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ABC has two parcels of land, each of which were bought for $100,000 in 1970. In 2022, each of the parcels were assessed to be

ABC has two parcels of land, each of which were bought for $100,000 in 1970.  In 2022, each of the parcels were assessed to be worth $5 million. ABC sells one parcel to X Corp. for $100,000 and sells the other parcel to Y Corp. for $4.5 million.

1. Which transaction should the auditor pay close attention to, and why?

 
 

2. Discuss the legal and accounting issues associated with the transaction you identified in.

 
 

3. What is the "carrying" value of each of the properties listed?

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1 The transaction that the auditor should pay close attention to is the sale of one parcel to Y Corp for 45 million This transaction raises concerns d... blur-text-image

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