Reference no: EM132631133

Here are some accounting reporting situations:

(a) Tercek Ltd recognises 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.

(b) Bonilla Co. Ltd is in its fifth year of operation and has yet to issue financial statements. (Do not use the full disclosure principle.)

(c) Barton Ltd is carrying inventory at its current market value of $100 000. Inventory had an original cost of $110 000.

(d) Hospital Supply Co. Ltd reports only current assets and current liabilities on its statement of financial position. Property, plant and equipment and bills payable are reported as current assets and current liabilities, respectively. Property, plant and equipment is stated at the amount for which it could be sold at short notice. Liquidation of the entity is unlikely.

(e) Watts Ltd has inventory on hand that cost $400 000. Watts reports inventory on its statement of financial position at its current market value of $425 000.

(f) Steph Wolfson, manager of Classic Music Ltd, bought a computer for her personal use. She paid for the computer with company funds and debited the 'computers' account.

Required

Problem 1: For each situation, give the concept, principle, recognition criteria or constraint that has been violated, if any. Some of these concepts, principles and constraints were presented in the previous chapter. Give only one answer for each situation.