Question
Based on Chapter 5, Process Costing, answer the following questions:Your answers must be specific and use accounting analysis, concepts, and/or terminology. 1. How would inflating
Based on Chapter 5, Process Costing, answer the following questions:Your answers must bespecificand useaccountinganalysis, concepts, and/or terminology.
1. How would inflating theestimate of the percentage completionof ending Work-in Process (WIP) Inventory help a manager (who works in a lumber company) get a bonus that is based on division profit (HINT: Think about unit costs, Finished Inventory, and Cost of Goods Sold)?
2. If the percentage of completion of a year's ending WIP Inventory is not corrected, how will the misstatement affect the financial statements?
3. Is there any effect on next year's financial statements?
4. Is this an ethical issue in your view?Or is it irrelevant because no one is really hurt?
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
10th Edition
1119491630, 978-1119491637, 978-0470534793
