QUESTION 4 (10 marks) For each of the following transactions, state the accounting principle/concept that has been applied or violated and provide an explanation. (a) Johnson owns three independent firms that trade computer accessories, magazines and groceries. As Johnson is only interested in the overall performance of his investment instead of the performance of individual firms, he just keeps one single set of books to record all the transactions of the three firms. (5 marks) Name of Principle/Concept. Indicate whether the Principle/Concept has been APPLIED or VIOLATED. (iii) Explanation. (b) Victory Co. has just bought a hammer costing $50 which can be used for 10 years. The accountant puts the whole cost of the hammer to the Income Statement as sundry expense in this year. (5 marks) 6) Name of Principle/Concept. Indicate whether the Principle/Concept has been APPLIED or VIOLATED. (iii) Explanation