You have been hired as an intern to help Ingrid Theobald, the owner of Ingrid’s Instrument Rentals, evaluate how her business is going by using an Excel workbook. Ingrid has created a simple workbook with four worksheets, one for each school to which she rents instruments. She wants to know how much she is … Read more
NuComp Company operates in a state where corporate taxes and workers’ compensation insurance rates have recently doubled. NuComp’s president has just assigned you the task of preparing an economic analysis and making a recommendation relative to moving the entire operation to Missouri. The president is slightly in favor of such a move because Missouri is … Read more
Jumbo Airlines operates out of three main “hub” airports in the United States. Recently, Econo Airlines began operating a flight from Reno, Nevada, into Jumbo’s Metropolis hub for $190. Jumbo Airlines offers a price of $425 for the same route. The management of Jumbo is not happy about Econo invading its turf. In fact, Jumbo … Read more
Blake Romney became chief executive officer of Peters Inc. 2 years ago. At the time, the company was reporting lagging profits, and Blake was brought in to “stir things up.” The company has three divisions: electronics, fiber optics, and plumbing supplies. Blake has no interest in plumbing supplies, and one of the first things he … Read more
R. B. Dillman Company manufactures a high-tech component used in Bluetooth speakers that passes through two production processing departments, Molding and Assembly. Department managers are partially compensated on the basis of units of product completed and transferred out relative to units of product put into production. This was intended as encouragement to be efficient and … Read more
Pendleton Automotive Corp. is a medium-sized wholesaler of automotive parts. It has 10 stockholders who have been paid a total of $1 million in cash dividends for 8 consecutive years. The board’s policy requires that, for this dividend to be declared, net cash provided by operating activities as reported in Pendleton Automotive’s current year’s statement … Read more
Inc. magazine published an article by Jeffrey L. Seglin entitled “Would You Lie to Save Your Company?” It recounts the following true situation: “A Chief Executive Officer (CEO) of a $20-million company that repairs aircraft engines received notice from a number of its customers that engines that it had recently repaired had failed, and that … Read more
Ethics Case CT8.9 As its year-end approaches, it appears that Mendez Corporation’s net income will increase 10% this year. The president of Mendez Corporation, nervous that the stockholders might expect the company to sustain this 10% growth rate in net income in future years, suggests that the controller increase the allowance for doubtful accounts to … Read more
Nixon Wholesale Corp. uses the LIFO cost flow method. In the current year, profit at Nixon is running unusually high. The corporate tax rate is also high this year, but it is scheduled to decline significantly next year. In an effort to lower the current year’s net income and to take advantage of the changing … Read more
Vanessa Jones is the assistant chief accountant at IBT Company, a manufacturer of computer chips and cell phones. The company presently has total sales of $20 million. It is the end of the first quarter and Vanessa is hurriedly trying to prepare a trial balance so that quarterly financial statements can be prepared and released … Read more