Reference no: EM132683852

A company paid $2,000,000 for covid19 masks for merchandise inventory in September. By December 31 they had sold most of it. The remaining goods had a cost of $400,000 and selling price of $600,000. The Boss said "When we bought the goods we knew we would sell them for $3,000,000. The value is is higher when you sell one at a time than when you buy 2,000 at a time. We need to record the the real value of these goods since we know how much we can sell them for.

Problem 1: Record the gain already made by buying at the low price. They made this journal entry Debit Inventory 200,000 Credit Gain on market value 200,000 Identify a feature of a quality, element or foundational principle from the conceptual framework that the company is violating. First identify the item violated. Then state what it says that you think is violated. Then explain specifically why you think this definition is violated in this case. (only your first answer will be marked.