Question

In: Statistics and Probability

A CPA knows from past history that the average accounts receivable for a company is $521.72...

A CPA knows from past history that the average accounts receivable for a company is $521.72 with a standard deviation of $584.64. If the auditor takes a simple random sample of 100 accounts, what is the probability that the mean of the sample is within $120 of the population mean?

Solutions

Expert Solution

Solution :

Given that ,

mean = = 521.72

standard deviation = = 584.64

n = 100

=   =521.72

= / n = 584.64 / 100 = 58.464

within 120 = 521.72 ± 521.72 = 401.72, 641.72

P(401.72 < < 641.72)  

= P[(401.72 - 521.72) / 58.464 < ( - ) / < (641.72 - 521.72) / 58.464)]

= P(-2.05 < Z < 2.05)

= P(Z < 2.05) - P(Z < -2.05)

Using z table,  

= 0.9798 - 0.0202

= 0.9596

Probability =0.9596

orchestra answered 2 years ago
Next > < Previous

Related Solutions

An auditor knows from past history that the average accounts receivable for ABC Company is $441.27...
An auditor knows from past history that the average accounts receivable for ABC Company is $441.27 with a standard deviation of $555.48. Suppose the auditor takes a sample of 100 accounts. a. What is the probability that the mean of the sample will be within $100 of the population mean? b. What is the probability that the mean of the sample will more than $580?
4. From past experience, the owner of a restaurant knows that, on average, 5% of the...
4. From past experience, the owner of a restaurant knows that, on average, 5% of the groups that make reservations never show, and 7% of the groups that make reservations show up late (the other 88% percent show up on time). a) How many reservations can the owner accept and still be at least 80% sure that all parties that make a reservation will show? b) How many reservations can the owner accept and still be at least 90% sure...
Suppose a company accepts a Note Receivable to settle a past due balance in Accounts Receivable....
Suppose a company accepts a Note Receivable to settle a past due balance in Accounts Receivable. How would the company record this transaction? Provide an example and related journal entry. *explain
A company reports the following: Sales $433,620 Average accounts receivable (net) 16,060 Determine (a) the accounts...
A company reports the following: Sales $433,620 Average accounts receivable (net) 16,060 Determine (a) the accounts receivable turnover and (b) the number of days' sales in receivables. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume a 365-day year. a. Accounts receivable turnover b. Number of days' sales in receivables days
A company sells LED bulbs in packages of 20 for $25. From past records, it knows...
A company sells LED bulbs in packages of 20 for $25. From past records, it knows that a bulb will be defective with probability 0.01. The company agrees to pay a full refund if a customer finds more than 1 defective bulb in a pack. If the company sells 100 packs, how much should it expect to refund?
The Mountain Top Shoppe has sales of $512,000, average accounts receivable of $31,400 and average accounts...
The Mountain Top Shoppe has sales of $512,000, average accounts receivable of $31,400 and average accounts payable of $24,800. The cost of goods sold is equivalent to 71 percent of sales. How long does it take The Mountain Top Shoppe to pay its suppliers? HG Livery Supply had a beginning accounts payable balance of $57,300 and an ending accounts payable balance of $55,100. Sales for the period were $610,000 and costs of goods sold were $458,000. What is the average...
A researcher knows from the past that the standard deviation of the time it takes to...
A researcher knows from the past that the standard deviation of the time it takes to inspect a car is 16.8 minutes. A random sample of 24 cars is selected and inspected. The standard deviation is 12.5 minutes. At a= 0.05, can it be concluded that the standard deviation has changed? Use the P-value method. Assume the variable is normally distributed.
Distinguish the accounts receivable from the revenue cycle. What are the steps in managing accounts receivable?...
Distinguish the accounts receivable from the revenue cycle. What are the steps in managing accounts receivable? Explain each step.
Scott Duffney, CPA, has randomly selected and audited a sample of 100 of Will-Mart’s accounts receivable....
Scott Duffney, CPA, has randomly selected and audited a sample of 100 of Will-Mart’s accounts receivable. Will-Mart has 3,000 accounts receivable accounts with a total book value of $3,850,000. Duffney has determined that the account’s tolerable misstatement is $1,100,000. His sample results are as follows: Average audited value $ 1,280 Average book value 1,286 Required: Calculate the accounts receivable estimated audited value and projected misstatement using the: (Do not round your intermediate calculations and round your final answer to nearest...
Scott Duffney, CPA, has randomly selected and audited a sample of 100 of Will-Mart’s accounts receivable....
Scott Duffney, CPA, has randomly selected and audited a sample of 100 of Will-Mart’s accounts receivable. Will-Mart has 3,000 accounts receivable accounts with a total book value of $3,700,000. Duffney has determined that the account’s tolerable misstatement is $950,000. His sample results are as follows: Average Audited Value $1,230 Average Book Value $1,238 Calculate the accounts receivable estimated audited value and projected misstatement using the: (Do not round your intermediate calculations and round your final answer to nearest whole dollar.)...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT