ACCOUNTING-ACT 2200 PROJECT: CASE IN TECHNICAL AND ETHICAL ISSUES OF FINANCIAL ACCOUNTING

QUESTION

ACT
2200 PROJECT: CASE IN TECHNICAL AND ETHICAL ISSUES OF FINANCIAL ACCOUNTING
For the following real world accounting case, you will
provide a Case Analysis from the
perspective of the Accountant that analyzes both the technical and ethical accounting
issues present in the case and proposes a solution based on these
considerations.
BE SUREto read the instructions
below the case thoroughly, as they lay out exactly what is required. Also, it is IMPERATIVEthatyou read
the accompanying rubric, on which
your project grade will be based, so that you understand the exact expectations set forth to achieve
a high score.
Keep in mind that I am looking for a WELL-WRITTEN, PROOFREAD, WELL-ORGANIZED, HIGH QUALITYreport that
shows a thorough understanding of the accounting issues faced. The report has no specific length requirement
as long as you are sure to address all considerations of case.
CASE INFORMATION: MAVEN
MAGAZINE COMPANY
You are an
Accountant for the South Florida regional office of Maven Magazine Company. Jack
Jones, your boss, is the Regional Manager of this office. As the Regional Manager, his pay package
includes a base salary, commissions, and a bonus when his region sells new
policies in excess of its quota. Jack
has been under enormous pressure lately, stemming largely from two factors. First, he is experiencing mounting personal
debt due to hospital bills of a sick family member. Second, compounding his worries, his region’s
sales of magazine subscriptions have dipped below the normal quota for the
first time in years.
You have been working for Jack
for three years, and like everyone else in the office, you consider yourself
lucky to work for such a supportive boss. You also feel great sympathy for his personal
problems over the last few months. In
your position as Accountant for the regional office, you are very aware of the
drop in new subscription sales and the impact this will have on the Regional Manager’s
bonus. While you are working on the
year-end financial statements, Jack stops by your office.
Jack asks you to change the
manner in which you are planning to account for a new large subscriptions sale
made to a big customer. A check for the subscriptions,
substantial in amount, came in the mail on December 31, the last day of the reporting
year; however, the related magazines will not start to be delivered to the
customer until January of the next year. Originally, you had planned to deposit this
check and book an entry deferring the recognition of revenue until next
year. But when Jack approaches you, he
says, “Hey, we have the money this year, so why not count it as revenue this
year? I never did understand why you
accountants are so picky about these things anyway. I’d like you to change the way you record this
transaction. Instead, I want you to recognize
the subscriptions revenue this year. And
anyway, I’ve done favors for you in the past, and I am asking for such a small
thing in return.” With that, he leaves your office.
Instructions:
Technical:In a thorough Case
Analysis, first analyze the technical accounting issue here by identifying and
explaining the effects of both transaction alternatives (the original way and
the way proposed by Jack) on the overall Accounting Equation (on both specific
accounts and on overall assets, liabilities, and stockholders’ equity), and on
both the Income Statement and Balance Sheet (on specific accounts and on
overall net income and on assets, liabilities, and stockholders’ equity). Then, explain how these Income Statement and
Balance Sheet effects of both alternatives would be perceived by specific
financial statement users, being sure to address their specific uses and
related perception effects.
Ethical:Then, explain why
or why not you, the Accountant in this case, are faced with an ethical dilemma,
describing the nature of any internal conflict you may be facing and the
difficulty you may have making a decision given this conflict. Secondly, identify and explain any potential parties
(including Jack and yourself) who could be impacted by your decision, and how
these considerations affect your ethical dilemma.
Recommendation:Lastly, based on
these considerations, recommend and justify the course of action you would take
as the Accountant in this case, making sure you cite the specific technical and
ethical considerations that led you to this decision.

YOU
WILL BE GRADED USING THE FOLLOWING RUBRIC, SO BE SURE TO COMPLETE YOUR PROJECT
ACCORDING TO THE FOLLOWING POINT GUIDELINES TO MAXIMIZE YOUR SCORE:

Name of Student:

Course:
ACT 2200

Date:

Lead
Professor:Litt

Instructional
Specialist:

TITLE
OF RUBRIC:Case in Technical and Ethical
Issues of Accounting

LEARNING
OUTCOME/S: CC5:Recognize the impact of basic business transactions on
accounts and financial statements;
CC
7.Demonstrate effective
written communication using proper organization, structure, grammar,
punctuation and spelling including the use of appropriate technologies; CC8.
Recognize ethical issues in
business.

PURPOSE:
To utilize technical accounting
knowledge and ethical considerations to critically assess a real world
business scenario and generate an effective recommendation.

VALIDITY:
Critical assessment and
recommendations based on Generally
Accepted Accounting Principles as promulgated by the Financial Accounting Standards Board; Ethical assessments based
on AICPA’sCode of Professional
Conduct; Writing criteria based on APA
standards.

