ACTBAS2 INDIVIDUAL BUSINESS CASE (“Goodwill Stores”) 3rd Term, Academic Year 2011-2012 Source: Weygandt, J., Kieso, D., and Kimmel, P. ”Accounting Principles”, 8th edition. (modified)
ACTBAS2 INDIVIDUAL BUSINESS CASE (“Goodwill Stores”)
3rd Term, Academic Year 2011-2012
Source: Weygandt, J., Kieso, D., and Kimmel, P. ”Accounting Principles”, 8th edition. (modified)
Ulysses Cordero was just hired as the assistant treasurer of Goodwill Stores. The company is a specialty chain store with nine retail stores concentrated in one metropolitan area. Among other things, the payment of all invoices is centralized in one of the departments Ulysses will manage. His primary responsibility is to maintain the company’s high credit rating by paying all bills when due and to take advantage of all cash discounts.
Philmon Lavares, the former assistant treasurer who has been promoted to treasurer, is training Ulysses in his new duties. He instructs Ulysses that he is to continue the practice of preparing all checks “net of discount” and dating the checks the last day of the discount period. “But,” Philmon continues, “we always hold the checks at least 4 days beyond the discount period before mailing them. That way we get another 4 days of interest on our money. Most of our creditors need our business and don’t complain. And, if they scream about our missing the discount period, we blame it on the mail room or the post office. We’ve only lost one discount out of every hundred we take that way. I think everybody does it. By the way, welcome to our team!”
CASE OUTLINE:
I. Introduction (Provide a brief introduction either about the case or about any accounting topic previously learned which is related to the case. One to two pages only.)
II. Discussion (This is the bulk of your paper. Incorporate in this section your answers to the following questions listed below. Copy the questions first before answering.) 1. What are the ethical considerations in this case?
2. Who are the stakeholders (may be an individual, a group, business entities, or the public in general) that are harmed or benefited in this situation?
3. Should
3rd Term, Academic Year 2011-2012
Source: Weygandt, J., Kieso, D., and Kimmel, P. ”Accounting Principles”, 8th edition. (modified)
Ulysses Cordero was just hired as the assistant treasurer of Goodwill Stores. The company is a specialty chain store with nine retail stores concentrated in one metropolitan area. Among other things, the payment of all invoices is centralized in one of the departments Ulysses will manage. His primary responsibility is to maintain the company’s high credit rating by paying all bills when due and to take advantage of all cash discounts.
Philmon Lavares, the former assistant treasurer who has been promoted to treasurer, is training Ulysses in his new duties. He instructs Ulysses that he is to continue the practice of preparing all checks “net of discount” and dating the checks the last day of the discount period. “But,” Philmon continues, “we always hold the checks at least 4 days beyond the discount period before mailing them. That way we get another 4 days of interest on our money. Most of our creditors need our business and don’t complain. And, if they scream about our missing the discount period, we blame it on the mail room or the post office. We’ve only lost one discount out of every hundred we take that way. I think everybody does it. By the way, welcome to our team!”
CASE OUTLINE:
I. Introduction (Provide a brief introduction either about the case or about any accounting topic previously learned which is related to the case. One to two pages only.)
II. Discussion (This is the bulk of your paper. Incorporate in this section your answers to the following questions listed below. Copy the questions first before answering.) 1. What are the ethical considerations in this case?
2. Who are the stakeholders (may be an individual, a group, business entities, or the public in general) that are harmed or benefited in this situation?
3. Should