Carleton Builders Ltd. recorded the following summarized transactions during the current year.

a. The company originally sold and issued 100,000 common shares. During the current year, 94,000 of these shares were outstanding and 6,000 were repurchased from the shareholders and retired. Near the end of the current year, the Board of Directors declared and paid a cash dividend of $8 per share. The dividend was recorded as follows: General Journal Debit Credit Retained earnings 800,000 Cash ($8 94,000) 752,000 Dividend income ($8 6,000) 48,000

b. Carleton Builders Ltd. purchased a machine that had a list price of $90,000. The company paid for the machine in full by issuing 10,000 common shares (market price = $8.50). The purchase was recorded as follows: General Journal Debit Credit Machine 90,000 Share capital ($8.50 10,000) 85,000 Gain on purchase of equipment 5,000

c. Carleton needed a small structure for temporary storage. A contractor quoted a price of $769,000. The company decided to build the structure itself. The cost was $542,000, and construction required three months. The following entry was made: General Journal Debit Credit Buildingswarehouse 769,000 Cash 542,000 Revenue from self-construction 227,000

d. Carleton owns a plant located on a river that floods occasionally. A severe flood occurred during the current year, causing an uninsured loss of $97,000 (measured as the amount spent to repair the flood damage). The following entry was made: General Journal Debit Credit Retained earnings, flood loss 97,000 Cash 97,000

e. On 28 December, the company collected $76,000 cash in advance for merchandise to be shipped in January. The companys fiscal year-end is 31 December. This transaction was recorded on 28 December as follows: General Journal Debit Credit Cash 76,000 Sales revenue 76,000

Required: For each transaction, select which accounting principle was violated.

a. The company originally sold and issued 100,000 common shares. During the current year, 94,000 of these shares were outstanding and 6,000 were repurchased from the shareholders and retired. Near the end of the current year, the Board of Directors declared and paid a cash dividend of $8 per share. 1. Revenue principle and representational faithfulness 2. Cost principle and revenue recognition 3. Cost principle 4. Representational faithfulness

b. Carleton Builders Ltd. purchased a machine that had a list price of $90,000. The company paid for the machine in full by issuing 10,000 common shares (market price = $8.50). 1. Revenue principle and representational faithfulness 2. Cost principle and revenue recognition 3. Cost principle 4. Representational faithfulness

c. Carleton needed a small structure for temporary storage. A contractor quoted a price of $769,000. The company decided to build the structure itself. The cost was $542,000, and construction required three months. 1. Revenue principle and representational faithfulness 2. Cost principle and revenue recognition 3. Cost principle 4. Representational faithfulness

d. Carleton owns a plant located on a river that floods occasionally. A severe flood occurred during the current year, causing an uninsured loss of $97,000 (measured as the amount spent to repair the flood damage). 1. Revenue principle and representational faithfulness 2. Cost principle and revenue recognition 3. Cost principle 4. Representational faithfulness

e. On 28 December, the company collected $76,000 cash in advance for merchandise to be shipped in January. The companys fiscal year-end is 31 December. 1. Revenue principle and representational faithfulness 2. Cost principle and revenue recognition 3. Cost principle 4. Representational faithfulness

In each instance, indicate how the transaction should have been originally recorded. (If no entry is required for a transaction/event, indicate "No journal entry required".