ETHICS CHALLENGE C3

Question #1

BTN 14-1 Assume that you are the managerial accountant at Infostore, a manufacturer of hard drives, CDs, and DVDs. Its reporting year-end is December 31. The chief financial officer is concerned about having enough cash to pay the expected income tax bill because of poor cash flow management. On November 15, the purchasing department purchased excess inventory of CD raw materials in anticipation of rapid growth of this product beginning in January. To decrease the companys tax liability, the chief financial officer tells you to record the purchase of this inventory as part of supplies and expense it in the current year; this would decrease the companys tax liability by increasing expenses.

Required

a. In which account should the purchase of CD raw materials be recorded?

b. How should you respond to this request by the chief financial officer?

Question #2

(Discussion 7-q3)-- What information is recorded on a job cost sheet? How do management and employees use job cost sheets? Explain in detail-150 words.

Question #3

BTN 15-2 Assume that you are preparing for a second interview with a manufacturing company. The company is impressed with your credentials, but it has several qualified applicants. You anticipate that in this second interview, you must show what you offer over other candidates. You learn the company is not satisfied with the timeliness of its information and its inventory management. The company manufactures custom-order holiday decorations and display items. To show your abilities, you plan to recommend that the company use a job order accounting system.

Required

In preparation for the interview, prepare notes outlining the following:

a. Your recommendation and why it is suitable for this company.

b. A general description of the documents that the proposed system requires.

c. How the documents in part 2 facilitate the operation of the job order accounting system.