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Rosman Co. had three major business transactions during 2012.
(a) Reported at its fair value of $260,000 merchandise inventory with a cost of $208,000.
(b) The president of Rosman Co., Jay Rosman, purchased a truck for personal use and charged it to his expense account.
(c) Rosman Co. wanted to make its 2012 income look better, so it added 2 more weeks to the year (a 54-week year). Previous years were 52 weeks.
Instructions
In each situation, identify the assumption or principle that has been violated, if any, and discuss what the company should have done.
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