E $1-11$ Basic assumptions and principles LO$1-8,$ LO$1-9$

Identify the accounting concept that was violated in each of the following situations.

$1.$ Pastel Paint Company purchased land two years ago for a price of $\backslash (\backslash$$ $250,000\backslash ).$ Because the value of the land has appreciated to $\backslash (\backslash$$ $400,000\backslash ),$ the company has valued the land at $\backslash (\backslash$$ $400,000\backslash )$ in its most recent balance sheet.

$2.$ Atwell Corporation has not prepared financial statements for external users for over three years.

$3.$ The Klingon Company sells farm machinery. Revenue from a large order of machinery from a new buyer was recorded the day the order was received.

$4.$ Don Smith is the sole owner of a company called Hardware City. The company recently paid a $\backslash (\backslash$$ $150\backslash )$ utility bill for Smith's personal residence and recorded a $\backslash (\backslash$$ $150\backslash )$ expense.

$5.$ Golden Book Company purchased a large printing machine for $\backslash (\backslash$$ $1,000,000\backslash )($a material amount$)$ and recorded the purchase as an expense.

$6.$ Ace Appliance Company is involved in a major lawsuit involving injuries sustained by some of its employees in the manufacturing plant. The company is being sued for $\backslash (\backslash$$ $2,000,000\backslash ),$ a material amount, and is not insured. The suit was not disclosed in the most recent financial statements because no settlement had been reached.