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Vadim26 [7]
3 years ago
6

On January 20, 2017, Tamira Nelson, the accountant for Picton Enterprises, is feeling pressure to complete the annual financial

statements. The company president has said he needs up-to-date financial statements to share with the bank on January 21 at a dinner meeting that has been called to discuss Picton's obtaining loan financing for a special building project. Tamira knows that she will not be able to gather all the needed information in the next 24 hours to prepare the entire set of adjusting entries. Those entries must be posted before the financial statements accurately portray the company's performance and financial position for the fiscal period ended December 31, 2016. Tamira ultimately decides to estimate several expense accruals at the last minute. When deciding on estimates for the expenses, she uses low estimates because she does not want to make the financial statements look worse than they are. Tamira finishes the financial statements before the deadline and gives them to the president without mentioning that several account balances are estimates that she provided.
Required:
1. Identify several courses of action that Tamira could have taken instead of the one she took.
2. If you were in Tamira's situation, what would you have done?
Business
1 answer:
Nataliya [291]3 years ago
3 0

Answer:

this case tells us about some sort of pressures that accounts feel when financial statements are needed urgently

Explanation:

1) As for using low estimates, this step was wrong on her part. she should have been upfront in her estimates. for the items that she could not estimate there should have been an indication that such items were still under review, instead of doing what she did to give the financial estimate a good look. Using guesses or deliberately using low estimates was a bad idea, GAAP would never condone that.

She should have met with the president and let him know that finalization of the financial statements would not possible within the time frame that he has given. She could have also explain that such delays are normal and she would have given estimates of when the draft internal copy would be made available to him. such steps she took could have resulted in serious consequences for the company

2) I would not inflate or deflate the figures on purpose to make financial statements look better. If it is time to present the draft and final year-end financial statements I will have to tell the truth on the numbers and estimations used and also the reasons for that. i would have explained the constraints that i was facing. if i was still being pressurized by the president,  i would have no choice than to call it quits instead of going against the ethics of my profession, since there are both ethical and legal implications to not giving inaccurate financial statements.

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3 years ago
A company has only two divisions: division a and division
Sloan [31]

Answer – Division A

 

EXPLANATION’

 

Given for last year,

Division A made 60% of the company's total revenue.

Let the company’s total revenue for last year be x

60% of x = 0.6x

Division A made 0.6x last year

 

Also given for last year,

Division B made 40% of the company's total revenue.

If the company’s total revenue for last year is x

40% of x = 0.4x

Division B made 0.4x last year

 

For this year,

We are told that division A's revenue has decreased by 35%

Last year’s revenue was 0.6x

Division A’s revenue for this year = 0.6x – (35% of 0.6x)

= (100% of 0.6x) – (35% of 0.6x)

= (100% * 0.6x) – (35% * 0.6x)

= (100% - 35%) * 0.6x

= 65% * 0.6x

= 65/100 * 0.6x

= 0.39x

Therefore this year, Division A’s revenue is 0.39x

 

Again for this year,

We are told that division B's revenue has decreased by 5%

Last year’s revenue was 0.4x

Division B’s revenue for this year = 0.4x – (5% of 0.4x)

= (100% of 0.4x) – (5% of 0.6x)

= (100% * 0.4x) – (5% * 0.4x)

= (100% - 5%) * 0.4x

= 95% * 0.4x

= 0.38x

Therefore this year, Division B’s revenue is 0.38x

 

If Division A’s revenue is 0.39x, and Division B’s revenue is 0.38x; then Division A had higher revenue this year.

4 0
3 years ago
Cary is experiencing cash flow problems during the current year. Rather than foreclose an $80,000 business loan, his bank agrees
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Answer:d. $30,000

Explanation:

The reduction of loan amount from $80,000 to $50,000 means carry has gained the difference of $30,000 by paying less than the value of loan he has received.

On an overall analysis the net asset will improve from -$10,000 to $20,000 but the income from the loan reduction is $30,000 i.e,$80,000 minus $50,000.

6 0
3 years ago
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50k in 2018 what is it?
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Answer:

It means that 50,000 dollars was made in 2018

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The narrowest definition of the money supply (M1) includes:
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Answer:

c. cash, checking account balances, and travelers' checks.

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-M2: covers M1 and saving accounts and CDs.

-M3: it surrounds the larger deposits.

-MZM: finally, this indicates the money market deposits.

That’s why we could notice that M1 narrowly means the cash, checking account and travelers’ checks.

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