One explanation about rights is that there is a difference between what we have the right to do and what the right thing to do is. Explain what you think is meant by this statement. Do you believe that if someone attacks your credibility on social media that gives you the right to attack them?
> It’s no fun accepting a position for your dream job and then red flags are raised that make you wonder about the culture of the company. Those are the thoughts of Donna Mason on January 18, 2022, as she prepares for a meeting with her a
> The CFO, King Bernard, of Blackswan Petfood, a large publicly traded manufacturer of organic gourmet dog and cat food, is getting ready for the quarterly conference call with major investors and financial analysts in two days. The King has been reviewing
> Exhibit 1 presents the fourth quarter press release of Allergan. Allergan is a global pharmaceutical company and a leader in a new industry model – Growth Pharma. Allergan’s product lines include Botox, Juvederm, Latis
> We can’t recognize revenue immediately, Paul, since we agreed to buy similar software from DSS,” Sarah Young stated. “That’s ridiculous,” Paul Henley replied. &acir
> Winners & Losers, Inc. (WLI) is a Nevada corporation with its principal place of business in Las Vegas. Its business model is to provide electronic sports betting in conjunction with a new law that legalized it in Nevada. The companyâ€
> Weatherford International PLC is a multinational Irish public limited company based in Switzerland, with U.S. offices in Houston, Texas. Weatherford’s shares are registered with the SEC and are listed on the NYSE. Weatherford files peri
> Ronnie Maloney, an audit partner for Forrester and Loomis, a registered public accounting firm in Boston, just received a meeting request from Jack McDuff, the chairman of the audit committee of Digital Solutions, one of his clients. The audit committee
> Diamond Foods, based in Stockton, California, is a premium snack food and culinary nut company with diversified operations. The company had a reputation of making bold and expensive acquisitions. Due to competition within the snack food industry, Diamond
> Maines and Wahlen state in their research paper on the reliability of accounting information: “Accrual estimates require judgment and discretion, which some firms under certain incentive conditions will exploit to report non-neutral accruals estimates wi
> In what some are suggesting is the worst financial reporting fraud since Enron, Wirecard filed for bankruptcy in June of 2020 after admitting that €1.9 billion Euros ($2.1bn U.S.) on its balance sheet (representing roughly 25% of its total assets) probab
> Travis McGee, a Senior Audit Manager for a Big Four Audit, Consulting, Tax and Data Analytics organization, has just spent the last year helping the firm rollout its new Artificial Intelligence (AI) based audit infrastructure. Travis is considered one of
> On January 30, 2018, General Electric (GE) announced that it was taking an after-tax charge of $6.2 billion in the December 31, 2017 financial statements and additional cash funding of $15 billion in statutory capital contributions to its insurance subsi
> Margaret Dairy is a CPA and the managing partner of Dairy and Cheese, a regional CPA firm located in northwest Wisconsin. She just left a meeting with a well-respected regional credit union headquartered in her hometown. Margaret was asked whether her fi
> Richard Lange, CPA, is a sole practitioner. The largest audit client in his office is Echo Park Sportswear (EP Sports). EP Sports is a privately owned company in South Bend, Indiana with a 12-person board of directors. Richard was hired by the audit comm
> Assume Ethan Lester and Vick Jensen are CPAs. Ethan was seen as a “model employee” who deserved a promotion to director of accounting, according to Kelly Fostermann, the CEO of Fostermann Corporation, a Maryland-based, largely privately held company that
> PwC violated SEC rule 2-02(b) of Regulation S-X and PCAOB Rule 3525 by engaging in improper professional conduct in violation of the independence rules on audit clients. This case is unique because the firm had mischaracterized certain nonaudit services
> On September 10, 2019, the Public Company Accounting Oversight Board (PCAOB) censured Marcum LLP and Alfonse Gregory on the basis of its findings that Marcum repeatedly violated PCAOB rules and standards over the course of four years by failing to satisf
> When Karen Ward started at Ernst & Young in 2013, only four senior managers in her division were women. All the partners were men. This was a red flag, but she didn’t see it then but soon realized that EY’s lack of female leaders was no accident but the
> Joe Kang is an owner and audit partner of Han, Kang & Lee, LLC. As the audit of Frost Systems was reaching its concluding stages on January 15, 2022, Kang met with Kate Boller, the CFO, who is also a CPA, to discuss the inventory valuation of one its hig
> Do you agree with Thomas McKee's conception of earnings management as applied to (a) operational earnings management and (b) accounting earnings management?
