Introduction:
This examination must address your utilization of ethics in considering and basic leadership and your potential for struggle in circumstances with individuals who have distinctive translations of moral conduct.
According to the Ethics Awareness Inventory [EAI] (Williams Institute for Ethics and Management [WIEM], 2003), Moral viewpoint is well on the way to be founded on commitment, and least liable to be founded on value. In this paper, I will apply the consequences of this inventory to my own and expert improvement, clarifying how my instructive experience has molded my moral reasoning, tending to my utilization of ethics in considering and basic leadership, and examining my potential for struggle in circumstances with individuals of various moral points of view. The EAI states that my moral point of view depends on "a person’s obligation or commitment to do what is ethically right".
To discuss:
Why is the store manager reluctant to admit that these computers have little sale value?
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Cornerstones of Financial Accounting
- Ethics and Inventory An electronics store has a large number of computers that use outdated technology in its inventory. These computers are reported at their cost. Shortly after the December 31 year end, the store manager insists that the computers can be sold for well over their cost. But the stores accountant has been told by the sales staff that it will be difficult to sell these computers for more than half of their inventory cost. Required: What are the consequences for the business of failing to recognize the decline in value?arrow_forwardEthics and Inventory An electronics store has a large number of computers that use outdated technology in its inventory. These computers are reported at their cost. Shortly after the December 31 year end, the store manager insists that the computers can be sold for well over their cost. But the stores accountant has been told by the sales staff that it will be difficult to sell these computers for more than half of their inventory cost. Required: What are the consequences for the accountant of participating in a misrepresentation of the inventorys value?arrow_forwardItems Included in Inventory The following are several items that Golosow Companys controller has questioned regarding their inclusion in inventory: a. An invoice has been received for goods ordered. The goods were shipped FOB destination but have not been received. b. Purchases have been ordered and received (shipping terms were FOB destination), but no invoice has arrived. c. Product was shipped to a customer today, FOB destination, and the invoice mailed. d. Purchases are in the receiving department, but they are damaged and will be returned. e. Product is in the shipping department, and the invoice has not been mailed to the customer. Shipping terms are FOB shipping point. f. Golosow has inventory in its possession from Tate Company. The inventory is to be sold by Golosow under a consignment arrangement with Tate. Required: 1. For each of the preceding items, indicate whether Golosow should include them in inventory. Justify your answer. 2. Next Level Describe the basic criterion for including items in inventory.arrow_forward
- Your client, Daves Sport Shop, sells sports equipment and clothing in three retail outlets in New York City. During 2019, the CFO decided that keeping track of inventory using a combination of QuickBooks and spreadsheets was not an efficient way to manage the stores inventories. So Daves purchased an inventory management system for 9,000 that allowed the entity to keep track of inventory, as well as automate ordering and purchasing, without replacing QuickBooks for its accounting function. The CFO would like to know whether the cost of the inventory management program can be expensed in the year of purchase. Write a letter to the CFO, Cassandra Martin, that addresses the tax treatment of purchased software. Cassandras mailing address is 867 Broadway, New York, NY 10003.arrow_forwardLower of Cost or Market Shaw Systems sells a limited line of specially made products, using television advertising campaigns in large cities. At year end, Shaw has the following data for its inventory: Required: 1. Compute the carrying value of the ending inventory using the lower of cost or market rule applied on an item-by-item basis. 2. Prepare the journal entry required to value the inventory at lower of cost or market. 3. CONCEPTUAL CONNECTION What is the impact of applying the lower of cost or market rule on the financial statements of the current period? What is the impact on the financial statements of a subsequent period in which the inventory is sold?arrow_forwardAZO Co. currently uses a periodic inventory system. Mr. Sohaim, the owner, is consideringthe purchase of a computer system that would make it feasible to switch to a perpetualinventory system. Mr. Hasan is unhappy with the periodic inventory system because it doesnot provide timely information on inventory levels. Mr. Hasan has noticed on severaloccasions that the store runs out of good-selling items, while too many poor-selling itemsare on hand. Mr. Hasan is also concerned about lost sales while a physical inventory is beingtaken. AZO Co. currently takes a physical inventory twice a year. To minimize distractions,the store is closed on the day inventory is taken. Mr. Hasan believes that closing the store isthe only way to get an accurate inventory count.1. Will switching to a perpetual inventory system strengthen AZO Co.’s control overinventory items?2. Will switching to a perpetual inventory system eliminate the need for a physicalinventory count?3. How IAS-2 is applicable here?arrow_forward
- Karen's retail store sells apparel. The store is in the third year of operations and is struggling financially. Part of the problem is that the cost of inventory has increased. The store assigns inventory costs using LIFO. A loan agreement with the bank requires the store to maintain a certain profit margin. Karen is reviewing the current year financial statements and sees that results are not favorable. The only way that the store can meet the required profit margin is to change inventory costing from LIFO to FIFO. Karen redoes the financial statements using FIFO and submits them to the bank without disclosing the change. How is it that FIFO improves the profit of the store? Did Karen make a good ethical choice by changing to FIFO? Why or why not? What alternatives did Karen have in this situation?arrow_forwardWares king supplies custom-fitted curtains and blinds to retail customers. It has recently expanded tooffer a wide variety of home decorating products through its six stores across the state. After someinitial problems with stock control, it installed a new automated inventory system in April this year.The system replaced another automated system that had been modified so often over the years thatthe auditor had advised Wares’ management that they did not regard it as reliable. That is, theauditor was unable to rely on the old system sufficiently to assess control risk for inventory as anythingless than high.Required:a) Explain the normal process an auditor would expect to find in the client’s systems governingchanges to computer programs. Why is an auditor concerned about program changes? b) Wares kings’ financial year-end is 31 December. Does the auditor need to obtain evidence aboutthe performance of the inventory control system from every month in the year or from a sampleof…arrow_forward
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