Question

5. Gab&Run, Inc., a fast food company, sells franchises for $100,000, accepting a $5,000 down payment and a 50-year note for the remainder. Grab & Run promises for 3 years to assist in site selection, building, and management training. Grab&Run records the $100,000 franchise fee as revenue in the period in which the contract is signed. 6. Curtis Conway Company "faces possible expropriation (i.e., takeover) of foreign facilities and possible losses on sums owed by various customers on the verge of bankruptcy." The company president has decided that these possibilities should not be noted on the financial statements because Conway still hopes that these events will not take place. Mike Singletary, manager of College Bookstore, Inc, bought a computer for his own use. He paid for the computer by writing a check on the bookstore checking account and charged the "Office Equipment" account 7. Curtis Enis, Inc. recently completed a new 60-story office building that houses their home offices and many other tenants. All the office equipment for the building that had a per item or per unit cost of $1,000 or less was expensed as immaterial, even though the office equipment has an 8.

Answer 1