Homework Help is Here – Start Your Trial Now!
Business
Accounting
In each of the situations above, identify the concept that has been violated, if any. If a journal entry is incorrect, give the correct entry.

In each of the situations above, identify the concept that has been violated, if any. If a journal entry is incorrect, give the correct entry.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

please dont provide answer in image format thank you

Identify violation of conceptual framework and correct entries. 1. Merchandise inventory worth $50,000 is acquired at a cost of $42,000 from a company going out of business. The following entry is made: Merchandise Inventory 50,000 Cash 42,000 8,000 Cost of Goods Sold 2. The president of Ellis Company, Evan Ellis, purchases a computer for personal use and charges it to his expense account. The following entry is made: Office Expense 1,000 Cash 1,000 3. Merchandise inventory with a cost of $280,000 is reported at its fair value of $255,000. The following entry is made: Cost of Goods Sold 25,000 Merchandise Inventory 25,000 4. A coffee machine costing $50 is being depreciated over five years. The following adjusting entry is made: Depreciation Expense 10 Accumulated Depreciation Equipment 10 5. East Air sells an airline ticket for $650 in February for a trip scheduled in April. (Assume the earnings approach is used.) The following entry is made: Cash 650 Se Instructions 650 In each of the situations above, identify the concept that has been violated, if any. If a journal entry is incorrect, give the correct entry.
Transcribed Image Text:Identify violation of conceptual framework and correct entries. 1. Merchandise inventory worth $50,000 is acquired at a cost of $42,000 from a company going out of business. The following entry is made: Merchandise Inventory 50,000 Cash 42,000 8,000 Cost of Goods Sold 2. The president of Ellis Company, Evan Ellis, purchases a computer for personal use and charges it to his expense account. The following entry is made: Office Expense 1,000 Cash 1,000 3. Merchandise inventory with a cost of $280,000 is reported at its fair value of $255,000. The following entry is made: Cost of Goods Sold 25,000 Merchandise Inventory 25,000 4. A coffee machine costing $50 is being depreciated over five years. The following adjusting entry is made: Depreciation Expense 10 Accumulated Depreciation Equipment 10 5. East Air sells an airline ticket for $650 in February for a trip scheduled in April. (Assume the earnings approach is used.) The following entry is made: Cash 650 Se Instructions 650 In each of the situations above, identify the concept that has been violated, if any. If a journal entry is incorrect, give the correct entry.
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Double entry bookkeeping system
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS