Rosman Co. had three major business transactions during 2020.

a. Reported at its fair value of $260,000 merchandise inventory with a cost of $208,000.

b. The president of Rosman Co., Jay Rosman, purchased a truck for personal use and charged it to his Salaries and Wages Expense account.

c. Rosman Co. wanted to make its 2020 income look better, so it added 2 more weeks to the year (a 54-week year). Previous years were 52 weeks.

Instructions

In each situation, identify the assumption or principle that has been violated, if any, and discuss what the company should have done.