Date September 4, 2020 Managerial Accounting

Assignment no 2

Name: Muhammad Areeb (19P01954)

Section C1

1-20
a) Innovation
b) Cost and efficiency and quality
c) Time
d) Time and cost and efficiency
e) Cost and efficiency
1-21
a) Time and cost and efficiency
b) Time, quality, and cost and efficiency
c) Quality and cost and efficiency
d) Innovation and quality
e) Cost and efficiency
1-26
Mendez's ethical responsibility include the following:
Competence, Confidentiality, Integrity, Credibility
Mendez' ethical standard in current dilemma are integrity, competence, and credibility Utilizing
the honesty standard, Mendez should do obligations ethically/morally and judgement. Mendez
play out her expert obligations as per applicable laws, guidelines, and specialized norms and give
choice help data that is exact. Validity requires that Mendez report data reasonably and
dispassionately and reveal lacks in inward controls in conformance with authoritative approach
or potentially material law. Mendez should decline to book the $200,000 of deals until the
merchandise are delivered. Both monetary bookkeeping and the executives bookkeeping
standards keep up that deals are not finished until the title is moved to the purchaser.
2. Declining to follow Dalton's requests. On the off chance that Dalton endures, the episode
ought to be accounted for to the corporate regulator. Backing for line the executives ought to be
wholehearted, however it ought not need deceptive lead
1-27
1. Ethical duties of Hannah are all around summed up. Zones of Ethical responsibilities are
incorporated as below in five points:
Competence, Confidentiality, Integrity and Credibility
The moral guidelines of ethics are identified with Hannah present dilemma are integrity,
competence and credibility. Utilizing the integrity standard, Hannah should complete obligations
of duties the ethically, and transfer both negative and positive data, proficient decisions just as
thinking. Hannah play out her professional duties as obligations in accordance with significant
laws, guidelines, and technical standard, transferring a valid information that supports the
decision making. Validity requires that Hannah report information justly, objectively, and reveal
insufficiencies in internal controls in conformance with firm policies/ implementable law and
regulations. Hannah should utilize her expert judgment to choose if upgrading the packing
materials is incorporating with the accounting standards. She ought not take a choice exclusively
based on avoiding overhead cost allocation
2. Hannah ought to examine her interests with Myers. Any overhead not assigned to Blakemore
would be given to different divisions of Eastern Glass and Window. Hannah might need to
consider counseling the IMA for moral direction. Backing for line the board ought to be
wholehearted, however it ought not involve unethical conduct.
1-31
1. Cost-benefit approach
2. Behavioral and technical considerations
3. Different costs for different purposes
4. Cost-benefit approach
5. Behavioral and technical considerations
6. Cost-benefit approach
7. Behavioral and technical considerations
8. Different costs for different purposes
9. Behavioral and technical considerations

