Ask Question, Ask an Expert


Ask Operation Research Expert

Ethical Dilemma for financial accounting

You have recently been hired as the assistant controller for Stanton Temperton Corporation, which rents building space in major metropolitan areas. Customers are required to pay six months of rent in advance. At the end of 2012, the company's president, Jim Temperton, notices that net income has fallen compared to last year. In 2011, the company reported before-tax profit of $330,000, but in 2012 the before-tax profit is only $280,000. This concerns Jim for two reasons. First, his year-end bonus is tied directly to before-tax profits. Second, shareholders may see a decline in profitability as a weakness in the company and begin to sell their stock. With the sell-off of stock, Jim's personal investment in the company's stock, as well as his company operated retirement plan, will be in jeopardy of severe losses. After close inspection of the financial statements, Jim notices that the balance of the Unearned Revenue account is $120,000. This amount represents payments in advance from long-term customers ($80,000) and from relatively new customers ($40,000). Jim comes to you, the company's accountant, and suggests that the firm should recognize as revenue in 2012 the $80,000 received in advance from long-term customers. He offers the following explanation: "First, we have received these customers' cash by the end of 2012, so there is no problem about their ability to pay. Second, we have a long-term history of fulfilling our obligation to these customers. We have always stood by our commitments to our customers and we always will. We earned that money when we got them to sign the six-month contract."

Discuss the ethical dilemma you face.

Operation Research, Management Studies

  • Category:- Operation Research
  • Reference No.:- M929076

Have any Question? 

Related Questions in Operation Research

For the effective execution of intelligent transportation

For the effective execution of Intelligent Transportation System (ITS) and Information Technology (IT) advancements, the Transit Enterprise Architecture and Planning (TEAP) Framework venture has tried to furnish travel o ...

Q1 explain the scope of operations researchnbspq2 what are

Q1. Explain the Scope of Operations Research.  Q2. What are the Features of Operations Research? Q3. Explain the Monte Carlo Simulation. Q4. Explain the characteristics and constituents of a Queuing system. Q5. What do y ...

Prepare a report on the impact of purchasing strategies on

Prepare a report on "The impact of Purchasing Strategies on Performance of Organization's Performance: A Case of Construction Industry in Australia" Couple of contents in the table is explained below, like what you have ...

Operations research - projectintroduction1 the problems

Operations Research - Project Introduction 1. The problems should be formulated as Mixed Integer-Linear Programming problems and computational results obtained using AMPL where necessary. Do not try to use the in-built A ...

Use the following article on qualitative approaches written

Use the following article on qualitative approaches written by Kahlke (2014), to answer the following questions They note how in the development of qualitative research, three major methodologies are discussed most frequ ...

Regression line drawn as yc1075x when x was 2 and y was 239

Regression line drawn as Y=C+1075x, when x was 2, and y was 239, given that y intercept was 11. calculate the residual

Advanced diploma of businessestablish amp maintain

Advanced Diploma of Business Establish & Maintain Strategic Networks Assessment Tasks 1: Description: Strategic networks could be a valuable source of information, expertise and competitive advantage for organisations, o ...

Q1 how easy do you find it to contact usq2 how do you rate

Q1. How easy do you find it to contact us? Q2. How do you rate availability of the following services from ESD? Use the following rating: 1 -> Poor 2 -> Average 3 -> Good 4 -> Very Good 5 -> Excellent f) Pest Control & F ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate