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Pat Colt is auditing the financial statements of Manning Company. The following is a summary of the uncorrected misstatements that Colt has identified during the past three years. These misstatements are immaterial and have related to isolated matters. In this summary, parentheses imply that the misstatements would have reduced balances if they had been corrected $($e$.$g$.,$ in $2017,$ the misstatements would have reduced net income by $$82,500,$ assets by $$100,000,$ liabilities by $$17,500,$ and equity by $$82,500$ if corrected$).$ Year Effect on Net Income Effect on Assets Effect on Liabilities Effect on Equity $2017$ $ $(82,500)$ $ $(100,000)$ $ $(17,500)$ $ $(82,500)2018(22,000)(25,500)(3,500)(22,000)201930,00030,000030,000$ During the most recent audit, Colt concluded that expenses totaling $$130,000$ were recognized in January $2021($when Manning paid them$)$ but should have been recognized in $2020.$ Required: a$.$ What is the dollar impact of the misstatement identified in $2020$ on each of the following $($assume a $21\%$ tax rate for Manning$)?$ b$.$ Describe the rollover method of evaluating uncorrected misstatements. Assume that performance materiality was set at $$170,000.$ How would Colt evaluate the materiality of the misstatement under the rollover method? What adjustments $($if any$)$ would Colt propose to Manning$$s financial statements? c$.$ Describe the iron curtain method of evaluating uncorrected misstatements. Assume that performance materiality was set at $$170,000.$ How would Colt evaluate the materiality of the $$130,000$ misstatement in $2020$ under the iron curtain method? What adjustments $($if any$)$ would Colt propose to Manning$$s financial statements? d$.$ What is the total misstatement amount to consider when evaluating materiality under each of the following methods: e$.$ Under each method, what is the minimum amount of adjustment Colt would propose to Manning's Company's financial statements?

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