Ethical Case Case Summary: “W” Corporation is a whole seller of the automotive parts. It has 10 stockholders who are receiving $1 million as total dividends for last 8 years. The board’s policy is to pay the dividends until the net income exceeds $1 million and the president and CEO, G.R’s job is secured till he could garner that much in the cash provided from the operating activities each year. But in the current year S.G the controller presents a statement where the cash provided by the operating activities are shown as $970,000, and thus president asks S.G to make it to the minimum level of $1 million. S.G has misclassified one two year note-payable of $60,000 into a bank loan and managed to show net cash provided by the operating activities as $1,030,000 and saved G.R, the president. To Identify: The stakeholders in this situation.

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Answer 1

Question

Chapter 12, Problem 12.8EYCT

(a)

To determine

Ethical Case

Case Summary: “W” Corporation is a whole seller of the automotive parts. It has 10 stockholders who are receiving $1 million as total dividends for last 8 years. The board’s policy is to pay the dividends until the net income exceeds $1 million and the president and CEO, G.R’s job is secured till he could garner that much in the cash provided from the operating activities each year. But in the current year S.G the controller presents a statement where the cash provided by the operating activities are shown as $970,000, and thus president asks S.G to make it to the minimum level of $1 million. S.G has misclassified one two year note-payable of $60,000 into a bank loan and managed to show net cash provided by the operating activities as $1,030,000 and saved G.R, the president.

To Identify: The stakeholders in this situation.

(b)

To determine

To Identify: The possibility of any unethical actions on the part of the president and the possibility of any unethical actions on the part of the accountant.

(c)

To determine

To Ascertain: If the board of directors or anyone else is likely to discover the misclassification.

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subject: general accounting question

Nicole organized a new corporation. The corporation began business on April 1 of year 1. She made the following expenditures associated with getting the corporation started: Expense Date Amount Attorney fees for articles of incorporation February 10 $ 40,500 March 1-March 30 wages March 30 6,550 March 1-March 30 rent Stock issuance costs March 30 2,850 April 1-May 30 wages Note: Leave no answer blank. Enter zero if applicable. April 1 May 30 24,000 16,375 a. What is the total amount of the start-up costs and organizational expenditures for Nicole's corporation? Start-up costs Organizational expenditures

Answer 2

Question

Chapter 12, Problem 12.8EYCT

(a)

To determine

Ethical Case

Case Summary: “W” Corporation is a whole seller of the automotive parts. It has 10 stockholders who are receiving $1 million as total dividends for last 8 years. The board’s policy is to pay the dividends until the net income exceeds $1 million and the president and CEO, G.R’s job is secured till he could garner that much in the cash provided from the operating activities each year. But in the current year S.G the controller presents a statement where the cash provided by the operating activities are shown as $970,000, and thus president asks S.G to make it to the minimum level of $1 million. S.G has misclassified one two year note-payable of $60,000 into a bank loan and managed to show net cash provided by the operating activities as $1,030,000 and saved G.R, the president.

To Identify: The stakeholders in this situation.

(b)

To determine

To Identify: The possibility of any unethical actions on the part of the president and the possibility of any unethical actions on the part of the accountant.

(c)

To determine

To Ascertain: If the board of directors or anyone else is likely to discover the misclassification.

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Answer 3

Question

Chapter 12, Problem 12.8EYCT

(a)

To determine

Ethical Case

Case Summary: “W” Corporation is a whole seller of the automotive parts. It has 10 stockholders who are receiving $1 million as total dividends for last 8 years. The board’s policy is to pay the dividends until the net income exceeds $1 million and the president and CEO, G.R’s job is secured till he could garner that much in the cash provided from the operating activities each year. But in the current year S.G the controller presents a statement where the cash provided by the operating activities are shown as $970,000, and thus president asks S.G to make it to the minimum level of $1 million. S.G has misclassified one two year note-payable of $60,000 into a bank loan and managed to show net cash provided by the operating activities as $1,030,000 and saved G.R, the president.

To Identify: The stakeholders in this situation.

(b)

To determine

To Identify: The possibility of any unethical actions on the part of the president and the possibility of any unethical actions on the part of the accountant.

(c)

To determine

To Ascertain: If the board of directors or anyone else is likely to discover the misclassification.

