1-35 Professional ethics and end-of-year actions. Linda Butler is the new division controller of the snack-foods division of Daniel Foods. Daniel Foods has reported a minimum 15% growth in annual earnings for each of the past 5 years. The snack-foods division has reported annual earnings growth of more than 20% each year in this same period. During the current year, the economy went into a recession. The corpo- rate controller estimates a 10% annual earnings growth rate for Daniel Foods this year. One month before the December 31 fiscal year-end of the current year, Butler estimates the snack-foods division will report an annual earnings growth of only 8%. Rex Ray, the snack-foods division president, is not happy, but he notes that the "end-of-year actions" still need to be taken. Butler makes some inquiries and is able to compile the following list of end-of-year actions that were more or less accepted by the previous division controller: a. Deferring December's routine monthly maintenance on packaging equipment by an independent con- Tds0 b. Extending the close of the current fiscal year beyond December 31 so that some sales of next year aldianog tractor until January of next year. Hofo included in the current year. c. Altering dates of shipping documents of next January's sales to record them as sales in December of the current year. d. Giving salespeople a double bonus to exceed December sales targets. Deferring the current period's advertising by reducing the number of television spots run in December and running more than planned in January of next year. f. Deferring the current period's reported advertising costs by having Daniel Foods' outside advertising agency delay billing December advertisements until January of next year or by having the agency alter invoices to conceal the December date. g. Persuading carriers to accept merchandise for shipment in December of the current year even though they normally would not have done so. 1. Why might the snack-foods division president want to take these end-of-year actions? 2. Butler is deeply troubled and reads the "Standards of Ethical Behavior for Practitioners of Manage- ment Accounting and Financial Management" in Exhibit 1-7 (page 17). Classify each of the end-of-year o1actions (a-g) as acceptable or unacceptable according to that document. 3. What should Butler do if Ray suggests that these end-of-year actions are taken in every division of Daniel Foods and that she will greatly harm the snack-foods division if she does not cooperate and paint the rosiest picture possible of the division's results?

Q4. Mark Johns is the new division controller of the Frozen-Foods Division of Lindel Foods. Lindel Foods has reported a minimum 15% growth in annual earnings for each of the past 5 years. The Frozen-Foods Division has reported annual earnings growth of more than 20% each year in this same period. During the current year, the economy went into recession. The corporate controller estimates a 10% annual earnings growth rate for Lindel Foods this year. One month before the December 31 fiscal year-end of the current year, Johns estimates the Frozen-Foods Division will report an annual earnings growth of only 8%. Linda Kay, the Frozen-foods Division president, is not happy, but she notes that the "end-of-year actions" still need to be taken.Johns makes some inquiries and is able to compile a list of end-of-year actions that were more or less accepted by the previous division controller. Which one of the following proposed actions would clearly present an ethical dilemma to the company and…

General Manager of Marketing, has recently completed a sales forecast. She believes the company’s sales during the first quarter of 20x1 will increase by 10 percent each month over the previous month’s sales. Then Wilcox expects sales to remain constant for several months. Intercoastal’s projected balance sheet as of December 31, 20x0, is as follows: Cash$55,000 Accounts receivable 324,000 Marketable securities 15,000 Inventory 211,200 Buildings and equipment (net of accumulated depreciation) 634,000 Total assets$1,239,200 Accounts payable$241,920 Bond interest payable 6,250 Property taxes payable 6,000 Bonds payable (5%; due in 20x6) 300,000 Common stock 500,000 Retained earnings 185,030 Total liabilities and stockholders’ equity$1,239,200  Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated:Projected sales for December of 20x0 are $480,000. Credit sales typically are 75…

Charle's Furniture Store has been In business for several years. The firm's owners have described the store as a "high-price, high- service" operatlon that provides lots of assistance to Its customers. Margin has averaged a relatively high 29% per year for several years, but turnover has been a relatively low 0.6 based on average total assets of $800,000. A discount furniture Store is about to open in the area served by Charlie's, and management Is considering lowering prices to compete effectively. Required: a. Calculate current sales and ROI for Charlie's Furniture Store. b. Assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same ROl as Charlie's currently earns. c. Suppose you presented the results of your analysis in parts a and b of this problem to Charle, and he replied, "What are you telling me? If I reduce my prices as planned, then I have to Increase my…