Question

LOS Exercise 1-11 Statement Ace Corporasion has been in basiness for many February EXAMPLE 1-6 235,800. The following information is available for the first tw $83.000 89.000 96000 82,000 5,000 Expenses Dividends paid Required Ppare a sanement of retesined carnings for the month ended February 28, 2017. Los Exercise 1-12 Accounting Principles and Assumptions discussed in the chapter ing basic accounting principles and assumptions were di Exerci The follow Classify which it Economic entity Monetary unit Cost principle Going concern Time period Fill in each of the blanks with the accounting principle or assumption situation described. that is relevant to the I. Genesis Corporation is now in its 30th year of business. The founder of the company is planning to retire at the end of the year and turn the business over to his daughter 2. Nordic Company purchased a 20-acre parcel of MU property on which to build a new factory. The company recorded the property on the records at the amount of cash given to acquire it. Exerc State Followi 3. Jim Bailey enters into an agreement to operate a new law firm in partnership with a friend. Each partner will make an initial cash investment of $10,000. Jim opens a checking account in the name of the partnership and transfers $10,000 from his personal account into the new account. find the retaine

Answer 1

Exercise 1.12 Sub Question (1)

The relevant accounting principle/assumption is Going Concern. The going concern principle is that entity will continue operating for a period of time that is sufficient to carry out its commitments and obligations.

Exercise 1.12 Sub Question (2)

The relevant accounting principle/assumption is Cost Principle. The Cost principle is that the entity record a transaction at its purchase/acquired cost in its records.

Exercise 1.12 Sub Question (3)

The relevant accounting principle/assumption is Economic Entity. Economic Entity principle is that entity should be kept separate from the recorded activities of its owner.

Exercise 1.12 Sub Question (4)

The relevant accounting principle/assumption is Monetary Unit. Monetary Unit principle is that value of the unit of currency in which the record transactions remains relatively stable over time.

Exercise 1.12 Sub Question (5)

The relevant accounting principle/assumption is Time Period. Time Period is that entity should report the financial results of its activities over a standard time period,