5. The manager of a business has heard that the business might be sold and that he might lose his job as a result. When preparing a balance sheet for the owner, the manager values everything as low as possible in order to discourage the prospec- tive buyer. He claims that this practice is allowed by the principle of conservatism. a. Is the manager correct in his claim? b. Which GAAP(s) affect this situation? Explain. 6. A figure of $25 000 for computerized office equipment appears on a company bal- ance sheet. Recently, better quality equipment has been developed and put on the market. However, the existing equipment still does an adequate job for the com- pany, and the company has no intention of replacing it. a. Should the equipment figure be eliminated because it represents obsolete equipment? b. Which GAAP(s) affect this situation? Explain