...Inventory Valuation Methods and Ethical Considerations Gary Varnell Capella University MBA 6014 Financial Accounting Professor Laurent Bobda Introduction Net income results, reported in the financial statement presentation, can be affected by the inventory reporting methods used. First-In, First-Out (FIFO), Last-In, First-Out (LIFO,) and weighted average methods each have their own implications during periods of inflation and deflation. This paper is designed to analyze and discuss the Generally Accepted Accounting Practices (GAAP) and ethical implications of each reporting method in a hypothetical company. For this paper, these discussions will be from the viewpoint of a manager. In this paper, the manager will select an inventory reporting method while taking into consideration the tax liabilities, profit levels, as well as the ethical considerations that the manager will have in choosing a particular inventory reporting method. First-In, First-Out (FIFO) The first-in, first-out method, which is also called FIFO, “assumes that the earliest goods purchased (the first ones) are the first goods sold, and the last goods purchased are left in ending inventory” (Libby, Libby, & Short 2014). When it comes to inventory, this method is best used if the company have inventory with decreasing costs due to the fact that it produces the lowest tax payments for the company. This inventory reporting method, along with cost of goods sold, will be the same whether it is computed in...
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...Inventory Valuation Methods and Ethical Considerations Unit 4 Assignment 3 Dany St. Laurent Capella University Introduction Generally accepted accounting principles (GAAP) are the measurements and disclosure rules used to develop the information in financial statements (Libby, Libby, Short. pg. 16). When reporting inventory, there are generally four inventory reporting methods used; Specific identification method, first-in, first-out method (FIFO), last-in, first out method (LIFO), and average cost method. Each method is in conformity with GAAP and the law. Also each method has their own implications during periods of inflation and deflation. They can also affect the net income results reported in the financial statement presentation. In this paper, I will assume the role of a manager and analyze the GAAP and ethical implications of three of the four reporting methods in a clothing store company. First-In, First-Out Method When FIFO is used, the goods that are purchased first are the first goods to be sold. The goods that are the newest are left in ending inventory. When a company deal with increasing inventory it provides lower cost of goods sold, and a higher income tax liability, but in the end a higher net income is acquired. For inventory with decreasing cost, this is used for both tax return and financial statements because it produces the lowest income tax payment. This is a good method if the companies good have a short shelf live. It allows the company to not...
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...Results of my Ethical Lens Inventory and Career Plan Building Activity: Aptitude My results in the Ethical Lens Inventory and Career Plan Building Activity: Reasoning Aptitude, came as no surprise. I feel that they both reflect my personality along with how I academically do things. I believe these both will help me in the near future. I think my results in the Ethical Lens Inventory had a great perspective of who I am. My ethical behavior is doing the right thing, which I agree, because I hold strong standards for myself. My values, core and classical, state that I see how the community as one should work together in order to achieve the best outcome. I also value the individual balance as I seek to satisfy my duties. I have strong balance with no blind spot, and I make ethical choices for myself and others. I like my results in, Tools for analyzing problems because, I use critical thinking skills, which I believe is a huge part of life. You have to use critical thinking with almost everything you decide. I also have a good sight in seeing things clearly. I listen to my heart, use my head, and act with confidence. I think my personal Ethical Lens directs my academic behavior in many ways. You need to be honest and treat everyone with respect. I believe that my Ethical Lens states that because, I value the community with autonomy and equality equally. Also as stated in paragraph two, doing the right thing plays a part in academic behavior because it shows honesty and commitment...
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...The result of my “Ethical Lens Inventory” were that I use rational reasoning skills to determine both, the universal rules that each person should follow and the processes that will ensure fairness and justice for all in the community. What this means is that I like to gather all the information, research all available options, and think things through carefully before I make a decision. I also like to make sure my decisions are equally fair and beneficial to everyone, regardless of the time that it may take. These are the same skills that I use academically as well. I like to make sure that I complete all my assignments with well thought out, researched and prepared material. I will work tirelessly to achieve the best possible material, again, no matter how long it takes. The results of my “Ethical Lens Inventory” show that I am a critical thinker by nature. Again by me carefully analyzing, researching, and thoroughly thinking things through to come up with the best possible solution. I have always believed that it is only fair that I give a problem or situation my all, regardless whether it is for work, personal or academically. The results of my “Reasoning Abilities” in My Career Plan Building Activity were on the same lines as my “Ethical Lens Inventory”. I am a person that works well in careers where success comes from apply practical skills and where thinking is used mostly to solve problems. It also states that I am likely to be attracted to...
