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Identify the Assumption Represented in Each Scenario, and Then Decide

Question 182

Essay

Identify the assumption represented in each scenario, and then decide if it is satisfied or violated.
 Scenario  Assumption  Satisfied or violated?  Extensive Products  Corporation is a publicly  traded company. They only  ssue financial statements to  external users every other  year.  Creative Merchandise Inc.  adds the cost of land  purchased in 2014 to the  balance of land purchased in  2000.  Gary Corp pays the CEO’s  mortgage and records it as  miscellaneous expense.  Tackson & Company  depreciates property, plant,  and equipment over their  useful lives. \begin{array} { | l | l | l | } \hline \text { Scenario } & \text { Assumption } & \text { Satisfied or violated? } \\\hline \text { Extensive Products } & & \\\text { Corporation is a publicly } & & \\\text { traded company. They only } & & \\\text { ssue financial statements to } & & \\\text { external users every other } & & \\\text { year. } & & \\\hline \text { Creative Merchandise Inc. } & & \\\text { adds the cost of land } & & \\\text { purchased in 2014 to the } & & \\\text { balance of land purchased in } & & \\\text { 2000. } & & \\\hline \text { Gary Corp pays the CEO's } & & \\\text { mortgage and records it as } & & \\\text { miscellaneous expense. } & & \\\hline \text { Tackson \& Company } & & \\\text { depreciates property, plant, } & & \\\text { and equipment over their } & & \\\hline \text { useful lives. } & & \\\hline\end{array}

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