Explain how Jaffa Corporation violated (if it did) the principle of full disclosure in each of the following items.
a. There was no statement or explanation as to why the corporation switched from FIFO to LIFO inventory at the start of the current reporting period. A significant switching difference was involved.
b. There were just two equity amounts reported: $150,000 for capital stock and $130,000 for retained earnings. The capital stock has a par value of $100,000 and was initially sold for $150,000 in cash.
c. Although sales revenue was $960,000 and the cost of goods sold was $600,000, the first item shown on the income statement was revenues, which were $360,000.
d. There were no earnings per share (EPS) figures provided.
e. Current assets were $314,000 and current liabilities were $205,000; the balance
sheet recorded working capital as a single amount, $109,000.
f. The income statement simply listed the following three categories: Gross
revenues, Costs, and Net profit
Explain how Jaffa Corporation violated (if it did) the principle of full disclosure in each of the following items. a. There was no statement or explanation as to why the corporation switched from FIFO to LIFO inventory at the start of the current reporting period. A significant switching difference was involved. b. There were just two equity amounts reported: $150,000 for capital stock and $130,000 for retained earnings. The capital stock has a par value of $100,000 and was initially sold for $150,000 in cash. c. Although sales revenue was $960,000 and the cost of goods sold was $600,000, the first item shown on the income statement was revenues, which were $360,000. d. There were no earnings per share (EPS) figures provided. e. Current assets were $314,000 and current liabilities were $205,000; the balance sheet recorded working capital as a single amount, $109,000. f. The income statement simply listed the following three categories: Gross revenues, Costs, and Net profit
