RM Company, owner of RM Mall, charges Hope Clothing Store, a rental fee of P60, 000 per month plus 5% yearly profits over P5, 000,000. Jacob, the owner of the store, directs his accountant Jun Reyes, to increase the estimate of bad debt expense and warranty costs in order to keep profits at P4, 750,000. Instructions: Should Jun Reyes follow his boss’ directive? Who is harmed if the estimates are increased?
RM Company, owner of RM Mall, charges Hope Clothing Store, a rental fee of P60, 000 per month plus 5% yearly profits over P5, 000,000. Jacob, the owner of the store, directs his accountant Jun Reyes, to increase the estimate of bad debt expense and warranty costs in order to keep profits at P4, 750,000. Instructions: Should Jun Reyes follow his boss’ directive? Who is harmed if the estimates are increased?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
RM Company, owner of RM Mall, charges Hope Clothing Store, a rental fee of P60, 000 per month
plus 5% yearly profits over P5, 000,000. Jacob, the owner of the store, directs his accountant Jun Reyes, to
increase the estimate of
Instructions:
Should Jun Reyes follow his boss’ directive? Who is harmed if the estimates are increased?
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