Discuss whether it is ethical to record revenue transaction

Assignment Help Accounting Basics
Reference no: EM131397232

Accounting Assignment

Grant Film Productions wishes to expand and has borrowed $100,000. As a condition for making this loan, the bank requires that the business maintain a current ratio of at least 1.50.

Business has been good but not great. Expansion costs have brought the current ratio down to 1.40 on December 15. Rita Grant, owner of the business, is considering what might happen if she reports a current ratio of 1.40 to the bank. One course of action for Grant is to record in December $10,000 of revenue that the business will earn in January of next year. The contract for this job has been signed.

Requirements

1. Journalize the revenue transaction, and indicate how recording this revenue in December would affect the current ratio.

2. Discuss whether it is ethical to record the revenue transaction in December. Identify the accounting principle relevant to this situation, and give the reasons underlying your conclusion.

Reference no: EM131397232

Questions Cloud

Explain the difference between leadership and power : Explain the difference between leadership and power. How can it be balanced in the workplace?
Explaining the significance of the evidence : Automated tools help you collect and report evidence, but you're responsible for doing which of the following?
What is a negative consequence of using given strategy : For the previous exercise, rather than increase the sample size, what else might you do to increase power? What is a negative consequence of using this strategy?
Obtain the pressure versus volumetric flow rate graph : Obtain the pressure versus volumetric flow rate graph for the system outlined (the graph must include the hydrostatic head, pressure drop across the valve and line losses).
Discuss whether it is ethical to record revenue transaction : Discuss whether it is ethical to record the revenue transaction in December. Identify the accounting principle relevant to this situation, and give the reasons underlying your conclusion.
Verify that power is approximately 0.56 : For n = 36, α = 0.025, σ = 8, and H0: µ ≤ 100, verify that power is 0.61 when µ = 103.- For n = 49, α = 0.05, σ = 10, and H0: µ = 50, verify that power is approximately 0.56 when µ = 47.
Finding a solution to the problem of handling time : This source is a policy claim because the community challenge every day on finding a solution to the problem of handling time. The reasons the author discussed that most of people work 40 hours a week, sleeping eight hours a night that makes 56 ho..
Prepare the swot analysis of the organization and offering : Select a new product or service that will be launched by either an existing organization or one you will create. You may seek your instructor's guidance on the company and product selected but it is not required to obtain your instructor's approva..
Determine the profit maximizing price for product or service : How would a manager determine the profit maximizing price for a product or service? Why is setting an appropriate price one of the most difficult decisions a manager makes?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Manufacturing operations for a total selling price

On January 15, 2013, Leno, Inc., which has a March 31, year-end, entered into a transaction to sell the land and building that contained its manufacturing operations for a total selling price of $19,750,000.

  Why do we spend so much of our resources fighting death

Why do we spend so much of our resources fighting death? What are the implications (for our economy, our resources) of a longer-lived population?

  Break-even monthly unit sales problem

Steckelberg Inc. produces and sells a single product. The selling price of the product is $150 per unit and its variable cost is $54 per unit. The fixed expense is $154,560 per month. The break-even monthly unit sales is ??

  Discuss the issues

The Container Store currently sells a “Bento Salad Bowl,” which it is  currentlymanufacturing in South Carolina. A representative from a company in Vietnam is offering to sell them for 15% less than the manufactured cost.

  Pritchard company manufactures a product that has a

pritchard company manufactures a product that has a variable cost of 30 per unit. fixed costs total 2000000 allocated

  You have been the partner in charge of the audit of pledge

you have been the partner in charge of the audit of pledge ltd for many years. you have never given a qualified audit

  Ccomp inc entered into the transactions listed below

ccomp inc. entered into the transactions listed below. prepare ccomps entries assuming use of the perpetual inventory

  What are the partners rights with respect to management

What are the partners rights with respect to management of the firm? Is the partnership bound to the contract with United? Do the partners split the first year's profits? If so, how much is each entitled to? Explain fully.

  Compute the ending inventory for dino radja company

Compute the ending inventory for Dino Radja Company for 2005 through 2010 using the dollar-value LIFO method

  Yu have been hired as a consultant to harveys agent phil

harvey alexander an all-league professional football player has just declared free agency. two teams the san francisco

  Modos company has deposited 4170 in checks received from

modos company has deposited 4170 in checks received from customers. it has written 1520 in checks to its suppliers. the

  The economic downturn has caused several companies to lay

the economic downturn has caused several companies to lay off workers leaving those workers who remain to do the work

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd