For each situation, list the assumption, principle, or constraint that has been violated, if any. List only one answer for each situation. a. East Lake Company recognizes revenue at the end of the production cycle but before sale. The price of the product, as well as the amount that can be sold, is not certain. choose one of the assumption, principle or constraint Going concern assumptionPeriodicity assumptionNo violationHistorical cost principleRevenue recognition principleEconomic entity assumption b. Hilo Company is in its fifth year of operation and has yet to issue financial statements. (Do not use the full disclosure principle.) choose one of the assumption, principle or constraint Historical cost principleGoing concern assumptionRevenue recognition principleNo violationPeriodicity assumptionEconomic entity assumption c. Gomez, Inc. is carrying inventory at its original cost of $100,000. Inventory has a fair value of $110,000. choose one of the assumption, principle or constraint Economic entity assumptionHistorical cost principleRevenue recognition principleNo violationPeriodicity assumptionGoing concern assumption d. Bly Hospital Supply Corporation reports only current assets and current liabilities on its balance sheet. Equipment and bonds payable are reported as current assets and current liabilities, respectively. Liquidation of the company is unlikely. choose one of the assumption, principle or constraint Economic entity assumptionRevenue recognition principlePeriodicity assumptionNo violationHistorical cost principleGoing concern assumption e. Chieu Company has inventory on hand that cost $400,000. Chieu reports inventory on its balance sheet at its current fair value of $425,000. choose one of the assumption, principle or constraint Periodicity assumptionEconomic entity assumptionGoing concern assumptionHistorical cost principleNo violationRevenue recognition principle f. Toxy Syles, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds and debited the “Computers” account. choose one of the assumption, principle or constraint No violationHistorical cost principleGoing concern assumptionPeriodicity assumptionRevenue recognition principleEconomic entity assumption going concern assumption, periodicity assumption, no violation, historical cost principle, revenue recognition principle, economic entity assumption are the choices for these questions.

For each situation, list the assumption, principle, or constraint that has been violated, if any. List only one answer for each situation. a. East Lake Company recognizes revenue at the end of the production cycle but before sale. The price of the product, as well as the amount that can be sold, is not certain. choose one of the assumption, principle or constraint Going concern assumptionPeriodicity assumptionNo violationHistorical cost principleRevenue recognition principleEconomic entity assumption b. Hilo Company is in its fifth year of operation and has yet to issue financial statements. (Do not use the full disclosure principle.) choose one of the assumption, principle or constraint Historical cost principleGoing concern assumptionRevenue recognition principleNo violationPeriodicity assumptionEconomic entity assumption c. Gomez, Inc. is carrying inventory at its original cost of $100,000. Inventory has a fair value of $110,000. choose one of the assumption, principle or constraint Economic entity assumptionHistorical cost principleRevenue recognition principleNo violationPeriodicity assumptionGoing concern assumption d. Bly Hospital Supply Corporation reports only current assets and current liabilities on its balance sheet. Equipment and bonds payable are reported as current assets and current liabilities, respectively. Liquidation of the company is unlikely. choose one of the assumption, principle or constraint Economic entity assumptionRevenue recognition principlePeriodicity assumptionNo violationHistorical cost principleGoing concern assumption e. Chieu Company has inventory on hand that cost $400,000. Chieu reports inventory on its balance sheet at its current fair value of $425,000. choose one of the assumption, principle or constraint Periodicity assumptionEconomic entity assumptionGoing concern assumptionHistorical cost principleNo violationRevenue recognition principle f. Toxy Syles, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds and debited the “Computers” account. choose one of the assumption, principle or constraint No violationHistorical cost principleGoing concern assumptionPeriodicity assumptionRevenue recognition principleEconomic entity assumption going concern assumption, periodicity assumption, no violation, historical cost principle, revenue recognition principle, economic entity assumption are the choices for these questions.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 4CMA: Morrisons Plastics Division, a profit center, sells its products to external customers as well as to...

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For each situation, list the assumption, principle, or constraint that has been violated, if any. List only one answer for each situation.

a.	East Lake Company recognizes revenue at the end of the production cycle but before sale. The price of the product, as well as the amount that can be sold, is not certain.	choose one of the assumption, principle or constraint Going concern assumptionPeriodicity assumptionNo violationHistorical cost principleRevenue recognition principleEconomic entity assumption
b.	Hilo Company is in its fifth year of operation and has yet to issue financial statements. (Do not use the full disclosure principle.)	choose one of the assumption, principle or constraint Historical cost principleGoing concern assumptionRevenue recognition principleNo violationPeriodicity assumptionEconomic entity assumption
c.	Gomez, Inc. is carrying inventory at its original cost of $100,000. Inventory has a fair value of $110,000.	choose one of the assumption, principle or constraint Economic entity assumptionHistorical cost principleRevenue recognition principleNo violationPeriodicity assumptionGoing concern assumption
d.	Bly Hospital Supply Corporation reports only current assets and current liabilities on its balance sheet. Equipment and bonds payable are reported as current assets and current liabilities, respectively. Liquidation of the company is unlikely.	choose one of the assumption, principle or constraint Economic entity assumptionRevenue recognition principlePeriodicity assumptionNo violationHistorical cost principleGoing concern assumption
e.	Chieu Company has inventory on hand that cost $400,000. Chieu reports inventory on its balance sheet at its current fair value of $425,000.	choose one of the assumption, principle or constraint Periodicity assumptionEconomic entity assumptionGoing concern assumptionHistorical cost principleNo violationRevenue recognition principle
f.	Toxy Syles, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds and debited the “Computers” account.	choose one of the assumption, principle or constraint No violationHistorical cost principleGoing concern assumptionPeriodicity assumptionRevenue recognition principleEconomic entity assumption

going concern assumption, periodicity assumption, no violation, historical cost principle, revenue recognition principle, economic entity assumption are the choices for these questions.

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