The following is a copy of the auditor?s working paper for auditing additions and disposals relevant to the balance of property, plant, and equipment (PPE) for the client New Millennium Ecoproducts.

Required

a. What assertions are relevant to additions and disposals of PPE?

b. Find the details of the additions. Explain the difference between the two items, particularly with respect to depreciation.

c. Find the details of the disposal. How much was the gain on sale? Why is the auditor interested in the amount of the gain? Explain the comment by the auditor about the disposal in the working paper.

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Client: New Millennium Ecoproducts Bell & Bowerman, LLP Prepared by: W.C.B. Date: 2/4/23 Period-end: 12/31/22 Reference K02 Reviewed by: R.E.Z. Date: 2/12/23 K02 – Additions and Disposals Currency unit: $000 Section 1: Additions AssetLife Depreciation Starting Date TM/Ref Asset Code Description Category (years) Amount TM/Ref 700025 Delivery van (15) Equipment 5/1/22 (c) $2,750 10 $ 500 N/A CPX 120 Asset under construction N/A (c) N/A Section 2: Disposals Gain/(Loss) TM/Ref on Disposal Selling Gross Book Accumulated Net Book Value Asset Code Description Category Value Depreciation Price Delivery van Equipment $350 $280 $70 $75 $5 600662 Key to audit tick marks: / Agrees to purchase invoice. * Agrees to sales invoice and receipt of payment. (c) Depreciation starting date appears reasonable. Comments: • No issue from testing of additions. Gain on disposal of item tested is not material and confirms relevance of depreciation rate used by company.