As the assistant controller for S Industries you are and are responsible for preparing the year-end...
As the assistant controller for S Industries you are and are responsible for preparing the year-end adjusting entry to estimate uncollectible accounts receivable. The company uses the Allowance Method. For the current year, you have used the historical percentage of 20% of total year-end accounts receivable as a reasonable estimate of amounts that won’t be collected. The controller is concerned about reporting a lower profit for the current year. The controller tells the assistant controller to lower the percentage to 10% this year which would lower the expense resulting in a higher net income. What should you do?
Multiple Choice
-
Keep the percentage 20% since this is the most accurate and reasonable estimate for the company’s future uncollectible accounts receivable.
-
Changing the percentage does not violate an ethical consideration.
-
Lower the percentage to 10% to avoid questions from the company’s investors.
-
Lower the percentage to 10% to make sure the controller gives you a good review and raise this year.
Homework Answers
The most appropriate action is as follows:
Keep the percentage 20% since this is the most accurate and reasonable estimate for the company’s future uncollectible accounts receivable.
Explanation:
Changing the percentage and not presenting a true and fair view of the financial statements is unethical.
Add Answer to:
As the assistant controller for S Industries you are and are
responsible for preparing the year-end...
AP5-5 Ethics You have recently been hired as the assistant controller for Stanton Industries. Your immediate...
AP5-5 Ethics You have recently been hired as the assistant controller for Stanton Industries. Your immediate superior 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 categones. The analysis indicates that an appropriate balance for Allowance for Uncollectible Accounts is $180,000....
As assistant controller for a small consulting firm, you are responsible for recording and posting the...
As assistant controller for a small consulting firm, you are responsible for recording and posting the daily cash receipts and disbursements to the ledger accounts. After you have posted the entries, your boss, the controller, prepares a trial balance and the financial statements. You make the following entries on June 30, 2010: 2010 June 30 Cash 1,430 Accounts Receivable 1,950 Service Revenue 3,380 To record daily cash receipts. June 30 Advertising Expense 12,500 Utilities Expense 22,600 Rent Expense 24,000 Salary...
Discuss the ethical dilemma you face in the given scenario. Consider your options and responsibilities along...
Discuss the ethical dilemma you face in the given scenario. Consider your options and responsibilities along with the possible consequences of any action you might take. Who are the parties affected? What factors should you consider in making your decision? Scenario - You have recently been hired as the assistant controller for Stanton Industries. Your immediate superior is the controller who, in turn, reports to the vice president of finance. The controller has assigned you the task of preparing the...
You are the Controller at Gander, Inc. and are responsible for preparing and analyzing the balance...
You are the Controller at Gander, Inc. and are responsible for
preparing and analyzing the balance sheet for December 31, 2018,
the end of the company’s fiscal year. Gander Inc. had the following
balance sheet balances at December 31, 2017:
During 2018, the following occurred:
Customer sales on account $400,000.
Received payments from customers in cash $380,000.
Purchased merchandise on credit $220,000.
Paid cash to vendors $230,000.
Costs related to merchandise sold $170,000.
Operating expenses were paid in cash $80,000....
3. At the end of the current year, ARS Industries has the following account balances before...
3. At the end of the current year, ARS Industries has the following account balances before making an adjusting entry for uncollectible accounts (10 points): Accounts Receivable has a balance $1,300,000; Allowance for Doubtful Accounts $ 7,000 Credit sales for this year $8,500,000 A. If the company uses the percent of sales method and estimates that ½ of 1% of credit sales for the year will be uncollectible, then a. Determine the bad debt expense for the period, and journalize...
accounting ethics
You have recently been hired as the assistant controller for Stanton Industries. Your immediate superior 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 that an appropriate balance for Allowance for Uncollectible Accounts is $180,000. The existing balance...
end of the current year, ARS Industries has the following account balances before making an adjusting entry for uncollec...
end of the current year, ARS Industries has the following account balances before making an adjusting entry for uncollectible accounts Accounts Receivable has a balance $1,300,000; Allowance for Doubtful Accounts $ 7,000 Credit sales for this year $8,500,000 A. If the company uses the percent of sales method and estimates that ½ of 1% of credit sales for the year will be uncollectible, then a. Determine the bad debt expense for the period, and journalize the adjusting entries. (2 points)...
