Concept explainers
Broadening Your
Ethics Case
BYP9-5 You are an accountant in the budgetary, projections, and special projects department of Femetti Conductor, Inc., a large manufacturing company. The president. Richard Brown, asks you on very short notice to prepare some sales and income projections covering the next 2 years of the company’s much heralded new product tines. He wants these projections for a series of speeches he is making while on a 2-week trip to eight East Coast brokerage firms. The president hopes to bolster Fernetti’s stock sales and price.
You work 23 hours in 2 days to compile the projections, hand-deliver them to the president, and are swiftly but graciously thanked as he departs. A week later, you find time to go over some of your computations and discover a miscalculation that makes the projections grossly overstated. You quickly inquire about the president’s itinerary and learn that he has made half of his speeches and has half yet to make. You are in a quandary as to what to do.
Instructions
(a) What are the consequences of telling the president of your gross miscalculations?
(b) What are the consequences of not telling the president of your gross miscalculations?
(c) What are the ethical considerations to you and the president in this situation?
Want to see the full answer?
Check out a sample textbook solutionChapter 9 Solutions
Managerial Accounting: Tools for Business Decision Making 7e Binder Ready Version + WileyPLUS Registration Card
Additional Business Textbook Solutions
Financial Accounting
Financial Accounting (11th Edition)
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Construction Accounting And Financial Management (4th Edition)
Financial Accounting
Managerial Accounting (5th Edition)
- G Curtis Party Rentals offers party equipment such as tents, tables, chairs, and so on for outdoor events. The rental fees average $870 per event. Curtis receives a 15 percent deposit two months before the event, 60 percent the month before, and the remainder on the day the equipment is delivered and set up. Planners at Curtis estimate the following number of events for the last half of the current year: July August September October November December 260 280 330 240 200 230 Required: a. What are the expected revenues for Curtis Party Rentals for each month, July through December? Revenues are recorded in the month of the event. b. What are the expected cash receipts for each month, July through October? Complete this question by entering your answers in the tabs below.arrow_forwardBioGrow Sdn. Bhd is a retail fertilizer to farmers in Jitra. The company has approached its Bankers to provide funding for next year’s operations. In considering their funding application, a three - month master budget has been requested for review by the bankers.As a freelance accounting service provider, you have been approached by the management as a consultant to prepare the 1st quarter budget for the banker’s consideration for its next year’s (2021) operations.Below is the information as at the end of accounting year of December 2020: Debtors 23,000Bank 55,000Fixed asset at cost 698,000Accumulated depreciation 98,000Creditors 48,000Operating expenses for December 60,000Sales for December 400,000Ending inventory 20,000Retained earnings 120,000 The following additional information was also provided to assist your work.i) Depreciation is provided at the rate of 5% on cost of non-current assets per month.ii) Closing inventory is expected to increase by RM2000 in January from December…arrow_forwardBioGrow Sdn. Bhd is a retail fertilizer to farmers in Jitra. The company has approached its Bankers to provide funding for next year’s operations. In considering their funding application, a three - month master budget has been requested for review by the bankers. As a freelance accounting service provider, you have been approached by the management as a consultant to prepare the 1st quarter budget for the banker’s consideration for its next year’s (2021) operations. Below is the information as at the end of accounting year of December 2020: Details RM Debtors 23,000 Bank 55,000 Fixed asset at cost 698,000 Accumulated depreciation 98,000 Creditors 48,000 Operating expenses for December 60,000 Sales for December 400,000 Ending inventory 20,000 Retained earnings 120,000 The following additional information was also provided to assist your work. Depreciation is provided at the rate of 5% on cost of…arrow_forward
- BioGrow Sdn. Bhd is a retail fertilizer to farmers in Jitra. The company has approached its Bankers to provide funding for next year’s operations. In considering their funding application, a three - month master budget has been requested for review by the bankers. As a freelance accounting service provider, you have been approached by the management as a consultant to prepare the 1st quarter budget for the banker’s consideration for its next year’s (2021) operations. Below is the information as at the end of accounting year of December 2020: Details RM Debtors 23,000 Bank 55,000 Fixed asset at cost 698,000 Accumulated depreciation 98,000 Creditors 48,000 Operating expenses for December 60,000 Sales for December 400,000 Ending inventory 20,000 Retained earnings 120,000 The following additional information was also provided to assist your work. i) Depreciation is provided at the rate of 5% on cost of…arrow_forwardBioGrow Sdn. Bhd is a retail fertilizer to farmers in Jitra. The company has approached its Bankers to provide funding for next year’s operations. In considering their funding application, a three - month master budget has been requested for review by the bankers. As a freelance accounting service provider, you have been approached by the management as a consultant to prepare the 1st quarter budget for the banker’s consideration for its next year’s (2021) operations. Below is the information as at the end of accounting year of December 2020: Details RM Debtors 23,000 Bank 55,000 Fixed asset at cost 698,000 Accumulated depreciation 98,000 Creditors 48,000 Operating expenses for December 60,000 Sales for December 400,000 Ending inventory 20,000 Retained earnings 120,000 The following additional information was also provided to assist your work. Depreciation is provided at the rate of 5% on cost of…arrow_forwardRequired information [The following information applies to the questions displayed below.] Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month's rent for this service. For August 2022, Phoenix expects to find rerters for 100 apartments with an average first month's rent of $760. Budgeted cost data per tenant application for 2022 follow: Professional labor: 2.0 hours at $15.00 per hour . . Credit checks: $53.00 Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,600 per month. On average, Phoenix is successful in placing one tenant for every three applicants. Actual rental applications in August 2022 were 270. Phoenix paid $9,300 for 480 hours of professional labor. Credit checks went up to $58 per application. Other costs in August 2022 (lease, secretarial help. and utilities) were $3.900. The average first monthly rentals for August 2022 were $860 per apartment…arrow_forward
