I need to help this assignment. Business Memo Assignment You have recently been hired as the
Question:
I need to help this assignment. "Business Memo Assignment
You have recently been hired as the assistant controller for Stanton Corporation, which rents building space in major metropolitan areas. Customers are required to pay six months of rent in advance. At the end of 2016, the company's president notices that net income has fallen $50,000 compared to last year. This concerns the president for two reasons. First, the year-end bonus for the employees is tied directly to net income. Second, shareholders may see a decline in profitability as a weakness in the company and begin to sell their stock.
After close inspection of the financial statements, the president notices that the balance of the Unearned Revenue account is $120,000. The president comes to you, the company's accountant, and suggests that the firm should recognize as revenue in 2016 the $120,000 received in advance from customers for rent to be provided in 2017. The president offers the following explanation: First, we have received these customers' cash by the end of 2016, so there is no question about their ability to pay. Second, we have a history of fulfilling our obligation to these customers. We earned that money when we got them to sign the six-month contract.
Required:
Draft a one-page response in the form of a business memo to your manager discussing your recommendation on the Presidents suggestion to recognize the $120,000 as revenue in 2016. Support your decision with addressing the accounting issue, the parties affected and what factors you considered to make your decision. Your memo will be graded based on the written communication, critical thinking and ethics rubrics.
Business Memos A business memo is used for communication within a company (internal communication). Format: The business memo should be organized in the following format: Heading, Introduction, Body and Conclusion. Heading The heading should use this format: To: (Reader's name and job title) From: (Your name) Date: (Current date) Subject: (Brief explanation on what memo is about - be specific and concise) Introduction The purpose of the memo should be stated in the introduction (what the memo is about / why it is written). The main idea and/or recommendations will be stated here as well. Body The body of the memo should organize the ideas and facts that support the key findings or recommendations. If there are several points to get across to the reader, the body can be divided into sections. The main idea should be stated in the first part of the section and then the specific ideas and facts to support the main idea would be stated next. Conclusion The conclusion should be very brief and use courteous language. The conclusion will describe the action the reader should take. For short memos, the conclusion does not need to re-state or summarize the main ideas of the memo. Key things to remember when writing a business memo: The memo should be brief and concise The memo should state the purpose and provide a recommendation The memo should consider the audience's knowledge and include the proper heading The memo should be well organized in the proper memo format and easy to read The memo should include the correct GAAP application of the issue discussed The memo should address the client's point of view The memo should properly cite source of information (textbook, industry research, work experience, etc.) The memo should use courteous and formal language The memo should use proper grammar, mechanics and spelling