(1) Presented below are some business transactions that occurred during 2008 for Vicki Prowitz Company. 1. Merchandise inventory with a cost of $208,000 is reported at its market value of $260,000. The following entry was made. Merchandise Inventory 52,000 Gain 52,000 2. Equipment worth $62,000 was acquired at a cost of $41,000 from a company that had water damage in a flood. The following entry was made. Equipment 62,000 Cash 41,000 Gain on Purchase of Equipment 21,000 3. The president of Vicki Proqitz Company, Mark Nabke, purchased a truck for personal use and charged it to his expense account. The following entry was made. Travel Expense 18,000 Cash 18,000 4. An electric pencil sharpener costing $50 is being depreciated over 5 years. The following entry was made. Depreciation Expense Pencil Sharpener 10 Accumulated Depreciation Pencil Sharpener 10 Question: In each of the situations above, identify the assumption, principle, or constraint that has been violated, if any. Discuss the appropriateness of the journal entries, and give the correct journal entry, if necessary. Question (2) Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows. Jan. 2 Invested $10,000 cash in the business in exchange for common stock. 3 Purchased used car for $4,000 cash for use in business. 9 Purchased supplies on account for $500. 11 Billed customers $1,800 for services performed. 16 Paid $200 cash for advertising. 20 Received $700 cash from customers billed on January 11. 23 Paid creditor $300 cash on balance owed. 28 Declared and paid a $1,000 cash dividend. Use the following format, in which the January 2 transaction is given as an example. Account Debited Account Credited Data for D. Reyes, Inc., interior decorating, are presented in E2-2. Instructions Journalize the transactions using journal page J1. (You may omit explanations.)