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...able to handle cases on my own and hopefully get promoted to a higher position. The opportunities that I would make for myself improvement to allow me to be more valuable in the workplace would be to sometimes think outside the box and understand my clients with a better and clearer understanding. The opportunities that I look forward to is getting to help kids and hopefully landing a supervisor position with New York City ACS Agency. The result of my Ethical Lens Inventory was that my personal preferred Lens was None – periscope and Paralysis. This means that I see the gifts and weaknesses of each lens and I am able to move smoothly among them to adopt the right tools to each situation to get the best outcome. It also says that I listen to my intuition to decide what best for individuals as well as the virtues that will best serve the community. One way that my personal Ethical Lens will direct my academic behavior is by helping me to see the things in others prospective and also adjust to different situations quickly. My Ethical Lens influence critical thinking by letting me help others...
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...Ethics Awareness Inventory PSYCH/545 Ethics Awareness Inventory Individual, corporate, and educational success relies largely on a person’s ability to make valuable and ethical professional decisions. The differences in ethical and moral characteristics can have positive or disastrous effects on careers and personal lives. In this paper the importance of understanding personal ethical perspective and the relationship between personal and professional ethics in psychology will be discussed. According to Mulcahy (2011), the Ethics Awareness Inventory Core is a philosophical study of moral values based on assumptions of what is determined to be right and wrong. The acronym for Core means Character, Obligation, Results, and Equity. These words define the meaning as a set of principles of beliefs for the background of the concept that includes morals, values principals, and rules that include standards of conduct and obligations for individuals and organizations. The ethical awareness inventory helps in evaluate the ethical style of an individual. This program asks a series of questions and evaluates the answers. Based on the answers an individual learns what his or her ethical perspective is. Many people view ethics from different perspectives and because of these differences is natural for people to have ethical conflicts with others. For example, an individual who has a different view about religion and politics may see ethical issues differently from another person...
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...Ethical Lens Inventory Results |[pic] |Ethical Lens Inventory Report for LATONYA CAIN | | |www.EthicsGame.com | | |GameMaster@EthicsGame.com | [pic][pic] [pic] |[pic] | |[|Rights Lens |Relationship Lens |[| |p| | |p| |i| | |i| |c| | |c| |]| | |]| | | | | | | | | | | | |Results Lens |Reputation Lens | | |[pic] | Your personal preferred lens is: Rights and Responsibility and Relationship Lens You use your reasoning skills (rationality) to determine both the universal rules that each person should follow (autonomy) and the processes that will...
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...Ethical Lens Inventory Reflection Regina Howard US/101 May 26, 2013 Ruthann Vaughan Ethical Lens Inventory Reflection The results of my Ethical Lens Inventory Reflection said that I can see the values and weaknesses of each lens. I am able to move through each lens fluidly and adapt the right tools to each situation to get the best outcome. According to my Core Values of Autonomy and Equality, I understand the value of protecting individual rights. I also understand the well-being of a community working together. I know how to combine the two in order to get the best outcome. The Core Values of Rationality and Sensibility allows me to see the uniqueness of each situation. I know that sometimes there are exceptions to the rules or guidelines. I use my reasoning and sensibility skills to determine the greatest good for everyone. The Ethical Lens Inventory Reflection went on to describe that I do not make assumptions on how or why a person may act the way they do or how things need to be done. It stated that I define an ethical person as one who does the right thing. I hold a high standard for myself, but do not judge others who fall short as long as their intentions were honorable. I am comfortable using my critical thinking skills to come up with a solution. In knowing the results of my Ethical Lens Inventory Reflection, I can draw from my strengths academically and professionally. Academically, it shows what type of learning is best suited for me. Professionally...
