EXERCISE $2\mathrm{.}4$

Accounting Principles and Asset Valuation

The following cases relate to the valuation of assets. Consider each case independently.

a$.$ World$-$Wide Travel Agency has office supplies costing $$1,400$ on hand at the balance

sheet date. These supplies were purchased from a supplier that does not give cash refunds. World$-$Wide's management believes that the company could sell these supplies for no more than $$500$ if it were to advertise them for sale. However, the company expects to use these supplies and to purchase more when they are gone. In its balance sheet, the supplies were presented at $$500.$

b$.$ Perez Corporation purchased land in $1957$ for $$40,000.$ In the current year, it purchased a similar parcel of land for $$300,000.$ In its current year balance sheet, the company presented these two parcels of land at a combined amount of $$340,000.$

c$.$ At December $30,$ year $1,$ Felix, Inc., purchased a computer system from a mail$-$order supplier for $$14,000.$ The retail value of the system$-$according to the mail$-$order supplier$-$was $$20,000.$ On January $7,$ however, the system was stolen during a burglary. In its December $31,$ year $1,$ balance sheet, Felix showed this computer system at $$14,000$ and made no reference to its retail value or to the burglary. The December balance sheet was issued in February year $2.$

In each case, indicate the appropriate balance sheet amount of the asset under generally accepted accounting principles. If the amount assigned by the company is incorrect, briefly explain the accounting principles that have been violated. If the amount is correct, identify the accounting principles that justify this amount.

a b $,$and c$,$ please! Thank you