Develop the expected amounts for 20X4 for each of the income statement items.

Planning the Audit

 

Develop the expected amounts for 20X4 for each of the income statement items

(based on what she believes in 1-6 above). Uden’s unaudited financial

statements for the current year show a 31 percent gross profit rate. Assuming

that this represents a misstatement from the amount that you developed as an

expectation, calculate the estimated effect of this misstatement on net income

before taxes for 20X4.

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