Explain the way in which the house and mortgage should be classified in the financial statements of Company H.

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Answer 1

Question

Chapter C, Problem 1DQ

To determine

Explain the way in which the house and mortgage should be classified in the financial statements of Company H.

Expert Solution & Answer

Explanation of Solution

Sole proprietorship: The form of business entity which is owned and managed by an individual is referred to as sole proprietorship.

Neither the house nor the mortgage will appear in the financial statements of Company H. The house is a personal asset of Person H, and not an asset used in the business.
Likewise, the mortgage is a personal liability, not a debt incurred by the business entity. The business entity principle requires that a business entity is regarded as separate from the other affairs of its owner(s).

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Sarasota Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below. Item Item D E Item F Item Item Item I G H Estimated selling $ 130 $119 $103 $ 97 $ 119 $ 97 price Cost 81 86 86 86 54 39 Cost to complete 32 32 27 38 32 32 Selling costs 11 19 11 22 11 22 Using the LCNRV rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2017, for each of the inventory items above. Item D $_ Item E SASS $_ Item F $ Item G $_ Item H $_ Item I $

Given correct option general accounting

Answer 2

Question

Chapter C, Problem 1DQ

To determine

Explain the way in which the house and mortgage should be classified in the financial statements of Company H.

Expert Solution & Answer

Explanation of Solution

Sole proprietorship: The form of business entity which is owned and managed by an individual is referred to as sole proprietorship.

Neither the house nor the mortgage will appear in the financial statements of Company H. The house is a personal asset of Person H, and not an asset used in the business.
Likewise, the mortgage is a personal liability, not a debt incurred by the business entity. The business entity principle requires that a business entity is regarded as separate from the other affairs of its owner(s).

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Answer 3

Question

Chapter C, Problem 1DQ

To determine

Explain the way in which the house and mortgage should be classified in the financial statements of Company H.

Expert Solution & Answer

Explanation of Solution

Sole proprietorship: The form of business entity which is owned and managed by an individual is referred to as sole proprietorship.

Neither the house nor the mortgage will appear in the financial statements of Company H. The house is a personal asset of Person H, and not an asset used in the business.
Likewise, the mortgage is a personal liability, not a debt incurred by the business entity. The business entity principle requires that a business entity is regarded as separate from the other affairs of its owner(s).

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Answer 4

Question

Chapter C, Problem 1DQ

To determine

Explain the way in which the house and mortgage should be classified in the financial statements of Company H.

Expert Solution & Answer

Explanation of Solution

Sole proprietorship: The form of business entity which is owned and managed by an individual is referred to as sole proprietorship.

Neither the house nor the mortgage will appear in the financial statements of Company H. The house is a personal asset of Person H, and not an asset used in the business.
Likewise, the mortgage is a personal liability, not a debt incurred by the business entity. The business entity principle requires that a business entity is regarded as separate from the other affairs of its owner(s).

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

Answer 5

Chapter C, Problem 1DQ

To determine

Explain the way in which the house and mortgage should be classified in the financial statements of Company H.

Expert Solution & Answer

Explanation of Solution

Sole proprietorship: The form of business entity which is owned and managed by an individual is referred to as sole proprietorship.

Neither the house nor the mortgage will appear in the financial statements of Company H. The house is a personal asset of Person H, and not an asset used in the business.
Likewise, the mortgage is a personal liability, not a debt incurred by the business entity. The business entity principle requires that a business entity is regarded as separate from the other affairs of its owner(s).

Answer 6

Chapter C, Problem 1DQ

To determine

Explain the way in which the house and mortgage should be classified in the financial statements of Company H.

Expert Solution & Answer

Explanation of Solution

Sole proprietorship: The form of business entity which is owned and managed by an individual is referred to as sole proprietorship.

Neither the house nor the mortgage will appear in the financial statements of Company H. The house is a personal asset of Person H, and not an asset used in the business.
Likewise, the mortgage is a personal liability, not a debt incurred by the business entity. The business entity principle requires that a business entity is regarded as separate from the other affairs of its owner(s).

Answer 7

Chapter C, Problem 1DQ

To determine

Explain the way in which the house and mortgage should be classified in the financial statements of Company H.

Answer 8

Expert Solution & Answer

Explanation of Solution

Sole proprietorship: The form of business entity which is owned and managed by an individual is referred to as sole proprietorship.

Neither the house nor the mortgage will appear in the financial statements of Company H. The house is a personal asset of Person H, and not an asset used in the business.
Likewise, the mortgage is a personal liability, not a debt incurred by the business entity. The business entity principle requires that a business entity is regarded as separate from the other affairs of its owner(s).