Reference no: EM133494940
Case: Chris P. Bacon is the chief accountant for CV Industries, a large manufacturing company. In addition to its normal business activities, the company has excess warehouse space that it rents out to local businesses. Because the typical renter is a small business, CV Industries requires renters to make lease payments for the entire rental period on the day the lease is signed. As a result, CV Industries typically reports a large unearned rent balance on its balance sheet.
After making adjusting entries for the current year, Chris prepares the adjusted trial balance and notices that the company's earnings will decline significantly. He presents the adjusted trial balance to the company's CFO, Antonio Beldin, who is concerned about the earnings decline. Mr. Beldin notices the large unearned rent balance and proposes making an additional end-of-period adjusting entry to recognize the entire unearned rent balance as revenue in the current period. Chris protests, reminding Mr. Beldin that the adjusting entry for unearned rent has already been made. Mr. Beldin assures Chris that his proposal is acceptable, reminding Chris that "because we have already received the cash, we have the right to recognize the revenue in the current period." He instructs Chris to make the additional adjusting journal entry. Chris is hesitant to follow these instructions, but he is sensitive to the company's emphasis on earnings growth and makes the adjusting entry as instructed.
Question 1. Is Chris behaving ethically? Please let us know why or why not?
Question 2. Who is affected by Chris's decision?
Question 3. Explain why adjusting entries needed at the end of an accounting period?
|
What is the amount of the net receivables on balance sheet
: The adjusting entry for bad debt expense was made in the amount of $6,000. What is the amount of the net receivables on the balance sheet
|
|
How the learning might be useful to you in the future
: how this week's topics were useful to your personal and professional development and how the learning might be useful to you in the future.
|
|
What responsibilities do museums have to cultures of origin
: What responsibilities do the museums have to the cultures of origin and to rectify the misdeeds of the past?
|
|
Reflect on what you understand this term obligation to mean
: Reflect on what you understand this term obligation to mean, especially in the applications: family, romantic relationship, community member, citizen/resident.
|
|
Explain why adjusting entries needed at the end
: Is Chris behaving ethically? Please let us know why or why not and Explain why adjusting entries needed at the end of an accounting period
|
|
Which famously adorned the ancient greek parthenon
: Which famously adorned the Ancient Greek Parthenon, are currently located in the British Museum, despite Greece's efforts to repatriate the sculptures.
|
|
Discuss how it can help build solutions to it businesses
: Do some research on emails, memos, letters, and reports. Report your findings and discuss how you would choose words differently for each type of communication.
|
|
What are the companys deadlines for filing its 10-k
: What are the companys deadlines for filing its 10-K, 10-Q, and 8-K? Why does the company need to file based on these specifications
|
|
What kind of listener were you at the concert
: What kind of listener were you at the concert? Why? What pieces were performed? What was the style of each of the pieces performed?
|