Homework Answers
Going concern assumption: The going concern concept assumes the firm continues for a foreseeable future and has no intention to wind up the business in the near future.
Periodicity concept: Accounting information should report for certain period for example: Quarterly, yearly
Economic entity concept: The transactions of the owner of the business are different from the transactions of business and hence both should be accounted separately
Cost constraint: The assets acquired should be accounted at cost value
Historical cost: The assets should be reported in books of account at historical cost and no other values should be used.
In case of 3 - if bad debt entry is passed there is no violation and entry is correct
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1. Define each of the terms below In 1 sentence, using your own words. GOING...
2. Presented below are some business transactions that occurred during 2019 for ABC Company. Instructions: For...
2. Presented below are some business transactions that occurred during 2019 for ABC Company. Instructions: For each situation below, identify the assumption, concept or constraint that has been violated, if any and why. If the Journal Entry is incorrect, prepare the entry that should have been made. If no Journal Entry is required, state this. 1. A heavy duty stapler costing $25 is being depreciated over 5 years. The following entry was made: Depreciation Expense-Stapler 5 Accumulated Depreciation—Stapler. 5 2....
2. Presented below are some business transactions that occurred during 2019 for ABC Company. Instructions: For...
2. Presented below are some business transactions that occurred during 2019 for ABC Company. Instructions: For each situation below, identify the assumption, concept or constraint that has been violated, if any and why. If the Journal Entry is incorrect, prepare the entry that should have been made. If no Journal Entry is required, state this. 1. A heavy duty stapler costing $25 is being depreciated over 5 years. The following entry was made: Depreciation Expense—Stapler 5 Accumulated Depreciation-Stapler. 5 2....
Presented below is information related to Cramer, Inc. Comment on the appropriateness of the accounting procedures...
Presented below is information related to Cramer, Inc. Comment on the appropriateness of the accounting procedures followed by Cramer, Inc. (a) Depreciation expense on the building for the year was $60,000. Because the building was increasing in value during the year, the controller decided to charge the depreciation expense to retained earnings instead of to net income. The following entry is recorded. Retained Earnings 60,000 Accumulated Depreciation—Buildings 60,000 (b) Materials were purchased on January 1, 2017, for $120,000 and this...
Name: ID #: 2. Instructions: Each of the situations below may illustrate a violation of an...
Name: ID #: 2. Instructions: Each of the situations below may illustrate a violation of an accounting assumption or principle. Indicate the assumption or principle that is most clearly violated using the following codes: Codes A. Economic entity assumption B. Monetary unit assumption C. Time period assumption D. Going concern assumption E. Revenue recognition principle F. Matching principle G. Materiality H. Full disclosure principle L. Cost principle J. Conservatism K. No violation of operating guidelines Situations 1. Stockholders invested an...
P2.3 Transactions from Gravenhurst Inc.'s current year follow. Gravenhurst follows IFRS. 1. Gravenhurst Inc. thinks it...
P2.3 Transactions from Gravenhurst Inc.'s current year follow. Gravenhurst follows IFRS. 1. Gravenhurst Inc. thinks it should dispose of its excess land. While the carrying value is $50,000, current market prices are depressed and only $25,000 is expected upon disposal. The following journal entry was made: Loss on Disposal of Land 25,000 Land 25,000 2. Merchandise inventory that cost $630,000 was reported on the statement of financial position at $690,000, which is the expected selling price less estimated selling costs....
A depreciation schedule for heavy equipment of Beniluz Road Construction Company was requested by your auditor...
A depreciation schedule for heavy equipment of Beniluz Road
Construction Company was requested by your auditor soon after
December 31, 2021, showing the additions, retirements,
depreciation, and other data affecting the income of the company in
the 4-year period 2018 to 2021, inclusive.
The following data were ascertained:
Balance of Equipment account, Jan. 1, 2018
Equipment No. 1 purchased Jan. 1, 2015, cost
$ 50,000
Equipment No. 2 purchased July 1, 2015, cost 60,000
Equipment No. 3 purchased Jan. 1, 2016,...
Presented below are a number of business transactions that occurred during the current year for Ebersole...
Presented below are a number of business transactions that occurred during the current year for Ebersole Ltd. In each of the situations, discuss the appropriateness of the journal entries in terms of IFRS. (a) Merchandise inventory that cost £310,000 is reported on the balance sheet at £345,000, the expected selling price less estimated selling costs. The following entry was made to record this increase in value. Inventory 35,000 Sales Revenue 35,000 (b) Because the general level of prices increased during...
II. Problem Set 1 with Options (Total 39 pts.; 3 pts each) Goebel Company purchased outstanding...
II. Problem Set 1 with Options (Total 39 pts.; 3 pts each) Goebel Company purchased outstanding shares of Dobbs Company's common stock. Under the following two independent scenarios (Situation 1 and 2), use the following information for questions 8-20. Situation 1: Goebel Company acquired a 20% interest in Dobbs Company on December 31, 2018 for $350,000. During 2019 Dobbs Company had net income of $150,000 and paid a cash dividend of $60,000. (Dobbs Company paid $60,000 cash dividend to all...
