Professional Documents
Culture Documents
ACC280 ACC 280 Week 5 Assignments From The Readings
ACC280 ACC 280 Week 5 Assignments From The Readings
You are the assistant controller responsible for general ledger accounting at Riverside Bottlin
Your organization has a big loan from an insurance company.
The loan contract mandates that the company’s cash account balance be kept at $200,000 o
At June 30 the cash balance is $80,000, which you report to Gena Schmitt, the financial vice p
Gena excitedly advises you to maintain the cash receipts book open for one more day for pur
Gena says, “If we don’t get that cash balance over $200,000, we’ll default on our loan agreem
They could close us down, put us all out of our jobs!”
Gena carries on, “I talked to Oconto Distributors (one of Riverside’s largest customers) this m
They said they sent us a check for $150,000 yesterday. We should receive it tomorrow.
If we include just that one check in our cash balance, we’ll be in the clear. It’s in the mail!”
Negative Effects:
If you do comply:
In case you do comply and are trapped, you could certainly be terminated and possibly jailed
Gena Schmitt will be dismissed too however there is no assurance of that in the real world.
You are the one who involved in falsification of document not her--she only proposed it.
Sometimes that is sufficient to bring someone up on allegation however not always.
Ethical Considerations
Your individual and professional honesty, integrity, professionalism, and trustworthiness are a
It would be dishonest to tell a lie, even if several could lose their careers in case the company
result in pain and suffering for the loved ones of the workers.
The most respectable method to manage the problem is to be clear and sincere with the insu
rating with them, certainly they will let a one day grace period. Particularly because you were
Although the figures are black and white, there are some grey areas in the business world. Th
to work with you. Additionallyo, when a customer is sincere with the agent (they probably de
simpler to clarify the problem and decide a deal. Maybe even modifying the agreement for th
grace period or something similar to that.
Alternatives
Get in touch with the bank who holds the loan. In case the account is in good ranking they m
Banks can be reasonable in case you have a good relationship with your contact and you are
the loan either since in that case they lose money, also.
Additionally, read again the loan contract to check for any probable mitigating elements. Ma
for.
your organization.
efaulting on
Douglas Company
Amount
Net Sales $1,549,035
Cost of Goods Sold $1,080,490
Gross Profit $468,545
9.09%
10,136.00
111,532.00
8.45%
10,136.00
120,000.00
Dillon Company
Income Statement
For the Years Ended December 31
2009
Net Sales (all on account) 600,000.00
Expendsitures
Cost of Goods Sold 415,000.00
Selling and Administrative 120,800.00
Interest Expenditure 7,800.00
Income Tax Expenditure 18,000.00
Total Expenditures 561,600.00
Net Income 38,400.00
Dillon Company
Balance Sheets
For the Years Ended December 31
2009
Assets
Current Assets
Cash 21,000.00
Short-term Investments 18,000.00
Accounts Receivable (net) 86,000.00
Stock 90,000.00
Total Current Assets 215,000.00
Plant Assets (net) 423,000.00
Total Assets 638,000.00
Saved Earnings
saved Earnings Balance 200,000.00
Add: Net Income 38,400.00
238,400.00
Minus: payouts 15,400.00
Saved Earnings Balance 223,000.00
2008
520,000.00
354,000.00
114,800.00
6,000.00
14,000.00
488,800.00
31,200.00
er 31
2008
18,000.00
15,000.00
74,000.00
70,000.00
177,000.00
383,000.00
560,000.00
110,000.00
20,000.00
130,000.00
80,000.00
210,000.00
150,000.00
200,000.00
350,000.00
560,000.00
2,400.00
1.48:1 1.48
0.86:1 0.86
6% 0.06
1.00 times 1.00
6% 0.06
26% 0.26
$0.26 0.26
76 times 76.17
40% 0.40
42% 0.42
8.23 times 8.23