Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Chapter 6, Problem 6EIA
1.
To determine
Describe the effect of decrease in
2.
To determine
Discuss the ethical issues faced by the staff accountant.
3.
To determine
Explain the alternatives for the ethical issues faced by accountant, and indicate the potential consequences of the alternatives.
4.
To determine
Indicate some reasons used to support unethical behavior.
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You are an accounting intern working for SpringFit Corporation. You have recently been assigned to help one of the accountants who is doing an internal audit of the business. You will be assisting with a review of the payables issued by SpringFit Corporation. Your first task is to review the previous year’s journal entries, shown as follows:
Journal Entries, Year 1
PAGE 15
GENERAL JOURNAL
ACCOUNTING EQUATION
DATE
ACCOUNT TITLE
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
1
Jan. 1
Cash
1,062,060.00
↑
2
Premium on Bonds Payable
62,060.00
↑
3
Bonds Payable
1,000,000.00
↑
4
Jun. 30
Interest Expense
19,397.00
↓
5
Premium on Bonds Payable
3,103.00
↓
6
Cash
22,500.00
↓
7
Jul. 1
Cash
1,921,280.00
↑
8
Discount on Bonds Payable
78,720.00
↓…
You are an accounting intern working for SpringFit Corporation. You have recently been assigned to help one of the accountants who is doing an internal audit of the business. You will be assisting with a review of the payables issued by SpringFit Corporation. Your first task is to review the previous year’s journal entries, shown as follows:
Journal Entries, Year 1
PAGE 15
GENERAL JOURNAL
ACCOUNTING EQUATION
DATE
ACCOUNT TITLE
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
1
Jan. 1
Cash
1,062,060.00
↑
2
Premium on Bonds Payable
62,060.00
↑
3
Bonds Payable
1,000,000.00
↑
4
Jun. 30
Interest Expense
19,397.00
↓
5
Premium on Bonds Payable
3,103.00
↓
6
Cash
22,500.00
↓
7
Jul. 1
Cash
1,921,280.00
↑
8
Discount on Bonds Payable
78,720.00
↓…
Assume you are a newly hired accountant for a local manufacturing firm. You have enjoyed working for the company and are looking forward to your first experience participating in the preparation of the company’s financial statements for the year-ending December 31, the end of the company’s fiscal year.
As you are preparing your assigned journal entries, your supervisor approaches you and asks to speak with you. Your supervisor is concerned because, based on her preliminary estimates, the company will fall just shy of its financial targets for the year. If the estimates are true, this means that all 176 employees of the company will not receive year-end bonuses, which represent a significant portion of their pay.
One of the entries that you will prepare involves the upcoming bond interest payment that will be paid on January 15 of the next year. Your supervisor has calculated that, if the journal entry is dated on January 1 of the following year rather than on December 31 of the current…
Chapter 6 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 6 - Prob. 1DQCh. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Prob. 4DQCh. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - Prob. 10DQ
Ch. 6 - Prob. 1SCCh. 6 - Prob. 2SCCh. 6 - Prob. 3SCCh. 6 - Prob. 4SCCh. 6 - Separation of duties refers to separating all of...Ch. 6 - Which of the following is not a control activity?...Ch. 6 - Prob. 7SCCh. 6 - Prob. 8SCCh. 6 - Internal auditors focus on _________ ; external...Ch. 6 - Prob. 10SCCh. 6 - Prob. 11SCCh. 6 - Prob. 12SCCh. 6 - Prob. 1SECh. 6 - Fraud triangle (Learning Objective 3) 5-10 min....Ch. 6 - Prob. 3SECh. 6 - Internal controls (Learning Objective 2) 5-10 min....Ch. 6 - Prob. 5SECh. 6 - Prob. 6SECh. 6 - Prob. 7SECh. 6 - Prob. 8SECh. 6 - Prob. 9SECh. 6 - Prob. 10SECh. 6 - Prob. 11SECh. 6 - Accounting terminology (Learning Objectives 1 4)...Ch. 6 - Prob. 13SECh. 6 - Prob. 14SECh. 6 - Prob. 1CFSAPCh. 6 - Prob. 1EIACh. 6 - Prob. 2EIACh. 6 - Prob. 3EIACh. 6 - Prob. 4EIACh. 6 - Prob. 5EIACh. 6 - Prob. 6EIACh. 6 - Case 7. Kelly Straton, a trusted employee of...Ch. 6 - Prob. 8EIACh. 6 - Prob. 1FACh. 6 - Industry Analysis Purpose: To help you understand...Ch. 6 - Prob. 1SBACh. 6 - Prob. 1WC
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