> Katy Carmichael, CPA, was just promoted to audit manager in the technology sector at a large public accounting firm. She started at the firm six years ago and has worked on a number of the same client audits for multiple years. She prefers being placed o
> Family Games, Inc., is a privately owned company with annual sales from a variety of wholesome electronic games that are designed for use by the entire family. The company sees itself as family-oriented and with a mission to serve the public. However, du
> Lance Popperson woke up in a sweat, with an anxiety attack coming on. Popperson popped two anti-anxiety pills, laid down to try and sleep for the third time that night, and thought once again about his dilemma. Popperson is an associate with the accounti
> In the first three months of 2021, Johnson Pharmaceutical’s sales and earnings were declining, placing the company in financial distress. As a result, Johnson had begun the process of borrowing $1 million to stay afloat. Around the same time, Paul Leona
> Jerry Maloney, CPA has been working at Mason Pharmaceuticals for fifteen years. Mason is a Fortune 1000 company whose stock trades on the New York Stock Exchange. He came to Mason after starting his career in the audit practice of PwC working on clients
> In 2005, Tony Menendez, a former Ernst & Young LLP auditor and Director of Technical Accounting and Research Training for Halliburton, blew the whistle on Halliburton’s accounting practices. The fight cost him nine years of his life. Just a few months la
> On September 8, 2016, Wells Fargo announced it was paying $185 million in fines to Los Angeles city and federal regulators to settle allegations that its employees created millions of fake bank accounts for customers. It also agreed to pay $142 million i
> John Stanton, CPA, is a seasoned accountant who left his Big-4 CPA firm Senior Manager position to become the CFO of a highly successful hundred million-dollar publicly-held manufacturer of solar panels. The company wanted John’s expertise in the renewab
> What possessed a CEO to hype a product that didn’t work and lie to financial institutions, pharmacies, the government, and the public about it? Is it hubris; plain and simple? Or was there something nefarious going on? The case of Theranos, an once high-
> What prompted partners at KPMG to facilitate cheating on internal training exams? In 2018, Timothy Daly, a former lead engagement partner, solicited and received questions and answers to the examination from a colleague, who was a second audit partner on
> Needles talks about the use of a continuum ranging from questionable or highly conservative to fraud to assess the amount to be recorded from for an estimated expense. Do you believe that the choice of an overly conservative or overly aggressive amount w
> Leaving home for the first time and going off to college is an exciting and stressful time for tens of thousands of students across the U.S. each year. Leaving the familiarity of family, friends and community behind and entering an often much more divers
> “I’m sorry, Jen. That’s the client's position,” Travis said. “I just don’t know if I can go along with it, Travis,” Jen replied. “I know. I agree with you. But, Chefs Delight is our biggest client, Jen. They’ve warned us that they will put the engagemen
> You are the Controller for Mountain Manufacturing which produces specialized components used in the manufacturing of cell phones sold by Apple, Motorola, and Samsung. The company is located in Southglenn Colorado, a suburb of Denver. Demand for your prod
> Jenna was irritated after class today. A classmate, Ben, had argued about the need for social justice reform that included defunding the police. Jenna was offended by the comments in part because her father was a policeman. She spoke to others in her cir
> Cleveland Custom Cabinets is a specialty cabinet manufacturer for high-end homes in the Cleveland Heights and Shaker Heights areas. The company manufactures cabinets built to the specifications of homeowners and employs 125 custom cabinetmakers and insta
> Section 179 of the IRS tax code allows qualifying businesses to deduct the full cost of “eligible property” on their income taxes as an expense, rather than requiring the cost of the property to be capitalized and depreciated over its useful life. The pr
> Milton Manufacturing Company produces a variety of textiles for distribution to wholesale manufacturers of clothing products. The company’s primary operations are located in Long Island City, New York, with branch factories and warehous
> On October 5, 2017, New York Times Investigative reporters Jodi Kantor and Megan Twohey broke the story ‘Harvey Weinstein Paid Off Sexual Harassment Accusers for Decades.’ Harvey Weinstein is one of the most powerful and influential movie executives in
> Sam and John have been friends for 20 years. They met in college and worked together for 10 of the 20 years. During that time, each made a promise that if they won a lottery they would share the winnings 50:50. Even though they drifted apart over the yea
> Hailey Declaire, a CPA, just sent the tax return that she prepared for a client in the marijuana growing and distribution business, Weeds ‘R’ Us, to Harry Smokes the manager of the tax department. Harry had just fielded a phone call from the president of
> Relevance and faithful representation are the qualitative characteristics of useful information under SFAC 8. How does ethical reasoning enter into making determinations about the relevance and faithful representation of financial information?
