6th Edition

ISBN: 9781323791950

Author: MILLER-NOBLES

Publisher: PEARSON

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Chapter 12, Problem 12.1EI

Raffle's Kids, a nonprofit organization that provides aid to victims of domestic violence, low-income families, and special-needs children, has a 30-year, 5% mortgage on the existing building. The mortgage requires monthly payments of $3,000. Raffle's bookkeeper is preparing financial statements for the board and, in doing so, lists the mortgage balance of $287,000 under current liabilities because the board hopes to be able to pay the mortgage off in full next year. Of the mortgage principal, $20,000 will be paid next year if Raffie's pays according to the mortgage agreement. The board members call you, their trusted CPA, to advise them on how Raffle's Kids should report the mortgage on its balance sheet. What is the ethical issue? Provide and discuss the reason for your recommendation.

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Chapter 12, Problem 12.1DC

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Chapter 12 Solutions

HORNGREN'S M&F ACCT LL/W TCC CODE >IC<

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Solution Summary: The author analyzes the ethical issue of reporting the mortgage balance as current liability by the book-keeper.

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