COMPANION
REFERENCES:ACT 2200
Course Textbook; APA Style Manual

Earning maximum points in each box in ‘PROFICIENT’ column
and / or
points in columns to the right of ‘PROFICIENT’ meets
standard.

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Performance Criteria

Missing
(0 points)

Developing
(2 points)

Proficient
(3.5 points)

Accomplished
(4 points)

Exemplary
(5 points)

Score

Analyze the effects of transaction alternatives on the Accounting
Equation
(CC5)

Does
not attempt to analyze the effects of either alternative on the Accounting
Equation

Attempts
but does not accurately analyze the effects of either alternative on the
Accounting Equation

Analyzes
the effects of each alternative on the Accounting Equation partially accurately
OR accurately analyzes the effect of only one alternative on the Accounting
Equation

Accurately
analyzes the effects of both alternatives on the Accounting Equation, citing
specific accounts OR overall effects on assets, liabilities, and
stockholders’ equity

Accurately
analyzes the effects of both alternatives on the Accounting Equation, citing
specific accounts and overall effects on assets, liabilities, and
stockholders’ equity

Analyze the effects of transactions alternatives on the
Income Statement and Balance Sheet
(CC5)

Does
not attempt to analyze the effects of either alternative on the Income
Statement or Balance Sheet

Attempts
but does not accurately analyze the effects of either alternative on the
Income Statement and Balance Sheet

Analyzes
the effects of each alternative on the Income Statement and/or Balance Sheet
partially accurately OR accurately analyzes the effect of only one
alternative on these statements

Accurately
analyzes the general effects of both alternatives on the Income Statement and
Balance Sheet.

Accurately
analyzes the effects of both alternatives on the Income Statement and Balance
Sheet, citing specific accounts and overall effects on net income and on assets,
liabilities, and stockholders’ equity

Describe the effects of transactions on the perceptions of
users of the Income Statement and Balance Sheet
(CC5)

Does
not attempt to describe the effects of either alternative on the perceptions
of financial statement users

Attempts
but does not accurately describe the effects of either alternative on
perceptions of financial statement users

Describes
the effects of each alternative on the perceptions of users partially accurately
OR accurately analyzes their perceptions based on only one alternative

Accurately
describes the general effects of both alternatives on perceptions of
financial statement user

s

Accurately
describes the effects of both alternatives on perceptions of users,
thoroughly describing each user and the manner in which their perceptions
would be affected

Identify the ethical dilemma faced in a business situation
(CC8)

Does
not recognize or acknowledge that an ethical dilemma exists in this case

Attempts
but does not accurately identify the key ethical issues deriving the ethical
dilemma faced in this case

Accurately
identifies some key ethical issues deriving the ethical dilemma faced in this
case

Accurately
identifies the key ethical issues and ethical dilemma faced in this case,
generally describing its nature

Accurately
identifies the key ethical issues and ethical dilemma faced in this case,
clearly and thoroughly explaining the conflict present and the difficulty of
considerations to be made

Explain the potential effects of a decision on any parties
who could be affected
(CC8)

Does
not explain any potential effects on anyone who could be affected by the
decision to be made in this case

Attempts
but does not accurately explain the key potential effects on parties who
could be affected by the decision to be made in this case

Accurately
explains some key potential effects on parties who could be affected by the
decision to be made in this case

Accurately
explains the key potential effects on parties who could be affected by the
decision to be made in this case, generally describing their nature

Accurately
explains the key potential effects on parties who could be affected by the
decision to be made in this case, clearly and thoroughly outlining the cause
and effect relationships and related difficult considerations to be made

Recommends effective actions based on technical
considerations
(CC5)

Does
not recommend a course of action

Recommends
but does not justify a course of action

Recommends
and somewhat justifies a course of action based on technical considerations
made

Recommends
and thoroughly justifies a course of action based on technical considerations
made

Recommends
and comprehensively justifies recommended course of action based on technical
considerations made

Recommends effective actions based on ethical
considerations
(CC8)

Does
not recommend a course of action

Recommends
but does not justify a course of action

Recommends
and somewhat justifies a course of action based on ethical considerations
made

Recommends
and thoroughly justifies a course of action based on ethical considerations
made

Recommends
and comprehensively justifies recommended course of action based on ethical
considerations made

Writes at the baccalaureate level
(CC7)

Does not write coherently; does not use appropriate grammar or
spelling
(numerous major errors).

Writes somewhat coherently; uses appropriate grammar or spelling
sometimes
(several major errors).

Writes
somewhat clearly and consistently;
coherently
phrases sentences;
generally
uses appropriate format, grammar, and punctuation
(a
few major and minor errors)

Generally
writes clearly and consistently;
clearly
phrases sentences;
generally
uses appropriate format, grammar, and punctuation
(some
minor errors)

Writes
clearly and consistently throughout the document;
clearly
phrases sentences that flow smoothly;
uses appropriate format, grammar, and
punctuation, (very few minor or no errors)

CASE POINTS:

FINAL CASE GRADE (CASE POINTS/40):

Comments:
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ANSWER:

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