E2-8b (full disclosure principle) presented below are a number of

E2-8B (Full Disclosure Principle) Presented below are a number of facts related to Baez, Inc. Assume that no mention of these facts was made in the financial statements and the related notes.


Assume that you are the auditor of Baez, Inc. and that you have been asked to explain the appropriate accounting and related disclosure necessary for each of these items.

(a) During the year, an assistant controller for the company embezzled $15,000. Baez’s net income for the year was $2,300,000. Neither the assistant controller nor the money has been found.

(b) Baez has reported its ending inventory at $2,100,000 in the financial statements. No other information related to inventories is presented in the financial statements and related notes.

(c) The company changed its method of depreciating equipment from the double-declining balance to the straight-line method. No mention of this change was made in the financial statements.

(d) Equipment purchases of $170,000 were partly financed during the year through the issuance of a $110,000 note payable. The company offset the equipment against the note payable and reported plant assets at $60,000.

(e) The company decided that, for the sake of conciseness, only net income should be reported on the


income statement. Details as to revenues, cost of goods sold, and expenses were omitted.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more