Sky-High, Inc. pays company management bonuses at the end of each year if net income is...
Sky-High, Inc. pays company management bonuses at the end of each year if net income is equal to or greater than a specific percentage of net sales. However, in the past five years, that metric has not been reached. During these past five years, Sky-High has been lowering the requirements for granting credit to customers so that more sales can be generated. However, making those credit changes has caused the company’s uncollectible accounts percentage to rise substantially; for last year,...
the year, a company has the following accounts receivable and estimates of 2. At the end...
the year, a company has the following accounts receivable and estimates of 2. At the end of the year, a company has the follow uncollectible accounts: s not yet due - $70,000, estimated uncollectible = 4%. 2. Accounts 1-30 days past due $30,000; estimated uncollectible -15%. 3. Accounts more than 30 days past due = $5,000; estimated uncollectible = 40%. Record the year-end adjustment for uncollectible accounts, assuming the current balance of the Allowance for Uncollectible Accounts is $1,200 (debit)....
As its year-end approaches, it appears that Mendez Corporation’s net income will increase by 10% this...
As its year-end approaches, it appears that Mendez Corporation’s
net income will increase by 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 increases 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...
AP5-5 Ethics You have recently been hired as the assistant controller for Stanton Industries. Your immediate superior 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 categones. The analysis indicates that an appropriate balance for Allowance for Uncollectible Accounts is $180,000....
You are the Controller at Gander, Inc. and are responsible for
preparing and analyzing the balance sheet for December 31, 2018,
the end of the company’s fiscal year. Gander Inc. had the following
balance sheet balances at December 31, 2017:
During 2018, the following occurred:
Customer sales on account $400,000.
Received payments from customers in cash $380,000.
Purchased merchandise on credit $220,000.
Paid cash to vendors $230,000.
Costs related to merchandise sold $170,000.
Operating expenses were paid in cash $80,000....
the year, a company has the following accounts receivable and estimates of 2. At the end of the year, a company has the follow uncollectible accounts: s not yet due - $70,000, estimated uncollectible = 4%. 2. Accounts 1-30 days past due $30,000; estimated uncollectible -15%. 3. Accounts more than 30 days past due = $5,000; estimated uncollectible = 40%. Record the year-end adjustment for uncollectible accounts, assuming the current balance of the Allowance for Uncollectible Accounts is $1,200 (debit)....
As its year-end approaches, it appears that Mendez Corporation’s
net income will increase by 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 increases 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...
Most questions answered within 3 hours.
-
Mr. and Mrs. Brown report taxable income of $130,000 in 2018. In
addition, they report the...
asked 33 minutes ago -
You capture data by having 8 people fill in 30 small dots on a
piece of...
asked 4 hours ago -
What are the z-values such that 70% of the area lies in the
middle of the...
asked 6 hours ago -
You borrow $29,500 to purchase a brand new car. The interest
rate is 6%, and the...
asked 5 hours ago -
The amount of time it takes an asteroid, whose average distance
from the Sun is 4.70...
asked 6 hours ago -
A 0.289 kg mass slides on a frictionless floor with a speed of
1.34 m/s. The...
asked 6 hours ago -
15.A box contains five red balls, three green balls, and two
yellow balls. Suppose you select...
asked 8 hours ago -
Assume you are given the following for Stackelberg industries:
Return on Assets (ROA) = 8%
Debt...
asked 7 hours ago -
an engineer proposes to use mmWave in 5G network to
increase data rate.
What are the...
asked 7 hours ago -
Explain the idea behind using SEMIJOIN in distributed
query processing.
asked 7 hours ago -
why
is context important in selecting and applying guidelines and
principles for interface design?
illustrate your...
asked 7 hours ago -
In a certain board game, a player rolls two fair six-sided dice
until the player rolls...
asked 8 hours ago