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

Question

Want to see the full answer?

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

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Martin Hughes earns net self-employment income of $157,100. He works a second job from which he receives FICA taxable earnings of $127,600.Self-Employment tax =

Question 2 U. Richards does not keep his books on the double entry system. His bank summary amount for 2010 is as follows: Balance 1.1.2010 1890 Receipts from $44656 debtors Creditors Loan from U. Miller $2.000 Rates Rent Drawings Cash withdrawn from bank $540 0 Payment to Trade $316 95 2750 1316 3095 1642 Sundry Expense Records of cash paid were sundry $122, trade creditors $642. Cash sales amounted to cash drawings were $5289. The following information is also available: 31.12.201 31.12.2 0 011 Cash in hand $48 $93 Trade creditors $4896 $5091 Accounts Receivables 60 $71 13 32 Rent Owing $250 Rates in Advance $282 $312 Motor van (at valuation) 2800 2400 Stock 11163 13021 Required: A. Statement of Affairs. (to find opening capital as at 31.12.2010) B. Cash Account & Bank Account. C. Accounts Receivables & Accounts Payables Control A/Cs. D. Income Statement for the year ended 31 December 2011.

2: Martin Hughes earns net self-employment income of $157,100. He works a second job from which he receives FICA taxable earnings of $127,600. Self-Employment tax = $ 6,440.70 3: Elisa Grant earns net self-employment income of $198,000. She works a second job from which she receives FICA taxable earnings of $100,400. Self-Employment tax = $ 30,294.00