CHERE TO SAVE YOUR WORK F G H M 1 D Conceptual Framework (v2) For each of the following 7 situations, in the space provided below: 3 a) List the foundational principle (FP) and/or qualitative characteristic (QC) and/or enhancing characteristic (EC) of financial information that applies in each case: (1 Mark each) b) State whether the FP. ac, or EC is being followed or violated: (1 Mark each) AND c) Briefly explain WHY/HOW do you think the FP, QC, or EC is being violated or followed. (1 Mark each) 5 6 8 The following 7 situations are provided below: 1. For its factory equipment. Unrequited Love Inc. used accelerated depreciation in 20X2; straight-line depreciation in 20X3; and accelerated depreciation in 20x4. 9 Aaronist Ltd. sold a tract of land on credit by accepting a $55,000, two-year, non-interest-bearing note. The land account was credited (and notes receivable was debited) for $55,000. The going rate of interest was 10%. 10 11 3. JED Inc. always issues its annual financial report nine months after the end of the annual reporting period to ensure greater accuracy. 12 4. Idiomatic Inc. always recognizes its sales revenue when received in cash. 5. RBJ Corporation records interest income only on the payment dates. 13 14 6. Loran Co. Includes among its financial statement elements an apartment building owned and operated by the owner of the company. 7. Adam Ltd.'s CEO refuses to permit the company to use notes or supplementary schedules in its financial reports because he believes that the financial 15 statements are self-explanatory. 16 17 Instructions 8 Please use the template below to respond to requirements a, b, and c for the 7 situations above. I Conceptual Framework (V2) New EADY CHERE TO SAVE YOUR WORK F G H M 1 D Conceptual Framework (v2) For each of the following 7 situations, in the space provided below: 3 a) List the foundational principle (FP) and/or qualitative characteristic (QC) and/or enhancing characteristic (EC) of financial information that applies in each case: (1 Mark each) b) State whether the FP. ac, or EC is being followed or violated: (1 Mark each) AND c) Briefly explain WHY/HOW do you think the FP, QC, or EC is being violated or followed. (1 Mark each) 5 6 8 The following 7 situations are provided below: 1. For its factory equipment. Unrequited Love Inc. used accelerated depreciation in 20X2; straight-line depreciation in 20X3; and accelerated depreciation in 20x4. 9 Aaronist Ltd. sold a tract of land on credit by accepting a $55,000, two-year, non-interest-bearing note. The land account was credited (and notes receivable was debited) for $55,000. The going rate of interest was 10%. 10 11 3. JED Inc. always issues its annual financial report nine months after the end of the annual reporting period to ensure greater accuracy. 12 4. Idiomatic Inc. always recognizes its sales revenue when received in cash. 5. RBJ Corporation records interest income only on the payment dates. 13 14 6. Loran Co. Includes among its financial statement elements an apartment building owned and operated by the owner of the company. 7. Adam Ltd.'s CEO refuses to permit the company to use notes or supplementary schedules in its financial reports because he believes that the financial 15 statements are self-explanatory. 16 17 Instructions 8 Please use the template below to respond to requirements a, b, and c for the 7 situations above. I Conceptual Framework (V2) New EADY