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The asset register shows a carrying value 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?
(A) the omission of an addition of land costing $30,000 from the ledger account and the omission of the disposal of an asset from the register (cost $25,600 and accumulated depreciation at disposal 11,200)(B) 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.
What is the difference between (A) and (B) ?The difference is as to whether the items have been dealt with in the asset register or in the T-accounts.
The asset register shows a carrying value 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?
(A) the omission of an addition of land costing $30,000 from the ledger account and the omission of the disposal of an asset from the register (cost $25,600 and accumulated depreciation at disposal 11,200)(B) 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.
Why (B) is suitably correct as compared to (A)??In the t-accounts, the carrying value is 130,000 (185,000 – 55,000).
However the disposal has not been recorded in the t-accounts. The carrying value of the assets disposed off was 14,400.
Therefore the carrying value in the t-accounts should be 130,000 – 14,400 = 115,600In the asset register, the value is 85,600.
However the purchase has not been entered in the register.
Therefore the correct total in the register is 85,600 + 30,000 = 115,600
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