Eugene ables ran an excavation company. he borrowed $500,000 from the highland park state bank. ables signed a note promising to repay the money and an agreement given highland bank a security interest in all of his equipment, including after-acquired equipment. several years later, ables agreed with patricia myers to purchase a bantam backhoe from her for $16,000, which he would repay at the rate of $100 per month, while he used the machine. ables later defaulted on his note to highland and the bank attempted to take the backhoe. myers and ables contended that the bank had no right to take the backhoe? was the backhoe covered by highland’s security interest? did ables have sufficient rights in the backhoe for the bank’s security interest to attach? who wins and why?

For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the basic assumption, component, or accounting principle that is applied (if you agree) or violated (if you disagree).wagner corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar.spooner oil company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. no mention of the change was included in the financial statements. the change had a material effect on spooner's financial statements.cypress manufacturing company purchased machinery having a five-year life. the cost of the machinery is being expensed over the life of the machinery.rudeen corporation purchased equipment for $180,000 at a liquidation sale of a competitor. because the equipment was worth $230,000, rudeen valued the equipment in its subsequent balance sheet at $230,000.davis bicycle company received a large order for the sale of 1,000 bicycles at $100 each. the customer paid davis the entire amount of $100,000 on march 15. however, davis did not record any revenue until april 17, the date the bicycles were delivered to the customer.gigantic corporation purchased two small calculators at a cost of $32.00. the cost of the calculators was expensed even though they had a three-year estimated useful life.esquire company provides financial statements to external users every three years.