1. What is the purpose of accounting in society? Do you think that accounting is important in today’s society? Why or Why not? Explain your answer in detail 2. On January 20, 2013, Tamira Nelson, the accountant for Picton Enterprises, is feeling pressure to complete the annual financial statements. The company president has said he needs up-to-date financial statements to share with the bank on January 21 at a dinner meeting that has been called to discuss Picton’s obtaining loan financing for a special building project. Tamira knows that she will not be able to gather all the needed information in the next 24 hours to prepare the entire set of adjusting entries. Those entries must be posted before the financial statements accurately portray the company’s performance and financial position for the fiscal period ended December 31, 2012 Tamira ultimately decides to estimate several expense accruals at the last minute. When deciding on estimates for the expenses, she uses low estimates because she does not want to make the financial statements look worse than they are. Ttamira finishes the financial statements before the deadline and gives them to the president without mentioning that several account balances are estimates that she provided a. Identify several courses of action that Tamira could have taken instead of the one she took. Provide in detail. b. If you were in Tamira’s situation, what would you have done? Briefly justify your response. 3. BTN 5-3 (Page 252). Golf Challenge Corp, is a retail sports store carrying golf apparel and equipment. The store is at the end of its second year of operation is struggling. A major problem is that its cost of inventory has continually increased in the past two years. In the first year of operations, the store assigned inventory costs using LIFO. A loan agreement the store has with its bank, its prime source of financing, requires the store to maintain a certain profit margin and current ratio. The store’s owner is currently looking over Golf Challenge’s preliminary financial statements for its second year. The numbers are not favorable. The only way the store can meet the required financial ratios agreed on with bank is to change from LIFO to FIO. The store originally decided on LIFO because of its tax advantages. The owner recalculates ending inventory using FIFO and submits those numbers and statements to the loan officer at the bank for the required bank review. The owner thankfully reflects on the available latitude in choosing the inventory costing method. a. How does Golf Challenge’s use of FIFO improve its net profit margin and current ratio? b. Is the action by Golf Challenge’s owner ethical? Explain. For a custom paper on the above topic, place your order now! What We Offer: ¢ On-time delivery guarantee ¢ PhD-level writers ¢ Automatic plagiarism check ¢ 100% money-back guarantee ¢ 100% Privacy and Confidentiality ¢ High Quality custom-written papers
