Mitchem Lethbridge Ltd. is an individual franchise of the parent company Mitchem Office Corporation, which holds a contest every third year to award the franchise with the greatest improvement in net income. This year the Lethbridge franchise has won the contest, however the Halifax franchise, who had a net income increase of 60%, contends that Lethbridge’s financial records have been manipulated to reflect higher net income numbers. The Mitchem head office has asked us to look at the financial records and interview the Lethbridge management to determine if an audit is required because of suspect manipulations to the statements. We also have been required to suggest some improvements to the contest rules to the Mithcem head office. The Lethbridge franchise is currently solely owned by Lisa McGovern and had been going through a tough year in 2010. At the end of the period they made many adjustments that had negative effects on the net income in the 2010 year and positive effects towards the net income of the 2011 year. These issues and the effects they had on net income will determine if there is a need for an audit. They will also help provide insight to determine any improvements that can be applied to the rules of the contest to ensure the future winners are indeed complying with the rules. Improvements would also help curb franchises towards the purpose of the contest, which is to be continually improving net income each year. After determine Mitchem Lethbridge Ltd. Financial statement, we comment on some issues them may address, and…
Kendall Square Research Corporation is a technology company that has recently been scrutinized for its liberal revenue recognition policies. Currently this company recognizes revenue on product sales upon written acceptance of the product. However, acceptance typically occurs prior to the configuration of a particular system being finalized or payment being received from the customer.…
Warren Buffet invoked the substance-over-form concept to justify accounting for the GEICO and General Foods transactions as dividends distributions rather than sales of stock. Do you agree with Buffet that the substance of each of the proportionate redemptions was a dividend and not a sale of stock?…
The critical issue in this case study is the responsibility of auditor. Should Ernst & Ernst be civilly liable for defrauded investors of First Securities Company of Chicago under Securities Exchange Act of 1934 under Rule 10b-5.…
1. David Robinson’s suggested compromise is to require Belot to increase the June 30th balances of the allowance for bad debts and inventory obsolescence to more normal levels, while allowing the company to use the “precise point estimates” for the other three discretionary accruals. It is appropriate because it will reduce the year over year increase in Belot’s operating income for the just-completed quarter from 140 percent to 103 percent just enough to keep Allen happy.…
Polluter Corp. (the “Company”), an SEC registrant, operates three manufacturing facilities in the United States. The Company manufactures various household cleaning products at each facility, which are sold to retail customers. The U.S. government granted the Company emission allowances (“EAs”) of varying vintage years (i.e., the years in which the allowance may be used) to be used between 2010 and 2030. Upon receipt of the EAs, the Company recorded the EAs as intangible assets with a cost basis of zero, in accordance with The Federal Energy Regulatory Commission (“FERC”) accounting guidance for EAs. The Company has a fiscal year end of December 31.…
Braaap started with a vision of making motorcycling more fun and more accessible, so more people could experience what we love in motorcycling.…
Following, students engaged in an internship breakout session with Dr. Beaupre and PPP Alumni Adam Clark. It is highly encouraged that in the summer between the end of their sophomore year and the fall semester of their junior year, students take on internships, whether that be locally in Cincinnati, back in their hometowns, or in the nation’s capital Washington D.C. The sophomores found this session particularly beneficial because it got students thinking about their summer plans, while allowing them to brainstorm the types of internships that best fit their skills, values, and varying interests.…
The Braaap motorcycle brand was established in 2008 by Brad Smith. Brad began with a vision to supply motorbikes which would making motorcycling more fun and accessible for people. The plan from the start was to build a motorcycle that would compete with custom built American race bikes, but be affordable for people that wish to have a go at this sport. It took a lot of visits to different manufacturers before they found one that believed in his vision. Since then it has been onwards and upwards for the Braaap brand, they have their own concept stores in Tasmania and Victoria, and franchise opportunities throughout Australia and the rest of the world. Braaap are also one of the only motorcycle brands on the market to offer a lifetime warranty.…
It is difficult to land internships, but they offer a good way to break into a field. (Strategy 1)…
On May 9, 1989, Bear Stearns & Co. issued a report on Blockbuster Entertainment Corp., which is reproduced in part below.…
You should have no problem answering this question. The textbook makes clear time and again in Ch. 1 that economics is all about making choices based on limited resources.…
What is the impact of the December 1993 shipments of conventional lenses to Bausch and Lomb 1993 financial statements? Is the impact significant?…
usually 3 years or less, at an agreed-upon price. The borrower pays an option fee,…
Due to a variety of uncertainties ranging from the instability of Mexico’s economy, to a limited knowledge of the possible company to do business with, Charles River Laboratories have to assure to their stakeholders that a joint venture with ALPES is beneficial to the growth of the company.…