A Number of Unrelated Transactions Recorded by Provincial Company Are

question 58

Essay

A number of unrelated transactions recorded by Provincial Company are as follows:
1. At the end of the month, the obsolete inventory was valued at $17,000. No entry was made.
2. Provincial, which owns an art gallery, purchases a valuable painting for $40,000 in November, and sells it in January, which is after the company's year end. The entry made when the painting is purchased is:
3. Equipment was purchased for $8,000 from a store that is going out of business. The equipment was appraised at $10,000. Instructions
For each of the above situations, identify the accounting assumption, concept, constraint or recognition criteria that have been violated. Prepare the correct journal entry as it should have been made. If no entry should have been made, or if additional financial statement disclosure is required, explain.

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Definitions:

Demand

The amount of a product or service that buyers are ready and able to buy at different price points over a specified duration.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to buy at a given price within a specified period.

Percentage Change

The extent of difference, expressed as a percentage, that represents how much a value has increased or decreased from its original amount.

Agricultural Output

The total quantity of agricultural products, such as crops and livestock, produced in a given period.