[Keith008]

(a) Hansell Company recognizes revenue at the end of the production cycle but before the sale. The price of the product, as well as the amount that can be sold, is not certain.


(b) Falk Company is in its fifth year of operation and has yet to issue financial statements. (Do not use the full disclosure principle.)


(c) Tavarez, Inc. Is carrying inventory at its current fair value of $100,000. Inventory had an original cost of $110,000.



(d) Forgetta Hospital Supply Corporation reports only current assets and current liabilities on its balance sheet. Property, plant, and equipment and bonds payable are reported as current assets and current liabilities, respectively. Liquidation of the company is unlikely.


(e) Kile Company has inventory on hand that cost $400,000. Kile reports inventory on its balance sheet at its current fair value of $425,000.



(f) Kim Farris, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds and debited the "Computers" account.




Answers:
Periodicity assumption No violation Materiality constraint Economic entity assumption Going concern assumption Cost principle Revenue recognition principle Expense recognition principle Monetary unit assumption Full disclosure principle

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