> Veronica Betterman, a fifth-year accounting major at Anywhere University, wakes up in a cold sweat. Like many accounting majors, Veronica did an internship in public accounting the previous spring resulting in a full-time job offer with Anywhere CPAs to
> Ed Giles and Susan Regas have never been happier than during the past four months since they have been seeing each other. Giles is a 35-year-old CPA and a partner in the medium-sized accounting firm of Saduga & Mihca. Regas is a 25-year-old senior accoun
> What motivates a parent to bribe key people to get their kid admitted to a prestigious university? That is the ethical question of “Operation Varsity Blues.” In March 2019, the story broke of an alarming fraudulent scheme by parents to pay off middleman
> Some people believe that promise-keeping is the essence of ethical behavior. Do you agree?
> According to the website Indeed, one question to ask the interviewer when you are interviewing for a job is: "What are the characteristics of someone who would succeed in this role?" Why might you ask such a question?
> Do you think it is ethical for a prospective employer to investigate your social media footprint in making a hiring decision? What about monitoring social networking activities of employees while on the job?
> Why are Equity, Diversity and Inclusivity considered to be important for businesses today?
> Is there a difference between cheating on a math test, pocketing an extra $10 from the change given to you at a restaurant, and using someone else’s ID to get a drink at a bar?
> Is it ever appropriate to lie to someone? Explain why or why not using ethical reasoning. Give one example of when you believe lying might be justified.
> Explain the SEC rules and regulations applicable to the public disclosure of non-GAAP financial measures.
> There is an old industry joke that if you ask an accountant what is four plus four, they will tell you it's whatever you want it to be. Explain what might be meant by this statement.
> Cedargrove Cider processes and bottles apple cider for sale through retail and big box grocery outlets. It had no work in process on May 31 in its only inventory account. The company started 19,100 cases during June. On June 30, work in process is 4,000
> Barrett eSellers is an online retail store offering a variety of products. As a part of its business model, it offers free returns. The returns are processed at the Returns Processing Facility (RPF) near one of the air freight hubs. The RPF checks the re
> Refer to the example in Appendix B. The numbers in Exhibit 5.21 for the fifth, sixth, and seventh units were given. Required Using the formula Y = aXb and the data given in the problem, verify the labor time required and the cost amounts for the fifth, s
> Fountain Precision Products (FPP) manufactures high-technology measurement systems. The systems are both complex and unique in the sense that only a handful are sold, usually to a single customer’s specification. The last unit of model FPP-28X sold was t
> Winkleman Associates requires prospective recruits to take an examination that includes both computational and essay questions. It employs contract workers to grade the exams. Hiring of Winkleman recruits takes place four times per year, and a different
> Shrewsbury Technologies, which manufactures high-technology instruments for spacecraft, is considering the sale of a navigational unit to a private company that wishes to launch its own communications satellite. The company plans to purchase 8 units, alt
> Clarion Clinics operates a chain of 24-hour walk-in clinics. The administrator is trying to understand the variation in Clarion’s costs across the different clinics. The chief medical officer believes that the number of walk-in clients
> Refer to the information for Point Products in Exercise 5-54. The managers at Point Products are uncertain what to do with these costs estimation results. Specifically, they are uncertain which, if either, method (account analysis or regression analysis)
> Point Products produces field hockey balls, which are packaged in cases. The balls are produced in a single plant. Because of the nature of the production process at Point Products, overhead includes all labor costs. Data on production output (in cases)
> Belfast Export-Import Partners has a large staff of buyers and sales personnel who travel extensively on company business. The CFO is trying to manage travel costs for the sales staff and has collected monthly information from the past 24 months on sales
> How would cost accounting information help managers in a not-for-profit organization? Is it as important as in a publicly traded, for-profit firm?
