Yijie Chan is the proprietor of a property management company near the campus of a local university. The business has cash of \(\$ 72,000\) and furniture that cost \(\$ 24,000\) and has a market value of \(\$ 30,000\). Debts include accounts payable of \(\$ 20,000\). Chan's personal home is valued at \(\$ 800,000\), and her personal bank account contains \(\$ 22,000\).

1. Consider the accounting assumptions, principles, and constraints discussed in the chapter, and identify the one that best matches each of the following situations:

a. Chan's personal assets are not recorded on the property management company's balance sheet.

b. Chan records furniture at its cost of \(\$ 24,000\), not the market value of \(\$ 30,000\).

c. Chan does not make adjustments for inflation.

d. Chan missed recording a \(\$ 2.50\) cup of coffee on her financial statements. She does not ask her accountant to redo the financial statements because that would cost her an extra \(\$ 400\).

2. How much is the owner's equity of the property management company?