Blake furniture recently purchased new equipment for its plant. The list price of the equipment was $40,000. Company paid sales taxes of $2,100 at the date of purchase. Freight charges for the equipment totaled $680. Installation and training costs related to the equipment amounted to $900. During installation, one of the pieces of equipment was accidentally damaged It cost $400 to repair this damage. Blake furniture will depreciate this equipment by straight-line method with half-year convention over an estimated useful life of 3 years assuming a $3,000 scrap value. a. The only accurate way to account for the success or failure of an entity is to accumulate all transactions from the opening of business until the business eventually liquidates. Comment and explain whether this is true or not. Moreover, how do you think the concept of consistency aid in the analysis of financial statements? What type of accounting disclosure is required if this concept is not applied?
Blake furniture recently purchased new equipment for its plant. The list price of the equipment was $40,000. Company paid sales taxes of $2,100 at the date of purchase. Freight charges for the
equipment totaled $680. Installation and training costs related to the equipment amounted to $900. During installation, one of the pieces of equipment was accidentally damaged It cost $400 to repair this damage. Blake furniture will
a. The only accurate way to account for the success or failure of an entity is to accumulate all
transactions from the opening of business until the business eventually liquidates. Comment and
explain whether this is true or not. Moreover, how do you think the concept of consistency aid
in the analysis of financial statements? What type of accounting disclosure is required if this
concept is not applied?
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