Business-Memo-For-Accounting-2301

"You have recentlybeen hired as the assistant controller for Stanton Corporation,which rents building space in major metropolitanareas. Customers are requiredto pay six months of rent in advance.At the end of 2016, the company's presidentnotices that net income has fallen $50,000compared to last year. This concernsthe president for two reasons. First,the year-end bonus for the employees is tied directly tonet income. Second, shareholders may see adecline in profitability as a weakness in thecompany and begin tosell their stock.

After close inspectionof the financial statements, the presidentnotices that the balance of the UnearnedRevenue account is $120,000. The presidentcomes to you, the company's accountant, and suggests that thefirm should recognize as revenue in2016 the $120,000 received in advance fromcustomers for rent to be provided in2017. The president offers thefollowing explanation: First, we have received thesecustomers' cash by the end of 2016, so there is noquestion about theirability to pay. Second, we have ahistory of fulfilling our obligation tothese customers. We earned that moneywhen we got them to sign thesix-month contract.

Required:

Draft aone-page response in the form of a business memo to your managerdiscussing your recommendation on the Presidents suggestionto recognize the$120,000 as revenuein 2016. Support your decision with addressingthe accounting issue, the partiesaffected and what factors you considered tomake your decision. Your memowill be graded based on the written communication, critical thinkingandethics rubrics.

This is due on the16th and they want it properly citedwith sources. Thanks

two attachments are given. actually that doesn't work but heres what they would have said:

Firstdraft:

"TO:

AliciaSmith,

DirectorofStudentServices

FROM:

JerryDoe,

OnlineWorkshopsDeveloper

DATE:February1,20

SUBJECT:

ProgramAssessment and ProposalI have attached my semester report to this email, but I also wanted to brieflytalk abouta solutionto aproblem we have hereat Richland.

Ourteachersquestion whetherstudent services really makea difference in grade outcomes.Theythink thatby addingservices such asonline workshopswe are making it harder for students tostay focused on homework for class.Obviouslythey are wrong.We design services that are supposed to help students succeed,notmake it more difficult. We have a hard enough time getting students to participate, and thisopinion among teachers ishurting everyone.My recommendation isnot only that we continueto develop more online services for ourstudents, but that wepressure teachers into supporting what we do. Perhapswe canconvinceadministrators to speak personally to them.Please let me know if you have any questions."

Final:

"TO:Alicia Smith,

DirectorofStudentServices

FROM:

JerryDoe,

OnlineWorkshopsDeveloper

DATE:

February1,20

SUBJECT

:

ProgramAssessment and Proposal I have attached mysemester report to this email, but I also wanted to briefly propose a solutionto a challengewe faceregarding supplemental services for students at Richland.There areteacherswhoquestion whetherstudent services really makea difference in gradeoutcomes. Thereis concern that spending time on these services is taking time away from thework studentsshould be doing for class.Perhaps by adding services such as online workshops totheir studentload we are actually making the challengeof succeeding in school more difficult.My analysis suggests, however,that students performbetter after participatingin onlineworkshops (and other services) that strengthen skills in suchthingsas timemanagement, criticalthinking, goal setting, and self-care. A statistical comparison between students who haveparticipated inthese workshops and students who havent shows asignificant difference insuccess rates (A-B-Cgrades in core classes): 93%versus 64%,respectively.

Even though thestudents participating in our online academic services are indeedtaking on a greater work load, these outcomes are convincing evidence that our services are promoting student success, not compromising it. My recommendation is not only that we continue todevelop more online services for our students, but thatwe reach out to our teachers with thismessage. We mighteven invite teachersto participate in our online workshops andgive usfeedback so they canhave first-hand experience of the value forstudents. In the attachedreport I have suggested some names of teachers whocould be asked to join us in thiseffort.

Please let me knowif you have anyquestions."