Business Entity and Cost Concept Considerations: Please read the two scenarios below and provide your answers based on the Generally Accepted Accounting Principles (GAAP) of the Business Entity Concept and the Cost Concept. Please use the information from these concepts to support your responses.
Sally Vertrees purchased a personal computer for use at home. Sally owns a dental practice. She occasionally uses the computer for a task related to her dental practice; however, the computer is used primarily by Sally’s children. Can the computer be recorded as an asset in the accounting records of Sally’s dental office? Why or why not?
Jason Thompson purchased an office building 10 years ago for $780,000. The building was just appraised at $1.25 million. What value should be used for the building in Jason’s accounting records? Please support your answer.
