Ethical Case Study Case Summary: The manufacturing company C rented out their excess warehouse space to a local company in lease. The entire lease amount was received on the day, the lease signed. So the company reports a huge amount of unearned rent in its balance sheet. While preparing the adjusted trial balance at the end of the accounting period, the chief accountant Mr. C notices a significant decline in the earnings of the company and reports to the CFO. The CFO instructed him to pass an adjusting for unearned rent (as rent revenue), as they have received the full cash and have the right to recognize the revenue for the company in the current period. With lots of dilemma finally Mr. C passes the adjusting entry . To explain: If Mr. C is behaving ethically or not?

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Answer 1

Question

Chapter 3, Problem 3.1TIF

1.

To determine

Ethical Case Study

Case Summary:

The manufacturing company C rented out their excess warehouse space to a local company in lease. The entire lease amount was received on the day, the lease signed. So the company reports a huge amount of unearned rent in its balance sheet. While preparing the adjusted trial balance at the end of the accounting period, the chief accountant Mr. C notices a significant decline in the earnings of the company and reports to the CFO. The CFO instructed him to pass an adjusting for unearned rent (as rent revenue), as they have received the full cash and have the right to recognize the revenue for the company in the current period. With lots of dilemma finally Mr. C passes the adjusting entry.

To explain: If Mr. C is behaving ethically or not?

2.

To determine

The parties affected by C’s decision

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Answer 2

Question

Chapter 3, Problem 3.1TIF

1.

To determine

Ethical Case Study

Case Summary:

The manufacturing company C rented out their excess warehouse space to a local company in lease. The entire lease amount was received on the day, the lease signed. So the company reports a huge amount of unearned rent in its balance sheet. While preparing the adjusted trial balance at the end of the accounting period, the chief accountant Mr. C notices a significant decline in the earnings of the company and reports to the CFO. The CFO instructed him to pass an adjusting for unearned rent (as rent revenue), as they have received the full cash and have the right to recognize the revenue for the company in the current period. With lots of dilemma finally Mr. C passes the adjusting entry.

To explain: If Mr. C is behaving ethically or not?

2.

To determine

The parties affected by C’s decision

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Answer 3

Question

Chapter 3, Problem 3.1TIF

1.

To determine

Ethical Case Study

Case Summary:

The manufacturing company C rented out their excess warehouse space to a local company in lease. The entire lease amount was received on the day, the lease signed. So the company reports a huge amount of unearned rent in its balance sheet. While preparing the adjusted trial balance at the end of the accounting period, the chief accountant Mr. C notices a significant decline in the earnings of the company and reports to the CFO. The CFO instructed him to pass an adjusting for unearned rent (as rent revenue), as they have received the full cash and have the right to recognize the revenue for the company in the current period. With lots of dilemma finally Mr. C passes the adjusting entry.

To explain: If Mr. C is behaving ethically or not?

2.

To determine

The parties affected by C’s decision

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Answer 4

Question

Chapter 3, Problem 3.1TIF

1.

To determine

Ethical Case Study

Case Summary:

The manufacturing company C rented out their excess warehouse space to a local company in lease. The entire lease amount was received on the day, the lease signed. So the company reports a huge amount of unearned rent in its balance sheet. While preparing the adjusted trial balance at the end of the accounting period, the chief accountant Mr. C notices a significant decline in the earnings of the company and reports to the CFO. The CFO instructed him to pass an adjusting for unearned rent (as rent revenue), as they have received the full cash and have the right to recognize the revenue for the company in the current period. With lots of dilemma finally Mr. C passes the adjusting entry.

To explain: If Mr. C is behaving ethically or not?

2.

To determine

The parties affected by C’s decision

Expert Solution & Answer

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Answer 5

Chapter 3, Problem 3.1TIF

1.

To determine

Ethical Case Study

Case Summary:

The manufacturing company C rented out their excess warehouse space to a local company in lease. The entire lease amount was received on the day, the lease signed. So the company reports a huge amount of unearned rent in its balance sheet. While preparing the adjusted trial balance at the end of the accounting period, the chief accountant Mr. C notices a significant decline in the earnings of the company and reports to the CFO. The CFO instructed him to pass an adjusting for unearned rent (as rent revenue), as they have received the full cash and have the right to recognize the revenue for the company in the current period. With lots of dilemma finally Mr. C passes the adjusting entry.

To explain: If Mr. C is behaving ethically or not?

2.

To determine

The parties affected by C’s decision

Answer 6

Chapter 3, Problem 3.1TIF

1.

To determine

Ethical Case Study

Case Summary:

The manufacturing company C rented out their excess warehouse space to a local company in lease. The entire lease amount was received on the day, the lease signed. So the company reports a huge amount of unearned rent in its balance sheet. While preparing the adjusted trial balance at the end of the accounting period, the chief accountant Mr. C notices a significant decline in the earnings of the company and reports to the CFO. The CFO instructed him to pass an adjusting for unearned rent (as rent revenue), as they have received the full cash and have the right to recognize the revenue for the company in the current period. With lots of dilemma finally Mr. C passes the adjusting entry.

To explain: If Mr. C is behaving ethically or not?

Answer 7

Chapter 3, Problem 3.1TIF

1.

To determine

Ethical Case Study

Case Summary:

The manufacturing company C rented out their excess warehouse space to a local company in lease. The entire lease amount was received on the day, the lease signed. So the company reports a huge amount of unearned rent in its balance sheet. While preparing the adjusted trial balance at the end of the accounting period, the chief accountant Mr. C notices a significant decline in the earnings of the company and reports to the CFO. The CFO instructed him to pass an adjusting for unearned rent (as rent revenue), as they have received the full cash and have the right to recognize the revenue for the company in the current period. With lots of dilemma finally Mr. C passes the adjusting entry.

To explain: If Mr. C is behaving ethically or not?

Answer 8

2.

To determine

The parties affected by C’s decision

Answer 9

2.

To determine

The parties affected by C’s decision

Answer 10

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Answer 21

Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Is the matching concept related to (A) the cash...Ch. 3 - Why are adjusting entries needed at the end of an...Ch. 3 - What is the difference between adjusting entries...Ch. 3 - Identify the four different categories of...Ch. 3 - If the effect of the debit portion of an adjusting...Ch. 3 - If the effect of the credit portion of an...Ch. 3 - Prob. 8DQ Ch. 3 - Prob. 9DQ Ch. 3 - (A) Explain the purpose of the two accounts:...

Solution Summary: The author explains that the manufacturing company C rented out their excess warehouse space to a local company in lease. The CFO instructed him to pass an adjusting entry to increase the net income of the company.

The parties affected by C’s decision

Chapter 3 Solutions