E2-11HO (Assumptions, Pdescribed E2-111 10 guidelines used by accountants are (Assumptions, 0 Principles, and Constraints) A number of operational treasurer of Doug Flutie Co. wishes to prepare financial statements when drindownturns in their wine production, which ocur periodically the rhubarb crop fails. He states that it is at such times that the statements could be most easily prepared. In no event would more than months pass without statements being prepared. 2.The Chicago Power & Light Company has purchased a large amount of property, plant, and equipment over a number of years. They have decided that because the general price level has changed materially over the years, they will issue only price-level adjusted financial statements. Robert Smith Manufacturing Co. decided to manufacture its own widgets because it would be cheaper to do so than to buy them from an outside supplier. In an attempt to make their statements more comparable with those of their competitors, Robert Smith charged its inventory account for what they felt the widgets would have cost if they had been purchased from an outside supplier. (Do not use the revenue recognition principle.) 3. 4. gan's Discount Centers buys its merchandise by the truck and train- Flana carload. Flanagan does not defer any transportation costs in computing the cost of its ending inventory. Such costs, although varying from period to period, are always material in amount. Gab&Run, Inc., a fast food company, sells franchises for $100,000, accepting a $5,000 down payment and a 50-year note for the remainder. Grab & Run promises for 3 years to assist in site selection, building, and management training. Grab & Run records the $100,000 franchise fee as revenue in the period in which the contract is signed. 5. Curtis Conway Company "faces possible expropriation (ie, takeover) of foreign facilities and possible losses on sums owed by various customers 6, on the verge of bankruptcy." The company president has decided that these possibilities should not be noted on the financial statements because Conway still hopes that these events will not take place. Mike Singletary, manager of College Bookstore, Inc, bought a computer for his own use. He paid for the computer by writing a check on the bookstore checking account and charged the "Office Equipment" account. 7. Curtis Enis, Inc. recently completed a new 60-story office building that houses their home offices and many other tenants. All the office equipment for the building that had a per item or per unit cost of $1,000 or less was expensed as immaterial, even though the office equipment has an 8. E2-11HO (Assumptions, Pdescribed E2-111 10 guidelines used by accountants are (Assumptions, 0 Principles, and Constraints) A number of operational treasurer of Doug Flutie Co. wishes to prepare financial statements when drindownturns in their wine production, which ocur periodically the rhubarb crop fails. He states that it is at such times that the statements could be most easily prepared. In no event would more than months pass without statements being prepared. 2.The Chicago Power & Light Company has purchased a large amount of property, plant, and equipment over a number of years. They have decided that because the general price level has changed materially over the years, they will issue only price-level adjusted financial statements. Robert Smith Manufacturing Co. decided to manufacture its own widgets because it would be cheaper to do so than to buy them from an outside supplier. In an attempt to make their statements more comparable with those of their competitors, Robert Smith charged its inventory account for what they felt the widgets would have cost if they had been purchased from an outside supplier. (Do not use the revenue recognition principle.) 3. 4. gan's Discount Centers buys its merchandise by the truck and train- Flana carload. Flanagan does not defer any transportation costs in computing the cost of its ending inventory. Such costs, although varying from period to period, are always material in amount. Gab&Run, Inc., a fast food company, sells franchises for $100,000, accepting a $5,000 down payment and a 50-year note for the remainder. Grab & Run promises for 3 years to assist in site selection, building, and management training. Grab & Run records the $100,000 franchise fee as revenue in the period in which the contract is signed. 5. Curtis Conway Company "faces possible expropriation (ie, takeover) of foreign facilities and possible losses on sums owed by various customers 6, on the verge of bankruptcy." The company president has decided that these possibilities should not be noted on the financial statements because Conway still hopes that these events will not take place. Mike Singletary, manager of College Bookstore, Inc, bought a computer for his own use. He paid for the computer by writing a check on the bookstore checking account and charged the "Office Equipment" account. 7. Curtis Enis, Inc. recently completed a new 60-story office building that houses their home offices and many other tenants. All the office equipment for the building that had a per item or per unit cost of $1,000 or less was expensed as immaterial, even though the office equipment has an 8