1...Ms. X, a friend of vours, overheard a discussion at work about changes her emplover wants to

make in accounting for uncollectible accounts. X knows little about accounting, and she asks you

to nel ma sense of what sne near. specaIy. sne asks yu th rences

the percentage-of-sales.

percentage-of-receivables, and the direct write-off methods for

uncollectible accounts.

Required:

In a letter of one page explain to Ms. X the three methods of accounting for uncollectible. Be sure

to discuss differences amone these methods.

2.... Ms. Y was just hired as the assistant treasurer of Dorchester Stores. The company is a specialty

chain store with nine retail stores concentrated in one metropolitan area, Among other things,

the payment of all invoices is centralized in one of the departments Y will manage. Her primary

responsibility is to maintain the company's high credit rating by paying all bills when due and to

take advantage of all cash discounts.

Mr. Z, the former assistant treasurer who has been promoted to treasurer, is training Y in her new

duties. He instructs Y that she is to continue the practice of preparing all checks "net of discount"

and dating the checks the last day of the discount period, "But," Z continues, we always hold the

checks at least 4 days beyond the discount period before mailing them. That way we get another

4 days of interest on our monev. Most of our creditors need our business and don't complain

And, if they scream about our missing the discount period, we blame it on the mail room or the

dost ofice. We've oniv lost one discount out of every hundred we that way.

does it. Bv the wav. welcome to our team!

Required:

al What are the ethical considerations in this case?

Ih) Who are the stakeholders that are harmed or beneftted in this situation?

(c) Should Ms. Y continue the practice started by Mr. 2? Does she have any choice?

1. Ms. X, a friend of yours, overheard a discussion at work about changes her employer wants to make in accounting for uncollectible accounts. X knows little about accounting, and she asks you to help make sense of what she heard. Specifically, she asks you explain the differences between the percentage-of-sales, percentage-of-receivables, and the direct write-off methods for uncollectible accounts. Required: In a letter of one page explain to Ms. X the three methods of accounting for uncollectible. Be sure to discuss differences among these methods. 2. Ms. Y was just hired as the assistant treasurer of Dorchester Stores. The company is a specialty chain store with nine retail stores concentrated in one metropolitan area. Among other things, the payment of all invoices is centralized in one of the departments Y will manage. Her primary responsibility is to maintain the company's high credit rating by paying all bills when due and to take advantage of all cash discounts. Mr. Z, the former assistant treasurer who has been promoted to treasurer, is training Yin her new duties. He instructs that she is to continue the practice of preparing all checks "net of discount" and dating the checks the last day of the discount period. "But," Z continues, "we always hold the checks at least 4 days beyond the discount period before mailing them. That way we get another 4 days of interest on our money. Most of our creditors need our business and don't complain. And, if they scream about our missing the discount period, we blame it on the mail room or the post office. We've only lost one discount out of every hundred we take that way. I think everybody does it. By the way, welcome to our team!" Required: (a) What are the ethical considerations in this case? (b) Who are the stakeholders that are harmed or benefitted in this situation? (c) Should Ms. Y continue the practice started by Mr.Z? Does she have any choice