RM Company, owner of RM Mall, charges Hope Clothing Store, a rental fee of P60, 000 per month plus 5% yearly profits over P5, 000,000. Jacob, the owner of the store, directs his accountant Jun Reyes, to increase the estimate of bad debt expense and warranty costs in order to keep profits at P4, 750,000. Instructions: Should Jun Reyes follow his boss’ directive? Who is harmed if the estimates are increased?
RM Company, owner of RM Mall, charges Hope Clothing Store, a rental fee of P60, 000 per month plus 5% yearly profits over P5, 000,000. Jacob, the owner of the store, directs his accountant Jun Reyes, to increase the estimate of bad debt expense and warranty costs in order to keep profits at P4, 750,000. Instructions: Should Jun Reyes follow his boss’ directive? Who is harmed if the estimates are increased?
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter4: Adjusting Entries And The Work Sheet
Section: Chapter Questions
Problem 4A: Your client is preparing financial statements to show the bank. You know that he has incurred a...
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RM Company, owner of RM Mall, charges Hope Clothing Store, a rental fee of P60, 000 per month
plus 5% yearly profits over P5, 000,000. Jacob, the owner of the store, directs his accountant Jun Reyes, to
increase the estimate of
Instructions:
Should Jun Reyes follow his boss’ directive? Who is harmed if the estimates are increased?
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