Each of the following statements represents a decision made by the accountant of Growth Industries:
- A tornado destroyed $200,000 in uninsured inventory. This loss is included in the cost of goods sold.
- Land was purchased ten years ago for $50,000. The accountant adjusts the land account to $100,000, which is the estimated current value.
- The cost of machinery and equipment is charged to a fixed asset account. The machinery and equipment will be expensed over the period of use.
- The value of equipment increased this year, so no depreciation of equipment was recorded this year.
- During the year, inventory that cost $5,000 was stolen by employees. This loss has been included in the cost of goods sold for the financial statements. The total amount of the cost of goods sold was $1,000,000.
- The president of the company, who owns the business, used company funds to buy a car for personal use. The car was recorded on the company’s books.
Required .State whether you agree or disagree with each decision.