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...My Responses to the Questions Asked 1. Describe your ethical perspectives as identified by the Ethical Lens inventory, including your blind spot, strengths, weaknesses, and values My blind spot in not caring for others as I should, I typical care for myself and leave them to defend themselves. I am prudence and very much afraid of failure, even when failure is not an option. Knowing I will fail but never get up was a good tip to know, I was afraid for a second because refuse to fail. 2. Define what personal ethics means to you and how you apply it within the workplace Personal ethics means you outside of work and what affects you. This goes beyond your job and pretty much comes from home or deal with family in particular. You can apply this to your workplace by taking the good part of the personal parts, that’s positive and use them to get your job done. 3. Select one of the following scenarios. Explain how your personal ethics might help you determine a course of action in this situation. You have been sick all week and did not submit your weekly assignment. It is now Sunday night at 10:30 p.m. and you have to write a 1,050-word paper for your final assignment. You know you will not have time to complete it and you also know you cannot submit work late on the last week of class. Your grade will suffer if you do not get it turned in tonight and you might lose your scholarship. You notice a paper for sale online on your topic. Do you buy it and submit it as...
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...University of Phoenix Material Outline and Introductory Paragraph Worksheet Create an outline and introductory paragraph in preparation for writing a complete Personal Plan due in Week Five. Use the following information to assist you with the content of your outline and introductory paragraph: • Ethical Lens Inventory results • Career Interests Profiler results • Career Plan Building Activity: Competencies results • Your SMART goals, including those identified in the University of Phoenix Material: Goal Setting Use the following to assist you with the writing of your outline: • Sample Outline in the CWE • MyFoundationsLab: The Writing Process • MyFoundationsLab: Prewriting Outline: Introduction 1. Topic a. Subtopic b. Subtopic 2. Topic a. Subtopic b. Subtopic Use the following to assist you with the writing of your introductory paragraph: • MyFoundationsLab: Developing and Organizing a Paragraph • MyFoundationsLab: The Topic Sentence • MyFoundationsLab: Recognizing a Paragraph Introductory Paragraph: Outline: Introduction 1. Study Habits a. Time Management b. Study Areas 2. Reading Habits a. Comprehension b. Distractions Introductory Paragraph: My study habits for college by far have been substandard. I need to improve on my overall study habits. I will have to create and stay...
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...Ethical Awareness Inventory Analysis Gen/480 Ethical Awareness “You tend to base your ethical perspective on what it is good to be, rather than what it is good to do” (The Williams Institute for Ethics and Management, 2012). My ethical awareness inventory scored predominantly high in the character-based perspective. As this inventory states, “Good people demonstrate good actions” (The Williams Institute for Ethics and Management, 2012). I believe the basis for this ethical perspective comes from the fact that I was raised in and still practice Christianity. “The process of living out one’s values is more important than the outcome of a decision” (The Williams Institute for Ethics and Management, 2012). I don’t know that I would consider this to be true of myself. I had a negative number in the results perspective. As an entrepreneur I do value results. I have owned businesses before where I had to let employees go because they negatively affected the bottom-line. I knew that if I allowed the current arrangement to continue the entire business would close and everyone would be out of a job not just the employee who role was no longer a contribution to the bottom-line. That being said I would never make a decision that was dishonest, deceptive or intestinally destructive to anyone for self-preservation. The section of the EAI that identified frustrations are both accurate and ridiculous. The ridiculous is from the foundational pre-supposition that “not everyone has an...
