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Question 1 of 3 - CHAPTER 1 - END OF CHAPTER ASSIGNMENT

The document summarizes 4 independent accounting situations and asks the reader to determine if the accounting treatment for each situation is correct or incorrect. Situation 1 involves recording the estimated value of a company's employees on its balance sheet. Situation 2 involves reporting land and buildings at their current market value rather than cost. Situation 3 involves an owner using company funds to purchase a personal guitar and increasing the equipment account. Situation 4 involves a small oil company choosing to use ASPE accounting standards over IFRS to reduce accounting expenses after shareholder approval.

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168 views1 page

Question 1 of 3 - CHAPTER 1 - END OF CHAPTER ASSIGNMENT

The document summarizes 4 independent accounting situations and asks the reader to determine if the accounting treatment for each situation is correct or incorrect. Situation 1 involves recording the estimated value of a company's employees on its balance sheet. Situation 2 involves reporting land and buildings at their current market value rather than cost. Situation 3 involves an owner using company funds to purchase a personal guitar and increasing the equipment account. Situation 4 involves a small oil company choosing to use ASPE accounting standards over IFRS to reduce accounting expenses after shareholder approval.

Uploaded by

Marina Buey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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1/11/23, 16:30 Question 1 of 3 - CHAPTER 1- END OF CHAPTER ASSIGNMENT

CHAPTER 1- END OF CHAPTER ASSIGNMENT

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Four independent situations follow:

(a)

For each of the below situations, determine if the accounting treatment of the situation is
correct or incorrect.

1. Human Solutions Incorporated believes its people are its most significant
asset. It estimates and records their value on its balance sheet.

2. Sharon Barton, president and owner of Barton Industries, has instructed


the accountant to report the company's land and buildings at its current
value of $500,000 instead of its cost of $350,000. "Reporting the land and
buildings at $500,000 will make it easier to get a loan from the bank next
month," Sharon states.

3. Will Viceira, owner of the Music To You Company, bought an electric guitar
for his personal use. He paid for the guitar with company funds and
increased the Equipment account.

4. West Spirit Oil Corp. is a very small oil and gas company that is listed on
the Toronto Stock Exchange. The president asked each of the shareholders
to approve using ASPE instead of IFRS to reduce expenses for accounting
services. He received unanimous approval and has advised the company
accountant to prepare the 2024 financial statements accordingly.

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