Assume the following information regarding company INDMACH that manufactures industrial machinery (consider each case independently):

1. INDMACH is being sued for €1,000,000 by its customers for damage caused to them by INDMACH’s products. The amount is regarded considerable, and INDMACH is not insured. The INDMACH has not disclosed the suit in its recent financial statements arguing that no settlement has been reached with its customers.

2. INDMACH purchased an equipment for €2,000,000 (a considerable amount). INDMACH recorded the purchase as an expense.

3. XT is the major shareholder of INDMACH. The company paid an amount of €2,000 for personal expenses of XT. The company recorded the amount as an expense.

4. INDMACH received an order of €1,000,000 (a material amount) from the customer. INDMACH recorded the amount as a revenue the day received the order.

5. INDMACH has not prepared and has not published financial statements for over four years.

6. INDMACH purchased a piece of machinery at a price of €300,000. An independent evaluator estimated the market value of the machinery at the purchase date at €400,000. The company recorded the value of the machinery at the day of purchase in the amount of €400,000.

Required:

Identify the accounting that was violated (if any) in each of the above situations. Explain your answer (word limit 500)