- Current Attempt in Progress You have been asked to help the local commercial radio station prepare its business plan for the upcoming year. The radio station operates for 18 hours a day (6 a.m. to midnight) seven days a week, all year. It broadcasts on average 15 minutes of on-air advertising per hour. To sell the advertising time, the station uses commissioned sales staff who are paid a base salary plus commission that varies according to the volume of sales. The station manager asks you to calculate how many hours of advertising it would need to sell in order to break even. (a) Select the fixed costs and the variable costs. Rent • Utilities (heat, light, water) Property and business taxes Management salaries and benefits Marketing costs for the station • Sales force base salaries Costs of production of on-air commercial • Advertising sales commissionarrow_forwardRequired information [The following information applies to the questions displayed below.] Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month's rent for this service. For August 2022, Phoenix expects to find renters for 100 apartments with an average first month's rent of $700. Budgeted cost data per tenant application for 2022 follow: • Professional labor: 1.5 hours at $20.00 per hour • Credit checks: $50.00 Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,000 per month. On average, Phoenix is successful in placing one tenant for every three applicants. Actual rental applications in August 2022 were 270. Phoenix paid $9,500 for 400 hours of professional labor. Credit checks went up to $55 per application. Other costs in August 2022 (lease, secretarial help, and utilities) were $3,600. The average first monthly rentals for August 2022 were $800 per apartment…arrow_forwardRequired information [The following information applies to the questions displayed below.] Phoenix Management helps rental property owners find renters and charges the owners one-half of the first month's rent for this service. For August 2022, Phoenix expects to find renters for 100 apartments with an average first month's rent of $700. Budgeted cost data per tenant application for 2022 follow: • Professional labor: 1.5 hours at $18.00 per hour Credit checks: $52.00 Phoenix expects other costs, including the lease payment for the building, secretarial help, and utilities, to be $3,300 per month. On average, Phoenix is successful in placing one tenant for every three applicants. Actual rental applications in August 2022 were 240. Phoenix paid $6,900 for 350 hours of professional labor. Credit checks went up to $57 per application. Other costs in August 2022 (lease, secretarial help, and utilities) were $3,800. The average first monthly rentals for August 2022 were $840 per apartment…arrow_forward
- FOR THIS QUESTION IN THE ETHICAL THREAT BOX COULD YOU WRITE DOWN WHAT THREAT IT IS FOR EXAMPLE, SELF INTEREST THREAT, FAMILARITY THREAT, MANAGMENT THREAT, ETC. PART B - QUESTION KLB plc is one of your audit clients for the previous 8 years. The following information are available. The audit team included a manager and two juniors. The client was asking to finish the audit work early this year otherwise they are going to change the auditor next year. One-week bonus was paid to the audit team through their payroll as the client was happy that they finished auditing 5 days earlier than the planned audit time. The audit team got 10% discounts on the client’s products. The same discount is normally given to the client’s staff. Your firm offered this client a bookkeeping service for this year. To reduce the audit cost, the engagement letter was not updated this year as there is no big changes in the audit tasks from last year. Audit fees are based on a percentage of the net profit before…arrow_forwardYou have recently been appointed as the accountant attached to the head office of the company with the specific responsibility of monitoring the performance of the companies within the group. Each company is treated as an investment center and every month produces an operating statement for the group headquarters. Summaries of the statements for companies A and B which make similar products selling at similar prices for the last month showed a typical situation. Extract from the company monthly operating statements. A B GHS000 GHS000 Sales 600 370 Less variable cost 229 208 Contribution 371 162 Less controllable fixed overheads…arrow_forwardStart with the partial model in the file attached. Marvel Pence, CEO of Marvel’s Renovations, a custom building and repair company, is preparing documentation for a line of credit request from his commercial banker. Among the required documents is a detailed sales forecast for parts of 2020 and 2021: Sales Labor and Raw Materials May, 2020 $75,000 $80,000 June, 2020 $115,000 $75,000 July, 2020 $145,000 $105,000 August, 2020 $125,000 $85,000 September, 2020 $120,000 $65,000 October, 2020 $95,000 $70,000 November, 2020 $75,000 $30,000 December, 2020 $55,000 $35,000 January, 2021 $45,000 N/A Estimates obtained from the credit and collection department are as follows: collections within the month of sale, 20%; collections during the month following the sale, 60%; collections the second month following the sale, 25%. Payments for labor and raw materials are typically made during the month following the…arrow_forward