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...Ethics Awareness Inventory Analysis Constance L. Hernandez GEN 480 June 8, 2014 Jenny Hayes Ethics Awareness Inventory Analysis The Ethics Awareness Inventory Analysis is an analysis of a person’s moral beliefs and standards that he or she holds in both his and her personal and professional lives. After taking the analysis I was not surprised at the results, I scored extremely high on both character and obligation. When reading through the ethical perspectives that were offered in the report, I found them to be accurate to the way that I think and believe. In this paper, I will address the results of the test, how my education has affected my ethical thinking, the use of my ethics in thinking and decision-making and any potential conflicts that may arise from persons with different ethical behaviors. I hold very high values and believe that integrity is a virtue that defines a person, how he or she conducts his or her lives; as well as how he or she treats and respects others. According to “Merriam Webster” (2014) ethics is “rules of behavior that is based on what is morally good and bad. Ethics is a study that deals with ideas about what is good and bad behavior; a branch of philosophy dealing with what is morally right or wrong, and a belief that something is extremely important.” I have always believed that it is important to respect yourself and others, to make sure that your obligations are taken seriously and placed ahead of anything else. I want people to know...
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...Within the case of Wayne Terrago, the stakeholders involved in this ethical issue involve the employees, investors, customers, and suppliers. The employees are involved because they are the ones determining on how the issues are being labeled in regards to the accounting. The investors are involved because they are the ones effected by the decisions the employees make. The customers are involved because they will be buying from the company. The suppliers are involved because if the product is not being moved or if the company loses investor they will not have the money to continue to buy supplies. The ethical issues involved in this situation are the company cannot agree on where and how to report the advertising costs. Most of the employees want to miss label the advertising costs because they are not sure if advertising has been successful or not. I do not agree with the president’s decision to label the advertising costs as inventory rather than advertising costs because that expense should be able to be seen by the stakeholders in the company. As for the product that is moving slowly it should be labeled as inventory because that is exactly what it is, inventory weather it is moving slowly or not. The point in a company when you have investors is to be transparent and not trying to hide things from the investors. Ethics Case BYP1-6 Wayne Terrago, controller for Robbin Industries, was reviewing production cost reports for the year. One amount in these reports...
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...bottlenecks in an organization are crucial to supply chain integration. There are three principle elements of supply chain integration: management of information and financial flows, inventory management, and management of relationships of trading partners (Power, 2005). Modern businesses are dynamic in nature and to stay competitive (organizations) need to optimize their business processes by understanding and reacting to the rapid changes in their environment' (Banavar, Black, Caceres, Ebling, et al, 2005). Dialysis, a specialized field in the healthcare industry, is a major business entity with penchant for a rapidly changing environment. Dialysis is a medical treatment for individuals with limited or no kidney function and without this specialized therapy these unfortunate individuals would not survive. In dialysis, supply chain management is crucial from all aspects in providing comprehensive and adequate patient care. The constant changing needs of patients and the organizational environment can cause disruption in a well managed supply chain within a clinic's operation resulting in inadequate patient care. Lack of inventory, inadequate staffing, and poor supplier relationships can all contribute to compromised customer (patient) service. Identified Supply Chain Process In any organization the inventory control process is a very important part of the supply...
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...Case No. 3: Inventory Valuation Issues Prophet Company has recently signed a long-term purchase contract to buy timber from the United States Forest Service. The designated price is $300 per thousand board feet, which will end up totaling $6,000,000 for the year. Meanwhile, the current market price for timber is $250 per thousand board feet, a difference of $250. Unfortunately, Prophet Company has a predicament as the controller wants to record the inventory at market value, but is facing opposition from the financial vice president who wants to record inventory at cost. According to the controller, the market value has remained constant for months, which means the company should recognize the loss. The financial vice president’s counter argument is that the loss in value is temporary and should be ignored. According to the FASB, “the primary basis of accounting for inventories is cost, which has been defined generally as the price paid or consideration given to acquire an asset” (330-10-30-1). In this case, Prophet Company would initially record the inventory at cost, which is the exchange price of $6,000,000. However, the company must deviate from recording inventory at cost if the utility, revenue producing ability of an asset, declines. This adjustment to lower of cost or market is addressed by the Codification, which states “a departure from the cost basis of pricing the inventory is required when the utility of the goods is no longer as great as their cost” (330-10-35-1)...
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