Stock options : Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period. Facts of the case : In an audit survey by an auditor, DR, a CPS firm, it is found that a multinational company, MC Industries, being a long-time client of the firm, has changed its accounting method of inventory from last-in-first-out to first-in-first-out. On investigation, it is found that this change is done to increase the net income above $44,000,000, through which it facilitates the increase in the number of shares to executives as per the stock option plan, otherwise which it will not happen. To discuss : The ethical dilemma, impact of following controller’s suggestions, the beneficiaries, and the injured

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Answer 1

Question

Chapter 19, Problem 19.3BYP

To determine

Stock options: Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period.

Facts of the case: In an audit survey by an auditor, DR, a CPS firm, it is found that a multinational company, MC Industries, being a long-time client of the firm, has changed its accounting method of inventory from last-in-first-out to first-in-first-out. On investigation, it is found that this change is done to increase the net income above $44,000,000, through which it facilitates the increase in the number of shares to executives as per the stock option plan, otherwise which it will not happen.

To discuss: The ethical dilemma, impact of following controller’s suggestions, the beneficiaries, and the injured

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Answer 2

Question

Chapter 19, Problem 19.3BYP

To determine

Stock options: Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period.

Facts of the case: In an audit survey by an auditor, DR, a CPS firm, it is found that a multinational company, MC Industries, being a long-time client of the firm, has changed its accounting method of inventory from last-in-first-out to first-in-first-out. On investigation, it is found that this change is done to increase the net income above $44,000,000, through which it facilitates the increase in the number of shares to executives as per the stock option plan, otherwise which it will not happen.

To discuss: The ethical dilemma, impact of following controller’s suggestions, the beneficiaries, and the injured

Expert Solution & Answer

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Answer 3

Question

Chapter 19, Problem 19.3BYP

To determine

Stock options: Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period.

Facts of the case: In an audit survey by an auditor, DR, a CPS firm, it is found that a multinational company, MC Industries, being a long-time client of the firm, has changed its accounting method of inventory from last-in-first-out to first-in-first-out. On investigation, it is found that this change is done to increase the net income above $44,000,000, through which it facilitates the increase in the number of shares to executives as per the stock option plan, otherwise which it will not happen.

To discuss: The ethical dilemma, impact of following controller’s suggestions, the beneficiaries, and the injured

Expert Solution & Answer

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Answer 4

Question

Chapter 19, Problem 19.3BYP

To determine

Stock options: Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period.

Facts of the case: In an audit survey by an auditor, DR, a CPS firm, it is found that a multinational company, MC Industries, being a long-time client of the firm, has changed its accounting method of inventory from last-in-first-out to first-in-first-out. On investigation, it is found that this change is done to increase the net income above $44,000,000, through which it facilitates the increase in the number of shares to executives as per the stock option plan, otherwise which it will not happen.

To discuss: The ethical dilemma, impact of following controller’s suggestions, the beneficiaries, and the injured

Expert Solution & Answer

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Answer 5

Chapter 19, Problem 19.3BYP

To determine

Stock options: Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period.

Facts of the case: In an audit survey by an auditor, DR, a CPS firm, it is found that a multinational company, MC Industries, being a long-time client of the firm, has changed its accounting method of inventory from last-in-first-out to first-in-first-out. On investigation, it is found that this change is done to increase the net income above $44,000,000, through which it facilitates the increase in the number of shares to executives as per the stock option plan, otherwise which it will not happen.

To discuss: The ethical dilemma, impact of following controller’s suggestions, the beneficiaries, and the injured

Answer 6

Chapter 19, Problem 19.3BYP

To determine

Stock options: Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period.

Facts of the case: In an audit survey by an auditor, DR, a CPS firm, it is found that a multinational company, MC Industries, being a long-time client of the firm, has changed its accounting method of inventory from last-in-first-out to first-in-first-out. On investigation, it is found that this change is done to increase the net income above $44,000,000, through which it facilitates the increase in the number of shares to executives as per the stock option plan, otherwise which it will not happen.

To discuss: The ethical dilemma, impact of following controller’s suggestions, the beneficiaries, and the injured

Answer 7

Chapter 19, Problem 19.3BYP

To determine

Stock options: Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period.

Facts of the case: In an audit survey by an auditor, DR, a CPS firm, it is found that a multinational company, MC Industries, being a long-time client of the firm, has changed its accounting method of inventory from last-in-first-out to first-in-first-out. On investigation, it is found that this change is done to increase the net income above $44,000,000, through which it facilitates the increase in the number of shares to executives as per the stock option plan, otherwise which it will not happen.

To discuss: The ethical dilemma, impact of following controller’s suggestions, the beneficiaries, and the injured

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 19 - Prob. 19.1Q Ch. 19 - Prob. 19.2Q Ch. 19 - The Tax Code differentiates between qualified...Ch. 19 - Stock option (and other share-based) plans often...Ch. 19 - What is a simple capital structure? How is EPS...Ch. 19 - Prob. 19.6Q Ch. 19 - Blake Distributors had 100,000 common shares...Ch. 19 - Why are preferred dividends deducted from net...Ch. 19 - Prob. 19.9Q Ch. 19 - The treasury stock method is used to incorporate...

Solution Summary: The author explains that stock options are stock-based compensation plans provided in the form of an option to buy certain number of shares.

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Chapter 19 Solutions