Discuss mendez corporations growth rate

Assignment Help Accounting Basics
Reference no: EM131795461

ETHICS CASE

As its year-end approaches, it appears that Mendez Corporation's net income will increase 10% this year. The president of Mendez Corporation, nervous that the stockholders might expect the company to sustain this 10% growth rate in net income in future years, suggests that the controller increase the allowance

for doubtful accounts to 4% of receivables in order to lower this year's net income. The president thinks that the lower net income, which reflects a 6% growth rate, will be a more sustainable rate of growth for Mendez Corporation in future years. The controller of Mendez Corporation believes that the company's yearly allowance for doubtful accounts should be 2% of receivables.

Instructions

(a) Who are the stakeholders in this case?

(b) Does the president's request pose an ethical dilemma for the controller?

(c) Should the controller be concerned with Mendez Corporation's growth rate in estimating the allowance? Explain your answer.

-This writing assignment must be 500 words

Reference no: EM131795461

Questions Cloud

Study of consumer process : The study of consumer process is based on two important perspectives. Explain these two perspectives.
Calculate the gross profit rate for each fiscal year : Sales declined in fiscal 2008. Does that mean that profitability, as measured by the gross profit rate, necessarily also declined
Crisis and issues management : What are the differences in a communication used in print media, electronic media, employee relations, government relations and international relations?
The big five personality measures : Which of the following is not one of the Big Five personality measures?
Discuss mendez corporations growth rate : Should the controller be concerned with Mendez Corporation's growth rate in estimating the allowance. Explain your answer
Ethical standards in public relations : What is the importance of keeping ethical standards in public relations?
What is the change in the value of a bond : A corporate bond was quoted yesterday at 102.16 while today's quote is 102.19. What is the change in the value of a bond that has a face value of $5,000?
What is the weighted-average interest rate : Arlington Company is constructing a building. What is the weighted-average interest rate used for interest capitalization purposes
Contrast two separate businesses : Compare and contrast two separate businesses and offer your opinion on which company you would prefer to shop at due to the returns policy.

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is the target net income

A company requires $1,020,000 in sales to meet its net income target. Its contribution margin is 30%, and fixed costs are $180,000. What is the target net income?

  How many dollars does washington corporation

How many dollars does Washington Corporation currently sell of the product each year

  During 2010 a company spent 239000 in research and

during 2010 a company spent 239000 in research and development costs that resulted in a new product introduced to the

  Albright company allocates the estimated 270000 of its

albright company allocates the estimated 270000 of its accounting department costs to its production and sales

  Expenses and non-controlling interest

An enterprise that holds a variable interest in variable interest entity is required to consolidate assets, liabilities, revenues and expenses, and the non-controlling interest of that entity if:

  Jasper company has 30000 shares of 80 par value 5

jasper company has 30000 shares of 80 par value 5 cumulative preferred stock and 140000 shares of 20 par value common

  Discuss what is meant by the concept of responsibility

discuss what is meant by the concept of responsibility accounting and the three basic types of responsibility centers

  Determine the annual equivalent

Your company is looking at purchasing a loader at a cost of $125,000. The loader would have a useful life of seven years.

  Determine ending inventory using dollar value lifo

Determine ending inventory using dollar-value LIFO. Assume that the December 2, 2011, purchase cost is the current cost of inventory.

  Evaluate the npv for project

An owner decides that he wants to go ahead with manufacturing; he must spend $900,000 for the new equipment-Calculate the NPV for this project. Should it be undertaken?

  Compute the variable overhead variance

Compute the fixed overhead variance. (Indicate the effect of variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input the amount as positive value. Do not round your intermediate calculati..

  Describe the basic activities conducted by a tax agency fund

Describe the basic activities conducted by a tax agency fund. What are some of the issues that make tax agency fund accounting complex

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd