Ethics case-uncollectible accounts

Assignment Help Business Management

Reference no: EM1324647

You have recently been hired as the assistant controller for Stanton Industries. Your immediate supervisor is the controller, who in turn, reports to the vice president of finance. The controller has assigned you the task of preparing the year-end adjustments. For receivables, you have prepared an aging of accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates as appropriate balance for Allowance for Uncollectible Accounts is $180,000. The existing balance in the allowance account prior to any adjustments is a $20,000 credit balance. After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new aging category. This will change the required allowance for the uncollectible accounts from $180,000 to $135,000. Tactfully, you ask the controller for an explanation for the change and he tells you, "We need the extra income; the bottom line is too low."

What is the effect on income before taxes of the change requested by the controller? Ethically, what are my options and responsibilities along with the possible consequences of any action I take?

Reference no: EM1324647

Questions Cloud

Concept regarding cognitive science : Break down the perceptual organizational process

Positive emotions on memory and stressful : The difference between positive emotions on memory and stressful or fearful emotions on memory

Explain e-business project : Explain E-business project and Prepare a report about marks and Spencer's e-business strategy

Knowledge of ethics-impact on being ethical : How do you explain the fact that morally evil people can be highly educated in terms of ethics and religion? In other words, how do you account for the gap that sometimes occurs between knowledge of ethics and being an ethical person?

Ethics case-uncollectible accounts : You have recently been hired as the assistant controller for Stanton Industries. Your immediate supervisor is the controller, who in turn, reports to the vice president of finance.

Explain 7-step and branding processes : Explain 7-Step and Branding Processes and Consider the seven-step process to assess market opportunity

Role of encoding and retrieval in memory process : Describe the concepts of working memory, short-term memory, and long-term memory.

Importance of ethic programs and employee training : What is the significance of ethic programs and employee training? Why is it significant to implement an ethics program in the workplace?

Explain powerpoint gives users the ability to emphasize : Explain PowerPoint gives users the ability to emphasize the points on a list with either numbers or bullets. Is it best to use bullets or numbers when presenting a list on a PowerPoint slide

User Account

All Pages