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McNamara Limited purchases land from its president for $390,000 in cash. The land was purchased by the president 15 years

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McNamara Limited purchases land from its president for $390,000 in cash. The land was purchased by the president 15 years ago for $45,000.
(a) Assume that McNamara follows accounting standards for private enterprises (ASPE). Prepare the journal entry to record the purchase of the land. Use the decision tree in Illustration 23-5 to explain the basis for your answer. What information should be disclosed for this transaction?
(b) How would your answer to part (a) change if McNamara were to follow IFRS?

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a Land 390 000 Cash 390 000 This is a related party transaction The transaction is considered not …View the full answer


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Aun Ali
I am an Associate Member of Cost and Management Accountants of Pakistan with vast experience in the field of accounting and finance, including more than 17 years of teaching experience at university level. I have been teaching at both undergraduate and post graduate levels. My area of specialization is cost and management accounting but I have taught various subjects related to accounting and finance.
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Intermediate Accounting

Intermediate Accounting

ISBN: 978-0470161012

9th Canadian Edition, Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.

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Question Posted: August 23, 2015 09:14:40
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