...Memo: There are three possible alternatives to address this situation. Let us discuss each alternative one by one. The first alternative is that company issues a warning that the toy is unsuitable for the children and thus, the whistle should be used with caution. The major advantage of this alternative is that it does not result in any financial losses as the toys can be shipped immediately. However, this alternative can attract legal consequences as the toy fails to pass the regulatory standards. Further, it is highly unethical for the company to ship the toys even without warning as it could be harmful for children. It is unethical for the company to ship the product which is unacceptable by US standards to another country, even though the regulations are not stringent in that country as it can harm the children in that country as well. The second alternative to address this issue is to reproduce the product and meet the acceptable limits for lead and repackage it at a cost of $100,000. This alternative will result in numerous benefits. First of all, it will be a ethical decision on part of the company. Secondly, this decision will not attract any legal liabilities and will allow the company to maintain its reputation. However, the disadvantage is that this option will result in financial losses of $100,000 for the company. The third alternative is to ship the manufactured product to a country where such product is legally accepted or meets the regulatory standard. This...
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...Effective financial reporting depends on sound ethical behavior. Solving An Ethical Delimma * Recognize an ethical situation and the ethical issues involved. Use your personal ethics to identify situations and issues. Some businesses and professional organizations provide written codes of ethics for guidance in some business situations. * Identify and analyze the principal elements in the situation. Identify the stakeholders – Persons or groups who may be harmed or benefited. Ask the question: What are the responsibilities and obligations of the parties involved? * Identify the alternatives and weigh the impact of each alternative on various stakeholders. * Which of the following did not result from the SOX? Tax rates on corporations decreased. Business Activities All businesses are involved in three types of activity– * Financing Two primary sources of outside funds are 1. Borrowing money * Amounts owed are called liabilities. * Parties to whom amounts are owed are creditors. * Notes payable and bonds payable are different type of liabilities. 2. Issuing shares of stock for cash....
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... | |Assignment Title & Number: |Learning Outcomes Covered: |Assessment Criteria Covered: | | |Outcome1: | | | |Understand the essential |See the following “Notes to | | |elements of a valid contract |Students” the assessment | | |in a business context |criteria covered in this | | |Outcome2: |assignment. | | |Be able to apply the elements of a contract in business | | | |situations...
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...financial statements and related notes. In this chapter you explore important topics such as the FASB’s conceptual framework that serve as a foundation for a more detailed study of financial statements, the way the elements of these statements are measured, and the concepts underlying these measurements and related disclosures. Learning Objectives LO1–1 Describe the function and primary focus of financial accounting. LO1–2 Explain the difference between cash and accrual accounting. LO1–3 Define generally accepted accounting principles (GAAP) and discuss the historical development of accounting standards, including convergence between U.S. and international standards. LO1–4 Explain why the establishment of accounting standards is characterized as a political process. LO1–5 Explain factors that encourage high-quality financial reporting. LO1–6 Explain the purpose of the conceptual framework. LO1–7 Identify the objective and qualitative characteristics of financial reporting information, and the elements of financial statements. LO1–8 Describe the four basic assumptions underlying GAAP. LO1–9 Describe the recognition, measurement and disclosure concepts that guide accounting practice. LO1–10 Contrast a revenue/expense approach and an asset/liability approach to accounting standard setting. LO1–11 Discuss the primary differences...
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...OF INFORMATION DATE: 10/30/2011 Overview The appropriate recognition/measurement of asset retirement obligations in regard to the following situations: 1. The ten warehouses that will likely be sold before being required to remove the asbestos. 2. The two warehouses in states without special asbestos handling and disposal laws. 3. The thirteen warehouses for which the settlement date is indeterminate. Literature Statement 143 Paragraph 35 of FASB Concepts Statement NO. 6, Elements of Financial Statements, Characteristics of a liability 1. It embodies a duty or responsibility 2. There is little or no discretion to avoid a future transfer or use of assets to satisfy the obligation, and 3. The obligating event has already occurred. In June 2001 the FASB issued a Statement No. 143, Accounting for Asset Retirement Obligations requiring entities to record liabilities for tangible, long-lived assets that must be retired or disposed of in a specified way by law or contract. Such liabilities are known as Asset Retirement Obligations (AROs) ASC 410-20-25-13 If a current law, regulation, or contract requires an entity to perform an asset retirement activity when an asset is dismantled or demolished, there is an unambiguous requirement to perform the retirement activity even if that activity can be indefinitely deferred. At some time deferral will no longer be possible, because no tangible asset will last forever (except land). Therefore, the obligation to perform the asset...