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Answer 4

Question

Chapter 12, Problem 12.8EYCT

(a)

To determine

Ethical Case

Case Summary: “W” Corporation is a whole seller of the automotive parts. It has 10 stockholders who are receiving $1 million as total dividends for last 8 years. The board’s policy is to pay the dividends until the net income exceeds $1 million and the president and CEO, G.R’s job is secured till he could garner that much in the cash provided from the operating activities each year. But in the current year S.G the controller presents a statement where the cash provided by the operating activities are shown as $970,000, and thus president asks S.G to make it to the minimum level of $1 million. S.G has misclassified one two year note-payable of $60,000 into a bank loan and managed to show net cash provided by the operating activities as $1,030,000 and saved G.R, the president.

To Identify: The stakeholders in this situation.

(b)

To determine

To Identify: The possibility of any unethical actions on the part of the president and the possibility of any unethical actions on the part of the accountant.

(c)

To determine

To Ascertain: If the board of directors or anyone else is likely to discover the misclassification.

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Answer 5

Chapter 12, Problem 12.8EYCT

(a)

To determine

Ethical Case

Case Summary: “W” Corporation is a whole seller of the automotive parts. It has 10 stockholders who are receiving $1 million as total dividends for last 8 years. The board’s policy is to pay the dividends until the net income exceeds $1 million and the president and CEO, G.R’s job is secured till he could garner that much in the cash provided from the operating activities each year. But in the current year S.G the controller presents a statement where the cash provided by the operating activities are shown as $970,000, and thus president asks S.G to make it to the minimum level of $1 million. S.G has misclassified one two year note-payable of $60,000 into a bank loan and managed to show net cash provided by the operating activities as $1,030,000 and saved G.R, the president.

To Identify: The stakeholders in this situation.

(b)

To determine

To Identify: The possibility of any unethical actions on the part of the president and the possibility of any unethical actions on the part of the accountant.

(c)

To determine

To Ascertain: If the board of directors or anyone else is likely to discover the misclassification.

Answer 6

Chapter 12, Problem 12.8EYCT

(a)

To determine

Ethical Case

Case Summary: “W” Corporation is a whole seller of the automotive parts. It has 10 stockholders who are receiving $1 million as total dividends for last 8 years. The board’s policy is to pay the dividends until the net income exceeds $1 million and the president and CEO, G.R’s job is secured till he could garner that much in the cash provided from the operating activities each year. But in the current year S.G the controller presents a statement where the cash provided by the operating activities are shown as $970,000, and thus president asks S.G to make it to the minimum level of $1 million. S.G has misclassified one two year note-payable of $60,000 into a bank loan and managed to show net cash provided by the operating activities as $1,030,000 and saved G.R, the president.

To Identify: The stakeholders in this situation.

Answer 7

Chapter 12, Problem 12.8EYCT

(a)

To determine

Ethical Case

Case Summary: “W” Corporation is a whole seller of the automotive parts. It has 10 stockholders who are receiving $1 million as total dividends for last 8 years. The board’s policy is to pay the dividends until the net income exceeds $1 million and the president and CEO, G.R’s job is secured till he could garner that much in the cash provided from the operating activities each year. But in the current year S.G the controller presents a statement where the cash provided by the operating activities are shown as $970,000, and thus president asks S.G to make it to the minimum level of $1 million. S.G has misclassified one two year note-payable of $60,000 into a bank loan and managed to show net cash provided by the operating activities as $1,030,000 and saved G.R, the president.

To Identify: The stakeholders in this situation.

Answer 8

(b)

To determine

To Identify: The possibility of any unethical actions on the part of the president and the possibility of any unethical actions on the part of the accountant.

Answer 9

(b)

To determine

To Identify: The possibility of any unethical actions on the part of the president and the possibility of any unethical actions on the part of the accountant.

Answer 10

(c)

To determine

To Ascertain: If the board of directors or anyone else is likely to discover the misclassification.

Answer 11

(c)

To determine

To Ascertain: If the board of directors or anyone else is likely to discover the misclassification.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - Prob. 4Q Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Prob. 7Q Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - Prob. 10Q

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To Identify: The possibility of any unethical actions on the part of the president and the possibility of any unethical actions on the part of the accountant.

To Ascertain: If the board of directors or anyone else is likely to discover the misclassification.

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