Question

The accountant for Boatsman Products Inc. received the following information:
a. Boatsman sent its customers a new price list. Prices were increased an average of 3 percent on all items.
b. Boatsman accepted an offer of $150,000 for land that it had purchased two years ago for $130,000. Cash and the deed for the property are to be exchanged in five days.
c. Boatsman accepted $150,000 cash and gave the purchaser the deed for the property described in item b.
d. Boatsman’s president purchased 600 shares of the firm’s common stock from another stockholder. The president paid $15 per share. The former shareholder had purchased the stock from Boatsman for $4 per share.
e. Boatsman leases its delivery trucks from a local dealer. The dealer also performs maintenance on the trucks for Boatsman. Boatsman received a $1,254 bill for maintenance from the dealer.
Required:
1. Indicate whether or not each item qualifies as a transaction and should be recorded in the accounting system. Explain your reasoning.
2. Conceptual Connection: What accounting concept is illustrated by item d?


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  • CreatedSeptember 22, 2015
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