Question

02. Identify the accounting assumption that best applies to each of the following situations a. KFC, the restaurant chain, sold a store location to Burger King. How can KFC determine the sale price of the store: by a professional appraisal, KFC's cost, or the amount actually received from the sale? b. If Trans. Realtors had to liquidate its assets, their value would be less than carrying amounts of the assets. c. Toyota Canada wants to determine which division of the company-Toyota or Lexus-is more profitable d. You get an especially good buy on a laptop, paying only $399 for a computer that normally costs $799. What is your accounting value for this computer?

Answer 1

price of the store should be done ans? @ Histoscal - cost assumption - The assomption that best applies to this situation is Historical Cost' which states that asseth are recorded at purchase price. the determination of the sale is stable follocting this assumption. 6. Stable monetary unit assumptions It is applied to this situation which stat es that value of a corrency Over given period of time. Entity assemption of seperate entity asumption is best applica to this situat in which states that a buisness is a seperate unit while determining the profitability of Toyota & lexos, these derising should be treated ag seperate economic units economsc .

L @ tris topical -cost assum Lion! while determining the accounting value for the computer Historie cost assumption is best suitcel, according to which of the computer must be at purchase porce the value recorded