Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Point 1: T. Young, controller for Retail Industries, was reviewing production cost reports for the year. One amount in these reports continued to bother him - advertising. During the year, the company had instituted an expensive advertising campaign to sell some of its slower-moving products. It was still too early to tell whether the advertising campaign was successful. There had been much internal debate as how to report advertising cost. The vice president of finance argued that advertising costs should be reported as a cost of production, just like direct materials and direct labor. He therefore recommended that this cost be identified as manufacturing overhead and reported as part of inventory costs until sold. Others disagreed. T. Young believed that this cost should be reported as an expense of the current period, so as not to overstate net income. Others argued that it should be reported as prepaid advertising and reported as a current asset. The president finally had to decide the issue. He argued that these costs should be reported as inventory. His arguments were practical ones. He noted that the company was experiencing financial difficulty and expensing this amount in the current period might jeopardize a planned bond offering. Also, by reporting the advertising costs as inventory rather than as prepaid advertising, less attention would be directed to it by the financial community.
Instructions:
Question a. Who are the stakeholders in this situation?
Question b. What are the ethical issues involved in this situation?
Question c. What would you do if you were T. Young?
Which of the following costs should be recorded as an expense, and why? Which of the following costs should not be recorded as an expense, and why?
Your hospital has been approached by a major HMO to perform all their MSDRG 505 cases (foot surgeries). They have offered a flat payment of $8,000 per case. You have reviewed your charges for MSDRG 505 during the last year and found the following pro..
Demonstrate the present value of $10,000 received at the start of every year for 20 years if the interest rate is J1 = 12% p.a. at the end of 10 years
Implementing a new AIS system could prove to be beneficial or detrimental to an organization’s IT infrastructure. Assess the risks associated with integrating a new AIS system and suggest what management can do to minimize those risks.
Assume that you have the following cash flows at the following times: 0: -$100 1: $0 2: $100 3: $200 What is the Annual Equivalent (A) of this series of Cash Flows for time periods (0, 1, 2, 3) i=10%.
A company issues $10,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2014. Interest is paid on June 30 and December 31. The proceeds from the bonds are $9,802,072. Using effective-interest amortization, how much interest expense will be recogn..
Statutory tax rate for the year and Effective tax rate expected to be applicable for the second quarter of the year
Longoria Company purchased merchandise inventory on account with a list price of $5,000 and credit terms of 1/10, n/30. What was the net or cash cost for the merchandise?
in 2016, Acme Corporation reports negative taxable income of $350,000 including a net operating loss (NOL) carryforward rom 2015 of $70,000. What is Acme NOL for 2016?
Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. Prepare the journal entry dated May 31 to transfer the ..
The context is a home mortgage. Payments are monthly, the first to be made 1 month hence. The loan agreement recites a 7% mortgage payable over 20 years. What would be entered for i if the payment were not monthly
Cash surrender value of a life insurance contract P50,000, investment in securities, short-term P100,000, and long term P100,000 Where should I add the cash surrender value
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd