F. Company is a manufacturing company. The company’s assistant chief accountant is MW. The total sales of the company are recorded as $20 million at the end of the first quarter. MW prepares the trial balance for the further preparation of financial statements to be submitted to regulatory agencies. On the trial balance, there was a mismatch, with the credits exceeding the debits by $1,000. So, MW adjusted the difference by adding the same to the Equipment account, considering it has huge account balances and it would not affect any important decisions. MW wanted to find the error but she did not have time and she was already late in preparing the trial balance. Adequate information: On the trial balance the total credits exceeded the total debits by $1,000. MW, the assistant chief accountant adjusts the difference by adding the same to the Equipment account. MW considers that the Equipment account has huge account balances, so it would not be detected. Moreover, this would not affect anyone’s decision. The stakeholders in the given case.

Question

Want to see the full answer?

Answer 1

Question

Chapter 2, Problem 2.8EYCT

(a)

To determine

Case summary:

F. Company is a manufacturing company. The company’s assistant chief accountant is MW. The total sales of the company are recorded as $20 million at the end of the first quarter. MW prepares the trial balance for the further preparation of financial statements to be submitted to regulatory agencies. On the trial balance, there was a mismatch, with the credits exceeding the debits by $1,000. So, MW adjusted the difference by adding the same to the Equipment account, considering it has huge account balances and it would not affect any important decisions. MW wanted to find the error but she did not have time and she was already late in preparing the trial balance.

Adequate information:

On the trial balance the total credits exceeded the total debits by $1,000.

MW, the assistant chief accountant adjusts the difference by adding the same to the Equipment account.

MW considers that the Equipment account has huge account balances, so it would not be detected. Moreover, this would not affect anyone’s decision.

The stakeholders in the given case.

(b)

To determine

The ethical issues in the given case.

(c)

To determine

The alternatives available to MW.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

The total cost of the units completed?

Blockbuster Co is building a new state of the art Cineplex at a cost of $3,500,000. They received a capital investment of $1,500,000. The remainder of funds will have to be borrowed so they decided to issue bonds. They have issued 10.5%, 5-year bonds. These bonds were issued on January 1st, 2020, and pay semi-annual interest on July 1st and January 1st. The bonds yield 10%. The year-end is December 31st. Requirements: (Show all workings) Calculate the proceeds from the sale of the bond. Clearly, show the amount of the premium or discount and state two reasons, which support the premium or discount calculated. Compute the Present Value of Interest Payments show all steps using the formula.

The estimated amount of ending inventory?