Accounting Principles: The accounting principles refer to the set of rules and guidelines that shall be followed in order to prepare the accounts of an entity. Few of the accounting principles are matching principle, cost principle and full disclosure principle. To Explain: The historical cost principle.

Question

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Answer 1

Question

Chapter 10, Problem 1Q

To determine

Accounting Principles: The accounting principles refer to the set of rules and guidelines that shall be followed in order to prepare the accounts of an entity. Few of the accounting principles are matching principle, cost principle and full disclosure principle.

To Explain: The historical cost principle.

Expert Solution & Answer

Answer to Problem 1Q

The historical cost principle is the concept in accounting which states that the assets should be recorded at the value at which they were purchased.

Explanation of Solution

In the given case, Mr. S is uncertain about the applicability of historical cost concept. He owns the plant assets for which this principle needs to be followed.
Therefore, he needs to know that the plant shall be recorded in the books of accounts at the price at which it was purchased.
Historical cost concept needs to be followed by every business organization to represent a true and fair value of its assets.

Conclusion

Thus, as per historical cost principle, assets are recorded at purchase price.

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Prather Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 50,000 Total fixed manufacturing overhead cost $ 285,000 Variable manufacturing overhead per direct labor-hour $ 3.80 Recently, Job P513 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 20 Direct materials $ 710 Direct labor cost $ 500 The estimated total manufacturing overhead is closest to: A) 285,004 B) 190,000 C) 475,000 D) 285,000

Answer 2

Question

Chapter 10, Problem 1Q

To determine

Accounting Principles: The accounting principles refer to the set of rules and guidelines that shall be followed in order to prepare the accounts of an entity. Few of the accounting principles are matching principle, cost principle and full disclosure principle.

To Explain: The historical cost principle.

Expert Solution & Answer

Answer to Problem 1Q

The historical cost principle is the concept in accounting which states that the assets should be recorded at the value at which they were purchased.

Explanation of Solution

In the given case, Mr. S is uncertain about the applicability of historical cost concept. He owns the plant assets for which this principle needs to be followed.
Therefore, he needs to know that the plant shall be recorded in the books of accounts at the price at which it was purchased.
Historical cost concept needs to be followed by every business organization to represent a true and fair value of its assets.

Conclusion

Thus, as per historical cost principle, assets are recorded at purchase price.

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Answer 3

Question

Chapter 10, Problem 1Q

To determine

Accounting Principles: The accounting principles refer to the set of rules and guidelines that shall be followed in order to prepare the accounts of an entity. Few of the accounting principles are matching principle, cost principle and full disclosure principle.

To Explain: The historical cost principle.

Expert Solution & Answer

Answer to Problem 1Q

The historical cost principle is the concept in accounting which states that the assets should be recorded at the value at which they were purchased.

Explanation of Solution

In the given case, Mr. S is uncertain about the applicability of historical cost concept. He owns the plant assets for which this principle needs to be followed.
Therefore, he needs to know that the plant shall be recorded in the books of accounts at the price at which it was purchased.
Historical cost concept needs to be followed by every business organization to represent a true and fair value of its assets.

Conclusion

Thus, as per historical cost principle, assets are recorded at purchase price.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 10, Problem 1Q

To determine

Accounting Principles: The accounting principles refer to the set of rules and guidelines that shall be followed in order to prepare the accounts of an entity. Few of the accounting principles are matching principle, cost principle and full disclosure principle.

To Explain: The historical cost principle.

Expert Solution & Answer

Answer to Problem 1Q

The historical cost principle is the concept in accounting which states that the assets should be recorded at the value at which they were purchased.

Explanation of Solution

In the given case, Mr. S is uncertain about the applicability of historical cost concept. He owns the plant assets for which this principle needs to be followed.
Therefore, he needs to know that the plant shall be recorded in the books of accounts at the price at which it was purchased.
Historical cost concept needs to be followed by every business organization to represent a true and fair value of its assets.

Conclusion

Thus, as per historical cost principle, assets are recorded at purchase price.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 10, Problem 1Q

To determine

Accounting Principles: The accounting principles refer to the set of rules and guidelines that shall be followed in order to prepare the accounts of an entity. Few of the accounting principles are matching principle, cost principle and full disclosure principle.

To Explain: The historical cost principle.

Expert Solution & Answer

Answer to Problem 1Q

The historical cost principle is the concept in accounting which states that the assets should be recorded at the value at which they were purchased.

Explanation of Solution

In the given case, Mr. S is uncertain about the applicability of historical cost concept. He owns the plant assets for which this principle needs to be followed.
Therefore, he needs to know that the plant shall be recorded in the books of accounts at the price at which it was purchased.
Historical cost concept needs to be followed by every business organization to represent a true and fair value of its assets.

Conclusion

Thus, as per historical cost principle, assets are recorded at purchase price.

Answer 6

Chapter 10, Problem 1Q

To determine

Accounting Principles: The accounting principles refer to the set of rules and guidelines that shall be followed in order to prepare the accounts of an entity. Few of the accounting principles are matching principle, cost principle and full disclosure principle.

To Explain: The historical cost principle.

Expert Solution & Answer

Answer to Problem 1Q

The historical cost principle is the concept in accounting which states that the assets should be recorded at the value at which they were purchased.

Explanation of Solution

In the given case, Mr. S is uncertain about the applicability of historical cost concept. He owns the plant assets for which this principle needs to be followed.
Therefore, he needs to know that the plant shall be recorded in the books of accounts at the price at which it was purchased.
Historical cost concept needs to be followed by every business organization to represent a true and fair value of its assets.

Conclusion

Thus, as per historical cost principle, assets are recorded at purchase price.

Answer 7

Chapter 10, Problem 1Q

To determine

Accounting Principles: The accounting principles refer to the set of rules and guidelines that shall be followed in order to prepare the accounts of an entity. Few of the accounting principles are matching principle, cost principle and full disclosure principle.

To Explain: The historical cost principle.

Answer 8

Expert Solution & Answer

Answer to Problem 1Q

The historical cost principle is the concept in accounting which states that the assets should be recorded at the value at which they were purchased.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

In the given case, Mr. S is uncertain about the applicability of historical cost concept. He owns the plant assets for which this principle needs to be followed.
Therefore, he needs to know that the plant shall be recorded in the books of accounts at the price at which it was purchased.
Historical cost concept needs to be followed by every business organization to represent a true and fair value of its assets.