The following cases relate to the valuation of assets. Consider each case independently. WorldWide 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. h. 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. Spencer Software Company has assets of $1,020,000 and liabilities of $552,000. a. Prepare the owners' equity section of the company's balance sheet under each of the following independent assumptions: 1. The business is organized as a sole proprietorship, owned by Johanna Spencer. 2. The business is organized as a partnership, owned by Johanna Spencer and Mikki Yato. Spencer's equity amounts to $288.000. 3. The business is a corporation with 27 stockholders, each of whom originally invested $12,000 in exchange for shares of the company's capital stock. The remainder of the stockholders' equity has resulted from profitable operation of the business. b. Assume that you are a loan officer at Security Bank. Spencer Software Company has applied to your bank for a large loan to finance the development of new products. Does it matter to you whether Spencer is organized as a sole proprietorship, a partnership, or a corporation? Explain