Accounting and Business

Accounting
Name
Institutional Affiliation
Part 1
The Generally Accepted Accounting Principles (GAAP) have set aside various ethical requirements that need to be observed by all businesses. The ethical standards are meant to ensure that business transactions are conducted in a manner that is acceptable by the community. In the case under consideration, Lauren Smith has been charged with the responsibility of getting a new site for a store. This includes ensuring that the new site can offer the needed benefits to the business. Lauren chooses to contact her uncle since he owns a plaza. Such actions prove that Lauren offered preferential treatment to her kin which distorted the site selection process. Such actions are termed as unethical since the selection process ought to have been fair.
Lauren also acted in a dishonest manner since she failed to disclose the relationship between her and the owner of the chosen site. The fact that she was conducting the selection process single-handedly may have given her the latitude to distort the process. Disclosing the relationship would give the business a chance to evaluate whether the chosen location was viable in the long run (Kuzminskyi & Voronova, 2014). Lauren lacked the needed honesty which would have led her to ensure the selection process was conducted openly. The close relationship between her and the owner of the plaza should have disqualified the site and allowed other viable options to be considered.
Part 2
Sally Vertrees runs a sole proprietorship and has been using her personal computer for business operations.

However, the computer is used to a large extent by her children. The computer can be classified as a mixed-use asset since it is used to fulfill personal and business needs (Kuzminskyi & Voronova, 2014). The computer can be recorded as a business asset up to a level where the activities conducted on the computer affect the business operations. Sally needs to come up with a split percentage which will represent the usage for business operations and personal usage. This will help determine the amount to be recorded as an asset.
In the case under consideration, Jason Thompson acquired the building at $780,000 which is the historical cost. The value of the building has been appraised at $1.25 million, and the change would need to be recorded since it has a material effect on the financial statements (Kuzminskyi & Voronova, 2014). The revaluation of the asset will be recorded after taking into account the accumulated depreciation over time. Jason needs to determine the salvage value of the building at the time of appraisal. The building will be recorded at the revalued amount since it represents the market value of the asset.
References
Kuzminskyi, I. A., & Voronova, M. O. (2014). UPDATING THE ACCOUNTING PRINCIPLES BASED ON THE STRATEGIC CONCEPT OF BUSINESS MANAGEMENT. Practical Science Edition “Independent Auditor”, 1(7), 15-19.