> Talon Services offers standardized job counseling services. The company is planning a new service line targeted to active seniors who are retiring and looking forward to a new career. The service will sell for a flat $960 per client and will consist of a
> Refer to the data and results from Exercises 5-44 through 5-50 for Waveney DIY Centers. Managers at Waveney are unsure which estimate of store costs should be used when planning new stores and have asked you for a recommendation. Required Based on the re
> Refer to the information in Exercise 5-44 for Waveney DIY Centers. Required a. Use the high-low method to estimate the fixed and variable portions of store costs based on store area. b. The managers in the region are interested in opening a new store wit
> Waveney DIY Centers (WDC) operates a few dozen stores in the eastern United States. The stores are popular with home remodelers, contractors, and do-it-yourself customers. The managers at Waveney are interested in understanding what drives costs as well
> Refer to the data and results from Exercises 5-36 through 5-42 for Fiske Corporation. Managers at Fiske Corporation are unsure which estimate of factory costs should be used next quarter and have asked you for a recommendation. Required Based on the resu
> Refer to the information in Exercise 5-36 for Fiske Corporation. Required a. Use the high-low method to estimate the fixed and variable portions of factory costs based on machine-hours. b. Managers expect the plant to operate at 21,000 machine-hours next
> Fiske Corporation manufactures a popular regional brand of kitchen utensils. The design and variety have been fairly constant over the last three years. The managers at Fiske are planning for some changes in the product line next year, but first they wan
> Witherell Musum of Technology (WMT) provides the following data on the costs of maintenance and the number of visitors for the last four quarters: Required a. Use the high-low method to estimate the fixed cost of quarterly staffing and the staffing cost
> Kirby Fasteners supplies the electronics industry with accessories for cases, disc enclosures, and so on. Below are the costs and volumes for the past six months at its Plant #6: Required a. Use the high-low method to estimate the monthly fixed cost of p
> Leach Finishing makes various metal fittings for the construction industry. Three of the fittings, models X-12, X-24, and X-30, require grinding on a patented machine of which Leach has only one. The cost-of-production information for the three products
> How does a value income statement differ from a gross margin income statement? From a contribution margin income statement?
