Business entity concept and cost concept

Assignment Help Operation Management

Reference no: EM132270728

Part 1

Please consider the scenario below and let us know if you believe Lauren Smith's actions to be ethical. Please let us know why or why not.

Lauren Smith is the controller for Sports Central, a chain of sporting goods stores. She has been asked to recommend a site for a new store. Lauren has an uncle who owns a shopping plaza in the area of town where the new store is to be located, so she decides to contact her uncle about leasing space in his plaza. Lauren also contacted several other shopping plazas and malls, but her uncle’s store turned out to be the most economical place to lease. Therefore, Lauren recommended locating the new store in her uncle’s shopping plaza. In making her recommendation to management, she did not disclose that her uncle owns the shopping plaza.

Part 2

Business Entity and Cost Concept Considerations: Please read the two scenarios below and provide your answers based on the Generally Accepted Accounting Principles (GAAP) of the Business Entity Concept and the Cost Concept. Please use the information from these concepts to support your responses.

Sally Vertrees purchased a personal computer for use at home. Sally owns a dental practice. She occasionally uses the computer for a task related to her dental practice; however, the computer is used primarily by Sally’s children. Can the computer be recorded as an asset in the accounting records of Sally’s dental office? Why or why not?

Jason Thompson purchased an office building 10 years ago for $780,000. The building was just appraised at $1.25 million. What value should be used for the building in Jason’s accounting records? Please support your answer.

Responses to Classmates:

Reference no: EM132270728

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