What are the possible consequences

Assignment Help Accounting Basics

Reference no: EM131914820

Problem

M.K. Gallant is president of Kranbrack Corporation, a company whose stock is traded on a national exchange. In a meeting with investment analysts at the beginning of the year, Gallant had predicted that the company's earnings would grow by 20% this year. Unfortunately, sales have been less than expected for the year, and Gallant concluded with two weeks of the end of the fiscal year that it would impossible to ultimately report an increase in earning as large as predicted unless some drastic action was taken. Accordingly, Gallant has ordered that wherever possible, expenditures should be postponed to the new year - including canceling or postponing orders with suppliers, delaying planned maintenance and training, and cutting back on end-of-the-year advertising and travel. Additionally, Gallant ordered the company's controller to carefully scrutinize all costs that are currently classified as period costs and reclassify as many as possible as product costs. The company is expected to have substantial inventories of work in process and finished goods at the end of the year. Comment on the following questions.

1) What is the ethical issue?

2) What are your options?

3) What are the possible consequences?

4) What should you do?

Reference no: EM131914820

Questions Cloud

What is the total cost of ending wip : The mixing department has 23,000 units and $106, 600 in costs for which to account. What is the total cost of ending WIP?

Relationships between manufacturers-international dealers : Summarize in detail Fites' article. In your summary, identify and describe the six principles and practices which Fites suggests that create tight relationships

Explain your thoughts on observing people eat in public : Observe two people of the same gender and one of the other. I want you to observe the following and also what it is that they add to their meal.

How might the castle doctrine be supported morally : Under the castle doctrine, recognized in more than 20 states, generally homeowners may use force- including deadly force-to defend themselves in their own home.

What are the possible consequences : What is the ethical issue? What are your options? What are the possible consequences? What should you do?

Categorial imperative perspectives : The ride-share gig economy is ethical or not. Use one of the ethical lenses (utilitarianism, virtue or categorial imperative perspectives) on uber/lyft for defe

Complete java method called getword : complete Java method called checkWord that takes a String parameter called word, returns nothing, and is declared to throw an Exception of type Exception

Was alitalia or marriott obligated to honor the low prices : The Italian national airline, Alitalia, was charging more than $5,000 for trans-Atlantic, round-trip, business class airfares in 2006, but by mistake.

How would the accounting for the awards change : How would the accounting for the awards change if the modification to the terms of the award was made on January 1, 2014, after awards have become fully vested?

User Account

All Pages