Identify the accounting concept that was violated in each of the following situations.

1. astro turf company recognizes an expense, cost of goods sold, in the period the product is manufactured.
2. mccloud drug company owns a patent that it purchased three years ago for $2 million.
3. the controller recently revalued the patent to its approximate market value of $8 million.
4. philips company pays the monthly mortgage on the home of its president, larry crosswhite, and charges the expenditure to miscellaneous expense.

Garrett is an executive vice president at samm hardware. he researches a proposal by a larger company, maximum hardware, to combine the two companies. by analyzing past performance, conducting focus groups, and interviewing maximum employees, garrett concludes that maximum has poor profit margins, sells shoddy merchandise, and treats customers poorly. what actions should garrett and samm hardware take? a. turn down the acquisition offer and prepare to resist a hostile takeover. b. attempt a friendly merger and use managerial hubris to improve results at maximum. c. welcome the acquisition and use knowledge transfer to impart sam hardware's management practices. d. do nothing; the two companies cannot combine without samm hardware's explicit consent.