E2-10 (L06) GROUPWORK (Accounting Principles-Comprehensive) Presented below is information related to Cramer In Instructions Comment on the appropriateness of the accounting procedures followed by Cramer, Inc. (a) Depreciation expense on the building for the year was $60,000. Because the building was increasing in value during the year, the controller decided to charge the depreciation expense to retained earnings instead of to net income. The fol. lowing entry is recorded. Retained Earnings 60,000 Accumulated Depreciation-Buildings (b) Materials were purchased on January 1, 2017, for $120,000 and this amount was entered in the Materials account. On December 31, 2017, the materials would have cost $141.000, so the following entry is made. Inventory 21,000 Gain on Inventories 21,000 (dDuring the year, the company purchased equipment through the issuance of common stock. The stock had a par value of $135.000 and a fair value of $450,000. The fair value of the equipment was not easily determinable. The company recorded this transaction as follows. Equipment 115.000 Common Stock 135,000 (d) During the year, the company sold certain equipment for $285.000, recognizing again of 569,000. Because the controller believed that new equipment would be needed in the near future, she decided to defer the gain and amortire it over the life of any new equipment purchased tabstract SCAN Concepts for Analysis 69 An order for 561.500 has been received from a custom 2018. The company made the following entry in 2017 Accounts Receivable for products on hund. This order was shipped on January