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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New Millennium Ecoproducts CLIENT: EY Period-end: Dec. 31, 2016 - ADDITIONS AND DISPOSALS $000 Currency/unit: ко2 Reference Debit/ ко2 Section 1: Additions Depreciation Asset Life Starting Date TM/Ref (years) Amount TM/Ref Asset Code Description Category 700025 Delivery van (15) Equipment 2,750 05/01/16 10 N/A CPX 120 Asset under construction N/A N/A 500 Section 2: Disposals Gross Book Accumulated Net Book Selling Gain/(Loss) Price TM/Ref on Disposal Asset Code Description 600662 Delivery van Category Value Depreciation Value 350 280 Equipment 70 75 Key to audit tickmarks: V Agrees to purchase invoice * Agrees to sales invoice and receipt of payment c OK depreciation starting date appears reasonable Comments: V No issue from testing of additions V Gain on disposal of item tested is not material and confirms relevance of depreciation rate used by company.