An inexperienced accountant for Cant Add Company recorded the following transactions in the records of the company for the year ended December 31, 2021. The controller has questioned the appropriateness of the entries since she thinks that they have not been recorded in accordance with generally accepted accounting principles. Profit for the year, including the entries described below, is $ 200,000.

1. On January 1, the company president, the owner of the company, took a personal vacation trip to the Gasp. The trip cost $ 3,000. The accountant recorded the entry as follows:

Travel Expense...................................................................................... 3,000

Accounts Payable..................................................................................... 3,000

2. The company purchased on account a wastebasket on December 31 at a cost of $ 20. The accountant made the following entry:

Office Equipment........................................................................... 20

Accounts Payable................................................................... 20

3. Merchandise inventory that cost $ 14,000 had a current net replacement value of $ 22,000. The accountant made the following entry as a result:

Merchandise Inventory................................................................. 8,000

Gain on fair value adjustment............................................... 8,000

4. Equipment with a fair market value of $ 15,000 was acquired in a liquidation sale for cash at a cost of $ 10,000. The accountant recorded the transaction as follows:

Equipment....................................................................................... 15,000

Cash......................................................................................... 10,000

Gain on fair value adjustments............................................. 5,000

5. Cant Add uses the allowance method. A customer's account receivable for $ 17,000 was uncollectible and the following entry was made:

Bad Debt Expense........................................................................ 17,000

Accounts Receivable............................................................. 17,000

Required:

a) For each of the above entries, indicate the concept or constraint that was violated.

b) Determine the correct profit for 2021.