Below are three transactions recorded by Ace Builders Ltd during the current year. For each transaction, determine which component of the conceptual framework (i.e. qualitative characteristics, element or foundational principle) was violated (if any) and briefly explain why. If there was a violation, give the entry that should have been originally recorded (narratives are not required). If no entry should have been recorded, write no entry required. (4 marks each).

1. Ace Builders needed a small structure for temporary storage. A contractor quoted a price of $769,000. The company decided to build the structure itself. The cost was $542,000, and construction required three months. The following entry was made:

Buildings-warehouse 769,000

Cash 542,000

Revenue from self-construction 227,000

Required:

i. Components of the conceptual framework violated and briefly explain nature of violation (if any): ______________________________________________

______________________________________________________________

ii. Give the original entry to properly record the transaction, if any: