Demonstrate familiarity with relevant facts and sources

Reference no: EM131853700

Question: Your client, Do the Chop Broadcasting, just purchased property for its station headquarters alongside the Blue Ridge Parkway in North Georgia. The location is at an altitude high enough for uninterrupted signal, and close enough to BraveNation communities in both Georgia and North Carolina, where there are high concentrations of fans. Their listenership is largely a result of the quality signal these mountain communities can receive due to locale.

Your client paid a high price for the property-$1 million above the fair market value of the assets acquired. The president of Do the Chop Broadcasting has made it clear that the reason he agreed to pay this price is for the access to potential markets in both states without landscape interference. Accordingly, he has asked for an account entitled "Airwaves" be set up in the balance sheet and valued at $1 million.

As Do the Chop's CPA, you know you will have to take a position on this issue. Should your firm allow the client to account for the $1 million in the way he suggests? If not, what is your firm's position on how the transaction should be accounted? Write a recommendation to your boss, detailing the position your firm should take with this client, and why

A successful recommendation will:

Demonstrate familiarity with relevant facts and sources

Identify a defendable solution and support it through logical reasoning and established guidelines

Take into account differing views and address potential objections accordingly

Consider ethical factors

Be tactful with respect to the potential client

Use and cite sources correctly

Be error free and concise

Reference no: EM131853700

Questions Cloud

What is the required rate of return on stock : The historical return on equity (ROE) of 15 percent is expected to continue in the future. What is the required rate of return on the stock?

Explain why the given metrics are most applicable : Class: Organizational Design ORG/581 Explain how Walmart current structure is used in their strategy. Select three metrics that are most applicable.

Discuss the non-payment risks involved : Your company has decided to export to an Indian distributor. A major concern you have is getting paid by this distributor. You have asked the distributor.

What is the annual operating cash flow for this project : Andover Engineering is evaluating a project that will increase sales by $2,780,000 and costs by $1,634,000. What is the annual operating cash flow for project?

Demonstrate familiarity with relevant facts and sources : As Do the Chop's CPA, you know you will have to take a position on this issue. Should your firm allow the client to account for the $1 million in the way.

Additional accounts payable substantive testing is required : Your conclusion is that the internal controls over purchasing is weak and additional accounts payable substantive testing is required.

What type of data might regional sales manager need to track : Class: Before we can think about ways to analyze data, sometimes we need to think about the data for a given role. What types of data might a regional Sales.

Bonds is the most interest rate sensitive : Which one of the following bonds is the most interest rate sensitive? The high-yield bond is more likely to have a higher default risk.

Who benefits from the importation of tomatoes grown : When the North American Free Trade Agreement (NAFTA) went into effect in December 1992 and tariffs on imported tomatoes were dropped U.S. tomato producers.

User Account

All Pages