User Account

All Pages

Name two financial statement users in this scenario

Assignment Help Accounting Basics
Reference no: EM133107277

Question - Susan Fields is the controller of Sunset Travels, a publicly traded company. The assets of the company currently total $1,400,000 and total debt is at 3,000,000. The company is required to maintain a debt to asset ratio of not more than 50% for their bank covenant. They are currently being sued for damages of $150,000 by a customer who was injured while on an excursion he purchased from Sunset travels. Sunset Travel lawyers have told Susan that it is likely they will have to pay the damages from the lawsuit, but will not know the exact amount until they go to court.

Susan is trying to decide whether to include the lawsuit in the financial statements. Jeff Gold, the new CEO, is insisting that the lawsuit does not need to be included in the financial statements since they have not had their court date yet.

Required -

(a) Name two financial statement users in this scenario and the financial reporting objective for each user.

(b) Why did the CEO insist on excluding the lawsuit from the financial statements?

(c) Does the CEO's request pose an ethical dilemma for the controller? If so, why?

Reference no: EM133107277

Questions Cloud

What is the net benefit from implementing armed guards : Last year $500,000 worth of inventory was lost to thieves who broke in through windows and doors. What is the net benefit from implementing armed guards
Expectation of a compensation package : Everyone of us have their own expectation of a compensation package. Please create your own desired compensation package explaining reasons for every component.
What types of problems can arise in the data clean process : What types of problems can arise in the data clean process?
Explain the learning theories and instructional design : a. List at least 3-4 things an HRM must consider when using instructional design for to train personnel within an organization?
Name two financial statement users in this scenario : Name two financial statement users in this scenario and the financial reporting objective for each user
What body system are directly impacted by diaper dermatitis : What body system (s) are directly impacted by Diaper Dermatitis and how are those systems affected?
American conservative and American liberal views : Differences between the American conservative and American liberal views of human nature? How do these views shape policy preferences
Case-salesforce com inc : Salesforce.com, Inc. is a successful, for-profit, American cloud computing company based in San Francisco, California.
What is a mandatory subject of bargaining : What is a mandatory subject of bargaining? Can a union waive its right to bargain over a mandatory subject of bargaining?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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