Natalia Wallace is the new controler for Smart Software, Inc., which develops and sells education software. Shortly before the December 31 fiscal year-end, James Cauvet, the company president, asks Wallace how things look for the year-end numbers. He is not happy to learn that earnings growth may be below 13% for the first time in the company's five-year history Cauvet explains that financial analysts have agan predicted a 13% earnings growth for the company and that he does not intend to disappoint them. He suggests that Walace talk to the assistant controller, who can explain how the previous controller dealt with such situations. The assistant controler suggests the following strategies Click the icon to view the suggested strategies.) X More Info Read the recurements Requirement 1. Which of these suggested strategies are inconsistent with IMA standards? a a. Persuade suppliers to postpone biling $13,000 in invoices until January 1. b. Record as sales $115.000 in certain software awaiting sale that is held in a public warehouse c. Delay the year-end closing a few days into January of the next year, so that some of next year's sales are included in this year's sales. d. Reduce the estimated Bad Debts Expense from 5% of Sales Revenue to 3% given the company's continued strong performance. e. Postpone routine monthly maintenance expenditures from December to January d Print Done e. Requirement 2. How might these inconsistencies affect the company's creditors and stockholders? The inconsistencies noted for Smart Software, Inc particularly impact the financial statement information provided by They will be led to believe the operating performance profitability of the company is that it really is. This misrepresentation may result in the investors with the correct information Sy creditors may credit to the company with the false income information when they may credit with the correct income information Requirement 3. What should Wallacedo il Cauvet insists that she follow all of these suggestions? The controller should a band and should dif the president ignores Wallace, then Wallace needs to consider Natalia Wallace is the new controler for Smart Software, Inc., which develops and sells education software. Shortly before the December 31 fiscal year-end, James Cauvet, the company president, asks Wallace how things look for the year-end numbers. He is not happy to learn that earnings growth may be below 13% for the first time in the company's five-year history Cauvet explains that financial analysts have agan predicted a 13% earnings growth for the company and that he does not intend to disappoint them. He suggests that Walace talk to the assistant controller, who can explain how the previous controller dealt with such situations. The assistant controler suggests the following strategies Click the icon to view the suggested strategies.) X More Info Read the recurements Requirement 1. Which of these suggested strategies are inconsistent with IMA standards? a a. Persuade suppliers to postpone biling $13,000 in invoices until January 1. b. Record as sales $115.000 in certain software awaiting sale that is held in a public warehouse c. Delay the year-end closing a few days into January of the next year, so that some of next year's sales are included in this year's sales. d. Reduce the estimated Bad Debts Expense from 5% of Sales Revenue to 3% given the company's continued strong performance. e. Postpone routine monthly maintenance expenditures from December to January d Print Done e. Requirement 2. How might these inconsistencies affect the company's creditors and stockholders? The inconsistencies noted for Smart Software, Inc particularly impact the financial statement information provided by They will be led to believe the operating performance profitability of the company is that it really is. This misrepresentation may result in the investors with the correct information Sy creditors may credit to the company with the false income information when they may credit with the correct income information Requirement 3. What should Wallacedo il Cauvet insists that she follow all of these suggestions? The controller should a band and should dif the president ignores Wallace, then Wallace needs to consider
