answer agree or disagree for the 7 different situations then choose from the answer choices i added pictures of
For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the accounting concept that is applied if you agree) or violated (if you disagree). 1. Wagner Corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar. 2. Spooner Oil Company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. No mention of the change was included in the financial statements. The change had a material effect on Spooner's financial statements. 3. Cypress Manufacturing Company purchased machinery having a five-year life. The cost of the machinery is being expensed over the life of the machinery. 4. Rudeen Corporation purchased equipment for $180,000 at a liquidation sale of a competitor. Because the equipment was worth $230,000, Rudeen valued the equipment in its subsequent balance sheet at $230,000. 5. Davis Bicycle Company received a large order for the sale of 1,000 bicycles at $100 each. The customer paid Davis the entire amount of $100,000 on March 15. However, Davis did not record any revenue until April 17, the date the bicycles were delivered to the customer 6. Gigantic Corporation purchased two small calculators at a cost of $32.00. The cost of the calculators was expensed even though they had a three-year estimated useful life. 7. Esquire Company provides financial statements to external users every three years. Situation Agree/Disagree Assumption/Constraint Accounting principle W 2. Spooner Ull company changed its meto0 UI accounting for onlang gas exploration COSES Tror Successful enors tu TUN COSL NO mention of the change was included in the financial statements. The change had a material effect on Spooner's financial statements 3. Cypress Manufacturing Company purchased machinery having a five-year life. The cost of the machinery is being expensed over the life of the machinery 4. Rudeen Corporation purchased equipment for $180,000 at a liquidation sale of a competitor Because the equipment was worth $230,000, Rudeen valued the equipment in its subsequent balance sheet at $230,000 5. Davis Bicycle Company received a large order for the sale of 1,000 bicycles at $100 each. The customer paid Davis the entire amount of $100,000 on March 15. However, Davis did not record any revenue until April 17, the date the bicycles were delivered to the customer 6. Gigantic Corporation purchased two small calculators at a cost of $32.00. The cost of the calculators was expensed even though they had a three-year estimated useful life. 7. Esquire Company provides financial statements to external users every three years. eBook Print Situation Agree/Disagree Assumption/Constraint Accounting principle ferences Expense recognition Full disclosure principle Historical cost (original transaction value) principle Materiality Monetary unit assumption 2. Spooner Ull company changed its m ou or accounung Tur Ulang gas explorauon CUSUS IOM SUCCESSIUI enorts 10 TU COSL NO mention of the change was included in the financial statements. The change had a material effect on Spooner's financial statements. 3. Cypress Manufacturing Company purchased machinery having a five-year life. The cost of the machinery is being expensed over the life of the machinery 4. Rudeen Corporation purchased equipment for $180,000 at a liquidation sale of a competitor. Because the equipment was worth $230,000, Rudeen valued the equipment in its subsequent balance sheet at $230,000. 5. Davis Bicycle Company received a large order for the sale of 1,000 bicycles at $100 each. The customer paid Davis the entire amount of $100,000 on March 15. However, Davis did not record any revenue until April 17, the date the bicycles were delivered to the customer. 6. Gigantic Corporation purchased two small calculators at a cost of $32.00. The cost of the calculators was expensed even though they had a three-year estimated useful life. 7. Esquire Company provides financial statements to external users every three years. eBook Print Situation Agree/Disagree Assumption Constraint Accounting principle References Historical cost (original transaction value) principle Materiality Monetary unit assumption Periodicity assumption Revenue recognition 7