P2-3 Transactions from Gravenhurst Inc.'s current year follow. Gravenhurst follows IFRS. 1. Gravenhurst Inc. thinks it...
P2-3 Transactions from Gravenhurst Inc.'s current year follow. Gravenhurst follows IFRS. 1. Gravenhurst Inc. thinks it should dispose of its excess land. While the carrying value is $50,000, current market prices are depressed and only $25,000 is expected upon disposal. The following journal entry was made: Loss on Disposal of Land 25,000 Land 25,000 2. Merchandise inventory that cost $630,000 was reported on the statement of financial position at $690,000, which is the expected selling price less estimated selling costs....
On January 1, 2016, Monica Company acquired 70 percent of Young Company's outstanding common stock for...
On January 1, 2016, Monica Company acquired 70 percent of Young Company's outstanding common stock for $672,000. The fair value of the noncontrolling interest at the acquisition date was $288,000. Young reported stockholders' equity accounts on that date as follows Common stock-$10 par value Additional paid-in capital Retained earnings 300,000 60,000 480,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $60,000. Any remaining excess...
2. Presented below are some business transactions that occurred during 2019 for ABC Company. Instructions: For each situation below, identify the assumption, concept or constraint that has been violated, if any and why. If the Journal Entry is incorrect, prepare the entry that should have been made. If no Journal Entry is required, state this. 1. A heavy duty stapler costing $25 is being depreciated over 5 years. The following entry was made: Depreciation Expense-Stapler 5 Accumulated Depreciation—Stapler. 5 2....
2. Presented below are some business transactions that occurred during 2019 for ABC Company. Instructions: For each situation below, identify the assumption, concept or constraint that has been violated, if any and why. If the Journal Entry is incorrect, prepare the entry that should have been made. If no Journal Entry is required, state this. 1. A heavy duty stapler costing $25 is being depreciated over 5 years. The following entry was made: Depreciation Expense—Stapler 5 Accumulated Depreciation-Stapler. 5 2....
Name: ID #: 2. Instructions: Each of the situations below may illustrate a violation of an accounting assumption or principle. Indicate the assumption or principle that is most clearly violated using the following codes: Codes A. Economic entity assumption B. Monetary unit assumption C. Time period assumption D. Going concern assumption E. Revenue recognition principle F. Matching principle G. Materiality H. Full disclosure principle L. Cost principle J. Conservatism K. No violation of operating guidelines Situations 1. Stockholders invested an...
P2.3 Transactions from Gravenhurst Inc.'s current year follow. Gravenhurst follows IFRS. 1. Gravenhurst Inc. thinks it should dispose of its excess land. While the carrying value is $50,000, current market prices are depressed and only $25,000 is expected upon disposal. The following journal entry was made: Loss on Disposal of Land 25,000 Land 25,000 2. Merchandise inventory that cost $630,000 was reported on the statement of financial position at $690,000, which is the expected selling price less estimated selling costs....
A depreciation schedule for heavy equipment of Beniluz Road
Construction Company was requested by your auditor soon after
December 31, 2021, showing the additions, retirements,
depreciation, and other data affecting the income of the company in
the 4-year period 2018 to 2021, inclusive.
The following data were ascertained:
Balance of Equipment account, Jan. 1, 2018
Equipment No. 1 purchased Jan. 1, 2015, cost
$ 50,000
Equipment No. 2 purchased July 1, 2015, cost 60,000
Equipment No. 3 purchased Jan. 1, 2016,...
II. Problem Set 1 with Options (Total 39 pts.; 3 pts each) Goebel Company purchased outstanding shares of Dobbs Company's common stock. Under the following two independent scenarios (Situation 1 and 2), use the following information for questions 8-20. Situation 1: Goebel Company acquired a 20% interest in Dobbs Company on December 31, 2018 for $350,000. During 2019 Dobbs Company had net income of $150,000 and paid a cash dividend of $60,000. (Dobbs Company paid $60,000 cash dividend to all...
P2-3 Transactions from Gravenhurst Inc.'s current year follow. Gravenhurst follows IFRS. 1. Gravenhurst Inc. thinks it should dispose of its excess land. While the carrying value is $50,000, current market prices are depressed and only $25,000 is expected upon disposal. The following journal entry was made: Loss on Disposal of Land 25,000 Land 25,000 2. Merchandise inventory that cost $630,000 was reported on the statement of financial position at $690,000, which is the expected selling price less estimated selling costs....
On January 1, 2016, Monica Company acquired 70 percent of Young Company's outstanding common stock for $672,000. The fair value of the noncontrolling interest at the acquisition date was $288,000. Young reported stockholders' equity accounts on that date as follows Common stock-$10 par value Additional paid-in capital Retained earnings 300,000 60,000 480,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $60,000. Any remaining excess...
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