Fill in the blank, read surrounding text.

Understatements

0

Blank 18. Fill in the blank, read surrounding text.

Blank 19. Fill in the blank, read surrounding text.

1,200,000

Blank 20. Fill in the blank, read surrounding text.

Blank 21. Fill in the blank, read surrounding text.

1

Blank 22. Fill in the blank, read surrounding text.

Blank 23. Fill in the blank, read surrounding text.

1,200,000

Blank 24. Fill in the blank, read surrounding text.

Blank 25. Fill in the blank, read surrounding text.

2

Blank 26. Fill in the blank, read surrounding text.

Blank 27. Fill in the blank, read surrounding text.

1,200,000

Blank 28. Fill in the blank, read surrounding text.

Blank 29. Fill in the blank, read surrounding text.

Initial understatement bound

Blank 30. Fill in the blank, read surrounding text.

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