49. Business Accounting
:Braun,Tietz Managerial Accounting, DVC 2nd Custom ed
Half page each discussion topic
M.K. Gallant is president of Kranbrack Corporation, a company whose stock is traded on a national exchange. In a meeting with investment analysts at the beginning of the year, Gallant had predicted that the company?s earnings would grow by 20% this year. Unfortunately, sales have been less than expected for the year, and Gallant concluded within two weeks of the end of the fiscal year that it would be impossible to ultimately report an increase in earnings as large as predicted unless some drastic action was taken. Accordingly, Gallant has ordered that wherever possible, expenditures should be postponed to the new year?including canceling or postponing orders with suppliers. Additionally, Gallant ordered the company?s controller to carefully scrutinize all costs that are currently classified as period costs and reclassify as many as possible as product costs. The company is expected to have substantial inventories at the end of the year.
In your own words, clearly and briefly answer the following questions on the MAL Discussion Board for your group by the due date. (Submission of your answers by Sunday before the due date results in 4 additional extra credit points.)
1. Why would reclassifying period costs as product costs increase the period?s reported earnings? (Be specific, example(s) will enhance the quality of your response.)
2. Do you believe Gallant?s actions are ethical? Why or why not? (Justify you answer with supporting logic or business perspective).
As a member of one of DVC’s student business clubs (Enactus/SIFE or Phi Beta Lambda), you have been invited to make a short presentation on a business topic. The proposed topics are: the Sarbanes-Oxley Act (SOX), International Financial Reporting Standards (IFRS) or Extensible Business Reporting Language (XBRL). Review Chapter 1 of your textbook and then select 1 of these topics and, using your own words, provide a brief summary AND commentary to your group which includes the history and/or use of SOX, IFRS, or XBRL in business today and how it impacts/interacts with managerial accounting. You can improve or embellish your posting with some internet research which you can cite or reference.
To receive maximum credit, a posting and response must be in your own words, well stated, and provide meaningful and thoughtful additional information. Citing outside sources, newspaper articles, etc. will result in higher points. While some of the topics may result in more subjective comments than others, always support your arguments where possible with facts, not just feelings or hearsay.