The stakeholders in this situation. Ethical Case Case Summary: Company K’s sales declines heavily due to ban on some pesticides it produces for environmental reasons. The president of Company K urged the controller M to accrue, every possible revenue and defer as many expenses as possible, by making year end adjusting entries and make the company profitable in the current year, so that its stock price would not come down and it make it a candidate for takeover.

Question

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Answer 1

Question

Chapter 3, Problem 3.8EYCT

(a)

To determine

The stakeholders in this situation.

Ethical Case

Case Summary: Company K’s sales declines heavily due to ban on some pesticides it produces for environmental reasons. The president of Company K urged the controller M to accrue, every possible revenue and defer as many expenses as possible, by making year end adjusting entries and make the company profitable in the current year, so that its stock price would not come down and it make it a candidate for takeover.

(b)

To determine

To Identify: The ethical considerations of the president’s request, and M’s dating the adjusting entries December 31.

(c)

To determine

To Ascertain: If M can do accruing revenues and deferring expenses and still be ethical.

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Answer 2

Question

Chapter 3, Problem 3.8EYCT

(a)

To determine

The stakeholders in this situation.

Ethical Case

Case Summary: Company K’s sales declines heavily due to ban on some pesticides it produces for environmental reasons. The president of Company K urged the controller M to accrue, every possible revenue and defer as many expenses as possible, by making year end adjusting entries and make the company profitable in the current year, so that its stock price would not come down and it make it a candidate for takeover.

(b)

To determine

To Identify: The ethical considerations of the president’s request, and M’s dating the adjusting entries December 31.

(c)

To determine

To Ascertain: If M can do accruing revenues and deferring expenses and still be ethical.

Expert Solution & Answer

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Answer 3

Question

Chapter 3, Problem 3.8EYCT

(a)

To determine

The stakeholders in this situation.

Ethical Case

Case Summary: Company K’s sales declines heavily due to ban on some pesticides it produces for environmental reasons. The president of Company K urged the controller M to accrue, every possible revenue and defer as many expenses as possible, by making year end adjusting entries and make the company profitable in the current year, so that its stock price would not come down and it make it a candidate for takeover.

(b)

To determine

To Identify: The ethical considerations of the president’s request, and M’s dating the adjusting entries December 31.

(c)

To determine

To Ascertain: If M can do accruing revenues and deferring expenses and still be ethical.

Expert Solution & Answer

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Answer 4

Question

Chapter 3, Problem 3.8EYCT

(a)

To determine

The stakeholders in this situation.

Ethical Case

Case Summary: Company K’s sales declines heavily due to ban on some pesticides it produces for environmental reasons. The president of Company K urged the controller M to accrue, every possible revenue and defer as many expenses as possible, by making year end adjusting entries and make the company profitable in the current year, so that its stock price would not come down and it make it a candidate for takeover.

(b)

To determine

To Identify: The ethical considerations of the president’s request, and M’s dating the adjusting entries December 31.

(c)

To determine

To Ascertain: If M can do accruing revenues and deferring expenses and still be ethical.

Expert Solution & Answer

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Answer 5

Chapter 3, Problem 3.8EYCT

(a)

To determine

The stakeholders in this situation.

Ethical Case

Case Summary: Company K’s sales declines heavily due to ban on some pesticides it produces for environmental reasons. The president of Company K urged the controller M to accrue, every possible revenue and defer as many expenses as possible, by making year end adjusting entries and make the company profitable in the current year, so that its stock price would not come down and it make it a candidate for takeover.

(b)

To determine

To Identify: The ethical considerations of the president’s request, and M’s dating the adjusting entries December 31.

(c)

To determine

To Ascertain: If M can do accruing revenues and deferring expenses and still be ethical.

Answer 6

Chapter 3, Problem 3.8EYCT

(a)

To determine

The stakeholders in this situation.

Ethical Case

Case Summary: Company K’s sales declines heavily due to ban on some pesticides it produces for environmental reasons. The president of Company K urged the controller M to accrue, every possible revenue and defer as many expenses as possible, by making year end adjusting entries and make the company profitable in the current year, so that its stock price would not come down and it make it a candidate for takeover.

Answer 7

Chapter 3, Problem 3.8EYCT

(a)

To determine

The stakeholders in this situation.

Ethical Case

Case Summary: Company K’s sales declines heavily due to ban on some pesticides it produces for environmental reasons. The president of Company K urged the controller M to accrue, every possible revenue and defer as many expenses as possible, by making year end adjusting entries and make the company profitable in the current year, so that its stock price would not come down and it make it a candidate for takeover.

Answer 8

(b)

To determine

To Identify: The ethical considerations of the president’s request, and M’s dating the adjusting entries December 31.

Answer 9

(b)

To determine

To Identify: The ethical considerations of the president’s request, and M’s dating the adjusting entries December 31.

Answer 10

(c)

To determine

To Ascertain: If M can do accruing revenues and deferring expenses and still be ethical.

Answer 11

(c)

To determine

To Ascertain: If M can do accruing revenues and deferring expenses and still be ethical.

Answer 12

Expert Solution & Answer

Answer 13

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Answer 14

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Answer 15

Ch. 3 - Prob. 1Q Ch. 3 - 2. Define two generally accepted accounting...Ch. 3 - 3.Susan Zupan, a lawyer, accepts a legal...Ch. 3 - 4.Why do accrual-basis financial statements...Ch. 3 - 5.In completing the engagement in Question 3,...Ch. 3 - Prob. 6Q Ch. 3 - Prob. 7Q Ch. 3 - Prob. 8Q Ch. 3 - 9. What is the debit/credit effect of a prepaid...Ch. 3 - Prob. 10Q

To Identify: The ethical considerations of the president’s request, and M’s dating the adjusting entries December 31.

To Ascertain: If M can do accruing revenues and deferring expenses and still be ethical.

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Chapter 3 Solutions