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...deposit asset and reimbursed later when the required repair and maintenance is completed by the lessee. However, the provision in the lease agreement does not call upon the lessee to make deposits but simply requires the lessee to perform repair and maintenance on the leased premises. Alternative 1: Accrual Method Since there is a contractual liability for the lessee to perform general repair and maintenance, the maintenance requirement provision may be assumed as a present economic obligation, not just a future commitment. If the fair value estimate of future maintenance expense can be measured with sufficient reliability, the provision may lead to recognition of an accrued liability for the repair and maintenance performance obligation at the inception of the lease. The accrued liability for the repair and maintenance can be reversed when payment is made or liability is created through the performance of the required repair and maintenance. Alternative 2: Direct expense method Another way to treat this provision would be not to recognize at the inception of the lease but directly expense the costs when the required maintenance is performed. Regarding the accrual method in Alternative 1, ASC...
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...Brief Summary Needspace entered a operating lease with WeHaveIt for 10-Year Lease term.Lease agreements have certain provisions depending on how the contract is written by the lessor to the lessee and what type of lease agreement. In this lease agreement we are focusing operating lease with provisions of NeedSpace and WeHaveIt, which has a 10 year lease term, no options to renew or negotiate renewal offered in the contract and the lessee incurs certain cost, repairs and maintenance. In regards to ASC 840 leases, according to 840-10-20 and 840-10-05-9A, 840-10-05-9B an operating lease is when the lessor the owner of the property gives the lessee the right to use property, plant or equipment for a limited amount of time. Meaning the lessee is responsible by a legal contract to make repairs and maintain leased property. To make sure the lessee adhere to the contract the lessee has to make financial deposits to the lessor called supplemental rent or maintenance reserves. Furthermore, the lessor is required to repay the lessee when all repairs and maintenance is completed to the extent of the amount of the deposits. In some instances, when the cumulative maintenance costs is less than the cumulative deposits over the period of the lease contract. Upon expiration of the lease the lessor maybe entitled to keep the excess deposits depending on the lease agreement. How should NeedsSpace account for the two obligations noted as provisions in the lease agreement? Analysis and Solution ...
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...How to Avoid 4 Common Negligence Mistakes on Torts Essays Wednesday, December 5, 2012 California Bar Applicants, Welcome to the latest issue of our California Bar Exam newsletter. For those of you preparing for the February 2013 exam or looking ahead to the July 2013 California bar exam, we consider the following in this issue: • Important Upcoming California Bar Exam Dates • Recent BarReviewSolutions.com California Bar Exam News & Announcements • California Bar Exam Essays In-Depth: How to Avoid Common Mistakes with Negligence on Torts Essays • California Bar Exam Newsletter Discount Important Upcoming California Bar Exam Dates ________________________________________ • Final Filing Deadline for February 2013 Exam: January 15, 2013 • California Bar Exam: February 26-28, 2013 Recent BarReviewSolutions.com California Bar Exam News & Announcements ________________________________________ A few spots remain for our February 2013 Ultimate program via Expedited Scheduling. Begin today... Just starting a February 2013 review or thinking ahead to the July 2013 California bar exam? Start your review off on the right track with our FREE Improve Your Bar Review Guide (2013 Edition). Obtain your copy today... For repeaters, July 2012 Assessments are now available. Sign-up today and learn from your prior exam mistakes as you prepare for an upcoming exam... California Bar Exam Essays In-Depth: How to Avoid Common Mistakes with Negligence on Torts Essays ________________________________________ ...
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... Business contract shall be defined within the context of law of contract and business law . The former is narrower and the later is wider but all its components are subject to the essential elements of contract. Business law which is also known as mercantile law refers to laws governing and regulating trade , industry and agriculture . It includes laws relating to Contracts , Sale of Goods , Partnership , Companies , Negotiable Instruments , Insolvency , Carriage of Goods , Arbitration..etc. The difference between the law of Tort and the law of Contract is based on obligations and liabilities . In tort the obligations are imposed by law while in contract the obligation of the parties are created by their own free will and mutual consent. Key questions : 1.What are the essential elements of a valid contract in a business context ? Offer and acceptance , intention to create legal relations, consideration ,privity of contract . Types of...
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...the development of the law on corporate manslaughter. This area of law involves the interplay and intersection of criminal law and corporate law which makes it a thought provoking area of study. The essay will track the development of the law as it developed in English common law to impose liability on companies for manslaughter and the difficulties associated with prosecuting large companies which gave the impetus for reform in this area. After a brief on the reform process, the essay will...
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...Course Syllabus College of Criminal Justice and Security CJA/354 Version 4 Criminal Law Copyright © 2012, 2011, 2010, 2009 by University of Phoenix. All rights reserved. Course Description This is an introductory course in the study of criminal law, general legal principles, and how the criminal law functions in and affects modern society. This course highlights a variety of key topics, including the concept of crime and the development of criminal law, defenses to criminal charges, and a number of specific types of crimes, including personal crimes, property crimes, public order crimes, and offenses against public morality. Legal issues affecting punishment will also be discussed, as will ways the criminal law impacts victims of crime. Policies Faculty and students will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student website to view this document. • Instructor policies: This document is posted in the Course Materials forum. University policies are subject to change. Be sure to read the policies at the beginning of each class. Policies may be slightly different depending on the modality in which you attend class. If you have recently changed modalities, read the policies governing your current class modality. Course Materials Champion, D. J. (2009). Leading U.S. Supreme Court cases in criminal justice: Briefs and key terms. Upper...
