You are testing the accounts receivable account of Fruity Ltd for possible material misstatement. Listed below are the initial 10 items from the accounts receivable population: Name of Receivable Balance ($) Apple 5,430 Banana 7,857 Coconut 821 Durian 1,894 Guava 3,500 Honeydew 10,000 Jackfruit 2,740 Lemon 4,716 Mango 2,669 Papaya 1,427 The total of the accounts receivable listing is $450,000, with over 150 customers. You are undertaking a sampling plan of 30 items, and the tolerable error is set at $20,000. Required: (a)Would you be more likely to be concerned with testing for overstatement orunderstatement? Explain your answer. (b)Assume that Dollar Unit Sampling (DUS) with selection by a systematicsampling technique is to be used. You have determined a random start of6,320. Which receivables will be the first three included in the sample? Show all calculations. (c)If the total amount for the samples is $60,000 and the misstatement found inthe samples is $3,000, explain whether the accounts receivables balance ismaterially misstated. Show all calculations. (d)What possible courses of action can you take for your results in part (c)?

You are testing the accounts receivable account of Fruity Ltd for possible material misstatement. Listed below are the initial 10 items from the accounts receivable population: Name of Receivable Apple Banana Coconut Durian Guava Honeydew Jackfruit Lemon Mango Papaya Balance ($) 5,430 7.857 821 1,894 3.500 10,000 2.740 4,716 2.669 1.427 The total of the accounts receivable listing is $450,000, with over 150 customers. You are undertaking a sampling plan of 30 items, and the tolerable error is set at $20,000. Required: (a) Would you be more likely to be concerned with testing for overstatement or understatement? Explain your answer. (b) Assume that Dollar Unit Sampling (DUS) with selection by a systematic sampling technique is to be used. You have determined a random start of 6,320. Which receivables will be the first three included in the sample? Show all calculations (c) If the total amount for the samples is $60,000 and the misstatement found in the samples is $3,000, explain whether the accounts receivables balance is materially misstated. Show all calculations. (d) What possible courses of action can you take for your results part (c)? You are testing the accounts receivable account of Fruity Ltd for possible material misstatement. Listed below are the initial 10 items from the accounts receivable population: Name of Receivable Apple Banana Coconut Durian Guava Honeydew Jackfruit Lemon Mango Papaya Balance ($) 5,430 7.857 821 1,894 3.500 10,000 2.740 4,716 2.669 1.427 The total of the accounts receivable listing is $450,000, with over 150 customers. You are undertaking a sampling plan of 30 items, and the tolerable error is set at $20,000. Required: (a) Would you be more likely to be concerned with testing for overstatement or understatement? Explain your answer. (b) Assume that Dollar Unit Sampling (DUS) with selection by a systematic sampling technique is to be used. You have determined a random start of 6,320. Which receivables will be the first three included in the sample? Show all calculations (c) If the total amount for the samples is $60,000 and the misstatement found in the samples is $3,000, explain whether the accounts receivables balance is materially misstated. Show all calculations. (d) What possible courses of action can you take for your results part (c)