Reference no: EM132569576
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.