Describe the transaction represented by the double entry

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Question - Study the following material and independent transactions below:

Transaction 1

Dr Accumulated depreciation $100,000

Dr Accounts receivable (a related company) $4,900,000

Cr Buildings $2,600,000

Cr Gain on disposal of buildings $2,400,000

Transaction 2

Dr Sales returns $2,000,000

Dr Inventory $1,000,000

Cr Accounts receivable $2,000,000

Cr Cost of sales $1,000,000

Required - For each of the transactions above:

(a) Describe the transaction represented by the double entry;

(b) Describe two (2) audit assertions contained in the transaction that would be of interest to the auditor; and

(c) Describe two (2) substantive audit procedures the auditor will need to perform in order to verify these assertions.

Reference no: EM132569576

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