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

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
			Depreciation		Asset Life
Asset Code	Description	Category	Starting Date	TM/Ref	(years)	Amount	TM/Ref
700025	Delivery van (15)	Equipment	5/1/22	(c)	10	$2,750
N/A	CPX 120	Asset under construction	N/A	(c)	N/A	$ 500
Section 2: Disposals
			Gross Book	Accumulated	Net Book	Selling		Gain/(Loss)
Asset Code	Description	Category	Value	Depreciation	Value	Price	TM/Ref	on Disposal
600662	Delivery van	Equipment	$350	$280	$70	$75		$5
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.

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

2. Find the details of the additions. Explain the difference between the two items, particularly with respect to depreciation. 3. 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.