The following are unrelated accounting practices:

1. Vine Company purchased a new $18 snow shovel that is expected to last six years. The shovel is

used to clear the ?rms front steps during the winter months. The shovels cost is recorded on the

companys balance sheet as an asset.

2. Filene Corporation has been named as the defendant in a $40 million pollution lawsuit. Because

the lawsuit will take several years to resolve and the outcome is uncertain, Filenes management

decides not to mention the lawsuit in the current year ?nancial statements.

Required:

For each of the given practices, indicate which accounting concepts, principles, or constraints apply

and whether they have been applied appropriately. For each inappropriate accounting practice, indicate

the proper accounting procedure.