Exercise 4 Identify the appropriate accounting assumption, principle or concept: a. We have bought one store that was located in our neighborhood. At what amount do we record the purchase in our accounting records? b. We have bought inventory for our store for AED 10,000. We got 5 pallets of that inventory. Do we write 5 pallets in our accounting records, or AED 10,000? c. Our company has 2 divisions. One in Chicago and one in Los Angeles. We were comparing both. d. We have determined that the economy hit us badly. We must declare bankruptcy. Exercise 5 Use the following items to construct: a) Income Statement; b) Statement of Retained Earnings; and c) Balance Sheet in an excel sheet Revenue 30,000 Accounts Payable 12,000 Accounts Receivable 35,000 Salary Expense 10.000 Cash 30,000 Common Stock 40,000 Interest Expense 2,000 Notes Payable 8.000 Retained Earnings Beg. 2,000 Equipment 15,000