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Unformatted text preview: more net income. 4. Artemis purchased equipment at a fire sale for $90,000. The equipment was worth $130,000. Venus believes that the following entry should be made. Equipment 130,000 Cash 90,000 Gain on Purchase of Equipment 40,000 5. Venus suggests that Artemis should carry equipment on the balance sheet at its liquidation value, which is $100,000 less than its cost. 6. Artemis rented office space for 1 year starting October 1, 2008. The total amount of $120,000 was paid in advance. Venus believes that the following entry should be made on October 1. Rent Expense 120,000 Cash 120,000 Latona Disagrees with Venus on each of the situations above. Instructions For each transaction, indicate why Latona disagrees. Identify the accounting principle or assumption that Venus would be violating if her suggestions were used. Prepare the correct Journal entry for each transaction, if any....
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This note was uploaded on 11/07/2010 for the course BBA 1023 taught by Professor Dkwidkdksiw during the Spring '10 term at City University of Hong Kong.
- Spring '10
- Financial Accounting