The estimated total audited value of the population using the difference method is $201,000.
The difference method works as follows :
A difference method is a mathematical expression of the form
f (x + b) − f (x + a). If a finite difference is divided by b − a, one gets a difference quotient.
Given that,
A population of 1,000 accounts .
The sample items have a mean book of $200 and
A mean audited value of $203
Therefore, the difference of $203 - $200 = $3
Now, Apply the difference to the population of accounts and we get,
(1000 account × $3) = $3000
As Given in the question,
The book value in the population is $198,000 and we add the difference previously calculated of $3,000
So, we have = $198,000 + $3,000
= $201,000
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