Revenue Recognition and Ethics Kendall Square Research Corporation (KSR), located in Waltham, Massachusetts, produced high-speed computers and competed against companies such as Cray Research and Sun Microsystems. In August 1993, the common stock of KSR reached an all-time high of \($25.75\) a share; by mid- December, it had plummeted to \($5.25\). Its financial policies were called into question in an article in Financial Shenanigan Busters, Winter 1994, p. 3. The main charge was that the company was record- ing revenues before it was appropriate. KSR sold expensive computers to universities and other research institutions. Often, the customers took delivery before they knew how they might pay for the computers. Sometimes they anticipated receiving grants that would pay for the computers, but other times they had no prospective funding. KSR also recorded revenue when it shipped computers to distributors who did not yet have customers to buy them and when it sold computers contingent on future upgrades. Comment on the ethical implications of KSR's revenue recognition practices.