D.Pujols,CPA,performed a nonstatistical sampling plan to examine the inventory balances of Wieserbud Brewing,Inc.Pujols audited 120 items from a sample and found an audited value of $24,600.The sample had a recorded value of $30,000.If the entire inventory contained 2,400 items and the total recorded value of the inventory was $480,000,the estimated account balance using nonstatistical methods is
A) $393,600.
B) $474,500.
C) $480,000.
D) $500,000.

Question

Quizplus · Accepted Answer

The audited value to recorded value ratio is $24,600/$30,000 = 0.82. Applying this ratio to the total recorded inventory value of $480,000 gives an estimated account balance of $480,000 * 0.82 = $393,600.

DPujols,CPA,performed a Nonstatistical Sampling Plan to Examine the Inventory Balances