Issued stock for $6 cash (example). purchased equipment costing $6,320, paying $4,893 in cash and charging the rest on account. paid $513 in principal and $91 in interest expense on long-term debt. earned $88,988 in sales revenue; collected $87,949 in cash with the customers owing the rest on account. incurred $10,766 in shipping expenses, all on credit. paid $28,241 cash on accounts owed to suppliers. incurred $4,332 in marketing expenses; paid cash. collected $620 in cash from customers paying on account. borrowed $6,359 in cash as long-term debt. used inventory costing $62,752 when sold to customers. paid $177 in income tax recorded as an expense in the prior year.

For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the basic assumption, component, or accounting principle that is applied (if you agree) or violated (if you disagree).wagner corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar.spooner oil company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. no mention of the change was included in the financial statements. the change had a material effect on spooner's financial statements.cypress manufacturing company purchased machinery having a five-year life. the cost of the machinery is being expensed over the life of the machinery.rudeen corporation purchased equipment for $180,000 at a liquidation sale of a competitor. because the equipment was worth $230,000, rudeen valued the equipment in its subsequent balance sheet at $230,000.davis bicycle company received a large order for the sale of 1,000 bicycles at $100 each. the customer paid davis the entire amount of $100,000 on march 15. however, davis did not record any revenue until april 17, the date the bicycles were delivered to the customer.gigantic corporation purchased two small calculators at a cost of $32.00. the cost of the calculators was expensed even though they had a three-year estimated useful life.esquire company provides financial statements to external users every three years.