For each of the following situations, state whether you agree or disagree with the financial reporting practiceemployed, and briefly explain the reason for your answer.1. The controller of the Dumars Corporation increased the carrying value of land from its original cost of$2 million to its recently appraised value of $3.5 million.2. The president of Vosburgh Industries asked the company controller to charge miscellaneous expense for thepurchase of an automobile to be used solely for personal use.3. At the end of its 2018 fiscal year, Dower, Inc., received an order from a customer for $45,350. The merchandise will ship early in 2019. Because the sale was made to a long-time customer, the controller recorded thesale in 2018.4. At the beginning of its 2018 fiscal year, Rossi Imports paid $48,000 for a two-year lease on warehouse space.Rossi recorded the expenditure as an asset to be expensed equally over the two-year period of the lease.

For each of the following situations, state whether you agree or disagree with the financial reporting practiceemployed, and briefly explain the reason for your answer.1. The controller of the Dumars Corporation increased the carrying value of land from its original cost of$2 million to its recently appraised value of $3.5 million.2. The president of Vosburgh Industries asked the company controller to charge miscellaneous expense for thepurchase of an automobile to be used solely for personal use.3. At the end of its 2018 fiscal year, Dower, Inc., received an order from a customer for $45,350. The merchandise will ship early in 2019. Because the sale was made to a long-time customer, the controller recorded thesale in 2018.4. At the beginning of its 2018 fiscal year, Rossi Imports paid $48,000 for a two-year lease on warehouse space.Rossi recorded the expenditure as an asset to be expensed equally over the two-year period of the lease.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 55P

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