Business Decision Case 5-1 [Note; An acceptable answer to the first one is provided as an example below.] 1. Accumulated depreciation has nothing to do with cash. It is a contra-asset account. Cash is...

1. Accumulated depreciation is just a contra asset account, it is maintained to show the assets at its original cost and accumulating the depreciation, a non- cash item, rather deduction from the cost of the assets. So it is nothing to do with cash and cannot be used to pay for the purchase of furniture.
2. The act of the company is not right as the revenue shall be recognized as per generally acceptable accounting principle (GAAP), which says revenue will be recognized in the period that transaction has occurred and the ownership has been transferred. Hence keeping the books for 2018 to record the transaction occurred in 2019 is wrong and misleading to the users of financial statement.
3. As per GAAP for property plant and equipment any upward revaluation of the assets shall be recorded to revaluation reserve account hence the appraised value $10,000 shall be shown under revaluation reserve instead to paid capital. (Refer Indas 16)
4. The list price is nothing to do with books of account. The purchase shall be recognized net of the discount given by the supplier on list price or the actual cost to the company.
5. In FOB contracts the ownership is transferred to the buyer when the goods reached to the departure port. In the given situation since the material has been shipped by the supplier the transaction is eligible to be recorded in the books and accordingly it should come under purchase and correspondingly in inventory. Since the goods have not...