ABC Company Had the Following Transactions During the Year

question 39

Essay

ABC Company had the following transactions during the year:
A) ABC Company delayed issuing its financial statements because the accountant was on vacation.
B) ABC Company determined that land that they purchased several years ago for $100,000 had a current fair market value of $140,000. To make the financial statements look better, they increased the carrying value of the land to $140,000.
C) The president of ABC Company borrowed $30,000 from the bank to remodel his yacht. ABC put the loan on their books.
D) ABC Company was involved in an very complex accounting transaction that they did not want the bank to know about. They decided to make the description of the transaction extremely complex so that no one would realize what the transaction was about.
E) ABC believes that the purchasing price of the dollar has changed significantly over the last several years and therefore adjusted the financial statements to reflect current year price levels.
F) ABC recently purchased a building that was listed by the realtor for a price of $275,000. ABC paid $250,000 for the building and recorded it on their books for $250,000.
G) ABC Company is in excellent financial health and has no plans to go out of business. However, management decided that they did not need to depreciate the cost of their assets to business operations over the assets' economic lives.

• A) ABC Company delayed issuing its financial statements because the accountant was on vacation.
• B) ABC Company determined that land that they purchased several years ago for $100,000 had a current fair market value of $140,000. To make the financial statements look better, they increased the carrying value of the land to $140,000.
• C) The president of ABC Company borrowed $30,000 from the bank to remodel his yacht. ABC put the loan on their books.
• D) ABC Company was involved in an very complex accounting transaction that they did not want the bank to know about. They decided to make the description of the transaction extremely complex so that no one would realize what the transaction was about.
• E) ABC believes that the purchasing price of the dollar has changed significantly over the last several years and therefore adjusted the financial statements to reflect current year price levels.
• F) ABC recently purchased a building that was listed by the realtor for a price of $275,000. ABC paid $250,000 for the building and recorded it on their books for $250,000.
• G) ABC Company is in excellent financial health and has no plans to go out of business. However, management decided that they did not need to depreciate the cost of their assets to business operations over the assets' economic lives.