1-32
1. Cost-benefit approach
2. Behavioral and technical considerations
3. Different costs for different purposes
4. Cost-benefit approach
5. Different costs for different purposes
6. Cost-benefit approach
7. Different costs for different purposes
1-35
The potential inspirations for the snack foods division needing to take end-of-year activities
include: Promotion opportunity and job security Top management of Daniel Foods probably will
see those division supervisors who convey high reported income development rates just like the
best possibilities for advancement. Division supervisors who convey unwelcome surprises‖ might
be seen as less skilled Management incentives: Daniel Foods may have a division reward plot
dependent on one-year reported division income. Efforts to front-end revenue into the current
year or move costs into the following year can expand this reward. Retain division autonomy. In
the event that top management of Daniel Foods receives a management by exceptional approach,
divisions that report sharp decreases in their profit development rates may draw in a sizable
increment in top management oversight.
1-36
1) The possible motivations for Controller Sophie Gellar to modify the division ‘s year-end
earnings are as follows: (i) Job security and promotion: The company’s CFO is likely to
reward her for meeting the company’s performance expectations. Alternately, Gellar may be
penalized, perhaps to the extent of losing her job if the division ‘s performance expectations
are not met. (ii) Management incentives: Gellar ‘s bonus may be based on the division ‘s
ability to meet certain profit targets. If the House and Home division has already met its
profit target for the year, the Controller may personally benefit if new printing equipment is
sold off and replaced with the discarded equipment that no longer meets current safety
standards, or if operating income is manipulated by questionable revenue and/or expense
recognition.
2) The overarching principles of the IMA Statement of Ethical Professional Practice are
Honesty, Fairness, Objectivity and Responsibility. The statement ‘s corresponding Standards
for Ethical Conduct require management accountants to abide by the following principles: 1)
Perform professional duties in accordance with relevant laws, regulations, and technical
standards. 2) Refrain from engaging in any conduct that would prejudice carrying out duties
ethically. 3) Communicate information fairly and objectively. 4) Disclose all relevant
information that could reasonably be expected to influence an intended user ‘s understanding
of the reports, analyses, or recommendations. Several year-end actions are clearly are in
conflict with the statement ‘s principles and required standards, and should be viewed as
unacceptable. (c) Subscription revenue received in December in advance for magazines that
will be sent out in January or a later date is a liability. Depicting it as revenue falsely
represents next year ‘s revenue as this year ‘s revenue. (d) Revising the estimate for pension
liability and expense would violate Generally Accepted Accounting Principles unless the
pension liability is currently overstated. Recording this transaction would result in an
overstatement of income and could potentially mislead investors. (e) Booking advertising
revenues that relate to February in December falsely represents next year ‘s revenue as this
year ‘s revenue. The other year-end actions occur in many organizations and fall into the gray
to acceptable area. Much depends on the circumstances surrounding each one as witnessed
below: (a) Cancelling three of the division ‘s least profitable magazines, resulting in the
layoff of thirty employees. While employee layoffs may be necessary for the business to
survive, the layoff decision could result in economic hardship for those employees who lose
their jobs, as well as result in employee morale problems for the rest of the division. Most
companies would prefer to avoid causing hardship for their existing employees due to layoffs
unless absolutely necessary for the survival of the business as a whole. (b) Selling the new
printing equipment that was purchased in February and replacing it with discarded equipment
from one of the company’s other divisions. The previously discarded equipment no longer
meets current safety standards. Again, while this method may result in a short-term solution
for the Controller and the Production Manager personally, this decision may actually harm
the corporation financially as a whole, not to mention the potential resulting injuries to
production workers from hazardous equipment. This method would be also be ethically
 questionable, and would likely violate the IMA ‘s ethical standards of integrity and
credibility. (f) Delaying maintenance on production equipment that was scheduled for
October until January. Performing regular scheduled maintenance is important for the safe
and efficient operation of production equipment. While a three-month delay may not seem
significant, delaying maintenance may put the production employees at risk of physical harm,
and put company at financial risk should the equipment malfunction and cause injury.
Furthermore, failure to keep a regular maintenance schedule may void the warranties on the
equipment. The Standards of Ethical Behavior require management accountants to
communicate information fairly and objectively and to carry out duties ethically.
3) Gellar should directly raise her concerns with the CFO, especially if the pressure from the
CFO is so great that the only course of action on the part of the Controller is to resort to
unethical behavior. If the CFO refuses to change his direction, the Controller should raise
these issues with the CEO, and then the Audit Committee and the Board of Directors, after
informing the CFO that she is doing the same. The Controller could also initiate a
confidential discussion with an IMA Ethics Counselor, other impartial advisers, or her own
attorney. Under extreme circumstances, the Controller may want to resign if the corporate
culture of Phoenix Press is to reward executives who take year-end actions that the Controller
views as unethical and possibly illegal
1-37
The general standards of the IMA Statement of Ethical Professional Practice are Honesty,
Fairness, Objectivity, and Responsibility. (1) • Perform proficient obligations as per pertinent
laws, guidelines, and technical norms/standards. (2) Refrain from participating in any lead that
would bias completing obligations ethical. (3) Communicate decently, unbiasedly and
objectively. (4) Disclose all pertinent data that could sensibly be relied upon to impact a