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...the offer but have another offer to the party B. with no acceptance there would not be a valid contract and it should not be enforceable by law. Acceptance can be communicated orally or in written. 3. Consideration: All of the parties of contract should have value to the themselves as a sign of their contractual agreement. Consideration lets the contract enforceable by law 4. Intention: In contract intention says that the both of the parties of a contract should be intentional to have a valid and legal contract which can be terminated by court if not finished all of its obligations. If a contract is to be enforceable by law it’s a must that there is an intention to the contract. 5. Capacity : Capacity in contract is the element that says that it is a must for the two parties to be capable when making the contract. Both of them should be eighteen and be aware of what they are doing. Both should have the financial statement needs and to be sane. Having these will make the contract valid and enforceable by the law. 6. Legality of the purpose : The legality of the purpose says that both parties must have the contract for legal purpose. Such as party A should not have a contract with party B to selling drugs or to kill someone. Such Contract will not be valid. 1.2 The law identifies that legal contracts that could be written ,...
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...Which Is Better, Equity Investment or Debt Investment? Take a few minutes to ponder the way the two investment alternatives answered the three questions. If you were advising Charlene, which investment would you suggest she make? If you were the one with the $500,000 to invest, which alternative would you choose? On the surface, it appears to be no contest. Although the answer to Question 1 was essentially the same for both alternatives, the debt investment alternative is much more certain in its answers to Questions 2 and 3 than is the equity investment alternative. So why would Charlene (or anyone, for that matter) even consider the equity investment as an alternative? The one-word answer to that question is POTENTIAL! Although risk is associated with any investment, equity investments are inherently riskier than debt investments. With the additional risk, however, comes the potential for greater reward. Assume that the following events happen during the five-year period of Charlene's two investment alternatives in Weatherman Corporation. The company earns net income each year of $10 million for the next five years. If Charlene chooses the bond alternative, she will receive $20,000 interest every six months for five years and then will receive her $500,000 back. But what if Weatherman’s net income turns out to be $100 million each year for the next five years, or even $1 billion each year? How will that affect Charlene’s return if she purchases the bonds? The answer is...
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...Accounting theory and conceptual frameworks After studying this chapter you should be able to: & explain what accounting theory is & describe the main attempts at constructing an accounting theory & appraise current developments in the area & describe and discuss the contents of the IASB Framework & appraise the quality and usefulness of the IASB Framework in the context of its self-declared purposes & describe and discuss the parts of IAS 1 relating to accounting concepts and policies & appraise the overall effect of the Framework and comparable parts of IAS 1. Introduction This chapter is about to deal with something that many people believe does not exist – a single generally accepted accounting theory. There is no generally accepted accounting theory at this time even though many attempts have been made to formulate one. According to Eldon S. Hendriksen in Accounting Theory (1977), Theory as it applies to accounting is the coherent set of hypothetical, conceptual and pragmatic principles forming the general frame of reference for a field of inquiry. Thus accounting theory may be defined as logical reasoning in the form of a set of broad principles that 1 Provide a general frame of reference by which accounting practices can be evaluated and 2 Guide the development of new practices and procedures. Accounting theory may also be used to explain existing practices to obtain a better understanding of them. But the most important goal of accounting theory should be to provide...
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...8 Accounting theory and conceptual frameworks After studying this chapter you should be able to: & explain what accounting theory is & describe the main attempts at constructing an accounting theory & appraise current developments in the area & describe and discuss the contents of the IASB Framework & appraise the quality and usefulness of the IASB Framework in the context of its self-declared purposes & describe and discuss the parts of IAS 1 relating to accounting concepts and policies & appraise the overall effect of the Framework and comparable parts of IAS 1. Introduction This chapter is about to deal with something that many people believe does not exist – a single generally accepted accounting theory. There is no generally accepted accounting theory at this time even though many attempts have been made to formulate one. According to Eldon S. Hendriksen in Accounting Theory (1977), Theory as it applies to accounting is the coherent set of hypothetical, conceptual and pragmatic principles forming the general frame of reference for a field of inquiry. Thus accounting theory may be defined as logical reasoning in the form of a set of broad principles that 1 Provide a general frame of reference by which accounting practices can be evaluated and 2 Guide the development of new practices and procedures. Accounting theory may also be used to explain existing practices to obtain a better understanding of them. But the most important goal of accounting theory should be to provide...
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