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Q: The asset register shows a carrying amount for non-current assets of $85,600; the ledger accounts include a cost balance of $185,000 and an accumulated depreciation balance of $55,000.
Which of the following may explain the discrepancy?
The answer is- The omission of the disposal of an asset from the ledger accounts (cost $25,600 and accumulated depreciation at disposal $11,200) and the omission of an addition of land costing $30,000 from the register.
I don’t understand where the numbers are coming from.
You have not said where you found this question, or what the choices were in the question.
The numbers are presumably given in the choices that are given to you in the question!!At the moment the asset register shows 85,600, and the carrying value in the accounts is 185,000 – 55,000 = 130,000.
If the ledger accounts have missed out that disposal, then when the asset is removed the correct balance will be 130,000 – (25600 – 11200) = 115,600
If the addition of land has been missed from the register, then the correct total in the register is 86,600 + 30,000 = 115,600
The two now agree 🙂
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