proposed client's comprehension of the reports, investigations, or proposals.
A couple of the proposition made by Armstrong's staff are clearly in difficulty with the
declaration's guidelines and required standards and should be viewed as unacceptable
a) Pay close by specialists to "guarantee" the ramin used by CI as acceptable. It isn't sure whether
the ramin would without a doubt be sustainable or not. If the amount given could be seen as a
bribe, the firm would be indulged to encroach upon the Foreign Corrupt Practices Act.
Information on such an encroachment of law would be seen as an encroachment of master ethics.
c) Record executive year-end bonus compensation accrued for the current year when it is paid in
the next year after the December fiscal year-end. GAAP requires expenses to be recorded
(accrued) when incurred, not when paid (cash basis accounting). Therefore, failure to record the
executives ‘year-end bonus would violate the IMA ‘s standards of credibility and integrity.
f) Compel current clients to take early conveyance of goods and service before the year's end
with the goal that more income can be accounted for in the current year financial statement. This
strategy, regularly known as channel stuffing, simply brings about moving future period incomes
into the current time frame. The exaggeration of income in the current time frame may deceive
investor ‘s to believe that the company’s financial well-being is better than the actual results
achieved. This training would disregard the IMA's norms of credibility and integrity. Channel
stuffing is oftentimes viewed as a deceitful practice.
i). See bargains earnings on orders got at this point not sent as of the year's end. GAAP
anticipates that compensation should be recorded (accrued) when the four proportions of pay
revenuer is recognition have been met:
1. The association has completed an important portion of the creation and sales effort.
2. The proportion of profit/revenue can by fairly assessed.
3. The noteworthy portion of the costs has been achieved, and the remainder of the costs can be
reasonably surveyed.
4. The possible assortment of the money is sensibly guaranteed.
Since rules 1 and 3 have not been met at the time the request is set, the income ought not be
perceived until after year-end. Along these lines, recording the following year's income in the
current year would be an infringement of GAAP and would misrepresent income. This would be
an infringement of the IMA's guidelines of believability and respectability and might be viewed
as false
Three of the suggestions appear to be acceptable:
d) Customers could then gauge the work benefits against the negative ecological impacts of the
organization's activities.
e. Upgrade upholstered furniture to supplant ramin contained inside with more affordable reused
plastic. Innovative changes in item configuration utilizing reused materials will permit CI to
address supportability worries just as ensure organization benefits.
g) Begin purchasing viable North American hardwoods and sell the Indonesian wood assistant.
Start a plant a tree‖ displaying program, by which the association will plant a tree for every
family thing sold. While this course of action would extend cost of materials and the worth CI
must charge for its thing, arrangements and advantages may not diminish if buyers see the
assessment of sensibility and corporate social commitment.
The opposite end year activities happen in numerous associations and fall into the dark to
satisfactory region. Much relies upon the conditions encompassing every one, in any case, for
example, the accompanying:
b. Make profound slices in valuing through the year's end to create extra income. Once more, this
is just a momentary strategy to improve the current year's budgetary outcomes. Financial
specialists might be content in the short run, yet over the long haul, the new transportation
organization will see decreased edges from these activities.
h. Sell-off production equipment preceding year-end. The deal would bring about one-time picks
up that could balance the organization's slacking benefits. The possessed hardware could be
supplanted with rented gear at a lower cost in the current year. While this strategy doesn't really
abuse the IMA's code of moral principles, it might be just a momentary strategy to improve the
current year's money related outcomes. Armstrong should gauge his alternatives in the long haul
to settle on the savviest choice for his organization
2. It is conceivable that any of the year-end‖ exercises that fall into the gray zone may be
valuable for theorists, dependent upon the trustworthy verification that reinforces the
organization decision. For example, overriding had gear with leased equipment may achieve both
transient increments for the association and long stretch cost decline. Accepting this is the
situation, this decision would be to the best favorable position of the theorists. In case the
decision only results in transient increases, more noteworthy costs as time goes on, by then the
decision may not be in the best long stretch energy of the association's theorists and should not
be realized only to prop up transitory benefit. The decisions that clearly misuse the IMA code of
good standards (a, c, f, and I) would never be to the best preferred position of the theorist. These
decisions would achieve beguiling spending outlines and could achieve the demise of the
association or even in criminal allegations, much the same as the case with associations, for
instance, Enron and WorldCom. If Armstrong demands that the organization clerk take any of
the exercises that are clearly unscrupulous, he should raise this issue with the seat of the Audit
Committee in the wake of enlightening Armstrong that he is doing all things considered. If
Armstrong notwithstanding everything requests the organization accountant taking these
exercises, he should leave rather than participate in untrustworthy direct. It is possible that any of
the year-end‖ actions that fall into the gray area may be good for investors, depending on the
credible evidence that supports the management decision. For example, replacing owned
equipment with leased equipment may result in both short-term gains for the company and long-
term cost reduction. If so, this decision would be in the best interest of the investors. If the
decision only results in short-term gains, but higher costs in the long-run, then the decision may
not be in the best long-term interest of the company’s investors and should not be implemented
solely to prop up short-term earnings.