The accounts receivable population for Jake’s Bookbinding Company follows, and it is also available in electronic form on the textbook website. This table is the same as Table 17-1 on page 578, except that cumulative amounts are included to assist you in completing the problem. The population is smaller than is ordinarily the case for statistical sampling, but an entire population is useful to show how to select PPS samples.
a. Select a random PPS sample of 10 items, using computer software.
b. Select a sample of 10 items using systematic PPS sampling. Use a starting point of
1857. Identify the physical units associated with the sample dollars.
c. Which sample items will always be included in the systematic PPS sample regardless
of the starting point? Will that also be true of random PPS sampling?
d. Which method is preferable in terms of ease of selection in this case?
e. Why will an auditor use MUS?
Population
Item
Recorded
Amount
Cumulative
Amount
Population
Item (cont.)
Recorded
Amount (cont.)
Cumulative
Amount (cont.)
1 $ 1,410 $ 1,410 21 $ 4,865 $117,385
2 9,130 10,540 22 770 118,155
3 660 11,200 23 2,305 120,460
4 3,355 14,555 24 2,665 123,125
5 5,725 20,280 25 1,000 124,125
6 8,210 28,490 26 6,225 130,350
7 580 29,070 27 3,675 134,025
8 44,110 73,180 28 6,250 140,275
9 825 74,005 29 1,890 142,165
10 1,155 75,160 30 27,705 169,870
11 2,270 77,430 31 935 170,805
12 50 77,480 32 5,595 176,400
13 5,785 83,265 33 930 177,330
14 940 84,205 34 4,045 181,375
15 1,820 86,025 35 9,480 190,855
16 3,380 89,405 36 360 191,215
17 530 89,935 37 1,145 192,360
18 955 90,890 38 6,400 198,760
19 4,490 95,380 39 100 198,860
20 17,140 112,520 40 8,435 207,295