> Brandon Technology makes two models of a specialized sensor for the aerospace industry. The difference in the two models relates to the required accuracy of the sensor. The Standard model is used for most normal operations while the High-Performance mode
> Wing Sporting Goods (WSG) is a small company that makes two models of a metal baseball bat— Sport and Collegiate. Both models are produced on a single machine. The price and costs of the two models are The one machine that is used to pr
> ASA Tours operates a network of offices around the globe specializing in local tours given by local residents and academics. Depending on the year, it operates at between 60 and 70 percent of capacity, which consists of locals who meet the criteria requi
> Refer to the information in Exercise 4-42. A new customer has approached Rathbone Industries and asked if it could make an instrument for the customer’s medical testing equipment. If it chose to take on this work, Rathbone would not be
> Lantz Family Restaurant operates in a suburb of a major city. Recently, the managers at Lantz have noticed an increase in the use of delivery apps such as Grubhub and DoorDash by their customers. The average fee paid by Lantz for this service currently i
> Refer to the facts in Exercise 4-39. Harbortown management is concerned about future changes in material prices arising from volatility in the commodities market. Required At what unit costs for materials would HMP be just indifferent between making and
> Coram Audio makes wireless headphones. Each pair of headphones comes with a travel case. Since its founding, Coram has manufactured its own travel cases. Recently, Holmur Travel Gear (HTG), a local outfitter that manufactures and sells backpacks, tent ca
> Short Bakers makes baked goods for catered events and for sale at local grocery stores. The owner of Short Bakers believes that a new type of breakfast pastry would sell well for a price of $9 per dozen. Short estimates unit materials costs to be $4.25 f
> Mather, Inc. makes and sells enclosures for external hard drives. Mather management believes that a new model of enclosure made out of a hard plastic would sell well at a price of $17.00. Labor costs are estimated at $5.30 per unit and overhead costs wou
> Refer to the data for Nardin Outfitters in Exercise 4-27. Suppose Nardin’s capacity is limited to 5,300 per year. Chipman Outdoor Center will not accept any quantity other than the 500 tents in the order. Required a. What is the impact
> Why is it important to incorporate learning into cost estimates? Is learning only important in manufacturing?
> Refer to the data for Rowe Tool and Die (RTD) in Exercise 4-26. Suppose RTD’s capacity is limited to 50,000 units per quarter. Endicott will not accept any quantity other than the 10,000 units in the order. Required a. What impact would
> Schweizer Products produces smart thermostats for home heating, ventilation, and air-conditioning (HVAC) systems and markets them to vendors who sell them under their own label. The cost of one of its thermostats follows. French Road DIY Stores, a chain
> Alpena Corporation manufactures smartphone and tablet cases. The following is the cost of each unit. Decatur Devices has approached Alpena with an offer to buy 3,000 cases at a price of $17.50 each for its new specialty tablet designed for healthcare wor
> Dwight Furniture makes desks specially designed for small spaces, such as studio apartments and extended-stay hotels. Each desk sells for $110 (without chair). The cost of each desk follows: The local university is building a new dorm and asked Dwight fo
> Parkview Fish Tacos sells tacos for $4.50 each. The cost of each taco follows: One of Parkview’s regular customers asked the company to fill a special order of tacos at a selling price of $3.50 each for a youth basketball tournament at
> Nardin Outfitters has the capacity to produce 12,000 of its special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $900 per tent. The cost of producing and selling one tent follows: The co
> Pierson Pet Products produces two models of dog beds: Basic and Custom. Price, cost, and expected sales volume data for the two models are as follows: Required The total fixed costs for the company are $396,900. a. What is the anticipated level of profit
> Grixdale Tax Services prepares taxes for individuals. Grixdale offers a simplified pricing model with two alternatives for taxpayers: Standard Deduction (Standard) or Itemized Deductions (Itemized). Price and variable costs for the two services are liste
> Georgeland Cycles makes and sells two models of electric bicycles. The Commuter (a folding model) sells for $2,500 and the Tour-X (a fat-tire trail model) sells for $4,500. Unit variable costs for the Commuter are $1,750 and for the Tour-X, $3,200. Annua
> Gardendale Associates offers landscape consultations, where they provide design advice and plans to residential customers. A single consultation is priced at $750. The variable costs of a consultation total $330, consisting mostly of labor and supplies.
> What do the terms target cost and target price mean? Explain how they are developed.
> Preston Products produces a disinfecting liquid. The liquid is sold in one gallon containers and has the following price and cost characteristics. Preston Products is subject to an income tax rate of 21 percent. Required a. How many gallons must Preston
> Cruse Cleaning offers residential and small office cleaning services. An average cleaning service has the following price and costs. Cruse Cleaning is subject to an income tax rate of 22 percent. a. How many cleaning services must Cruse Cleaning sell in
> Grandville Fittings earns a quarterly operating profit of $1,500,000 and has an operating leverage of 1.8. Wheeler Works, Inc. earns a quarterly operating profit of $660,000 and has an operating leverage of 3.0. Quarterly revenues total $4,500,000 for Gr
