USE THE BELOW TO ANSWER QUESTIONS 4-8 Assume that during your audit of Dundler Miflin, you identify 2 misstatements that need to be included on your Summary of Audit Adjustments (SAD). The first misstatement is in the valuation of Net Accounts Receivable whereby the Allowance for Doubtful Accounts is inadequate and needs to be increased by $110,000. The second misstatement is an error in the Accounts Payable account where Dundler Miflin failed to record cash disbursements related to Accounts Payable at year-end in the amount of $45,000. Answer the questions below related to SAD. QUESTION 4 The entry to record an adjustment to Allowance for Doubtful Accounts would impact the SAD in which of the following ways: a. Increase income by $110,000; increase assets by $110,000; increase equity by $110,000. b. Decrease income by $110,000; decrease assets by $110,000; decrease equity by $110,000. c. Decrease income by $110,000; increase liabilities by $110,000, no impact on equity. d. Increase income by $110,000; decrease assets by $110,000; no impact on equity. e. Increase income by $110,000; decrease assets by $110,000; no impact on equity. f. There is insufficient information to determine the appropriate entry. QUESTION 5 The entry to record the cash disbursements on accounts payable would impact the SAD in which of the following ways: a. Decrease liabilities by $45,000 decrease equity by $45,000. b. Increase liabilities by $45,000; increase cash by $45,000. c. Decrease liabilities by $45,000; increase equity by $45,000. d. Decrease liabilities by $45,000; decrease assets by $45,000. QUESTION 6 Assume that prior year uncorrected misstatements would have decreased equity by $40,000. What are the total misstatements for the current year using the rollover method? a. Total misstatements are $45,000. b. Total misstatements are $195,000. c. Total misstatements are $155,000. d. Total misstatements are $110,000. QUESTION 7 Assume that prior year uncorrected misstatements would have decreased equity by $40,000. What are the total misstatements for the current year using the iron curtain method? a. Total misstatements are $85,000. b. Total misstatements are $195,000. c. Total misstatements are $150,000. d. Total misstatements are $185,000. QUESTION 8 Assume that the client is an issuer and planning materiality was set at $120,000. What is the minimum amount required to be booked as an AJE? a. $0 since total misstatements