personal consumer can be overwhelming, hoping that ethically products and services are genuine and the business are trustworthy, which can affect how consumers and the community view unethical issues. In conclusion, business ethics focuses on what makes up the right and wrong theory in the business and how ethical principles and morals are useful by business people. More important, ethical or moral standards guide our behavior, as parents, children, or students who apply to our everyday lives in the business or social profession.As current members of the usiness world, we have a moral and business obligation to be ethical in how we deal with others, no matter in what capacity.
References Federal Trade Commission, Inc. (2010) Consumer Protection. Retrieved from http://www. ftc.
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(2009). Effects of embezzlement still felt as families, bank rebuild. Steamboat Today. Retrieved from http://www.
steamboatpilot. com Exercise 5-3Percentage-of-completion method; loss projected on entire project ( L04 On April 13, 2006, the Pagano Construction Company entered into a three-year construction contract to build a mall for a price of $12,000,000. During 2006, costs of $3,000,000 were incurred with estimated costs of $6,000,000 yet to be incurred. Billings of $3,800,000 were sent and cash collected was $3,250,000. In 2007, costs incurred were $4,000,000 with remaining costs estimated to be $5,600,000.
2007 billings were $3,500,000 and $3,600,000 cash was collected. The project was completed in 2008 after additional costs of $5,800,000 were incurred.The company's fiscal year-end is December 31. Arrow uses the percentage-of-completion method. Required: 1.
Calculate the amount of gross profit or loss to be recognized in each of the three years. 2. Prepare Journal entries for 2006 and 2007 to record the transactions described (credit Narious accounts" for construction costs incurred). 3. Prepare a partial balance sheet to show the presentation of the project as of December 31 , 2006 and 2007.
Exercise 5-4 Franchise sales; revenue recognition (LOS On November 1 5, 2006, the Coldstone Ice Cream Company entered into a franchise greement with an individual.In exchange for an initial franchise fee of $25,000, Coldstone will provide initial services to the franchisee to include assistance in design and construction of the building, help in training employees, help in obtaining financing, and management advice over the first five years of the ten-year franchise agreement. 50% of the initial franchise fee is payable on November 15, 2006, with the remaining $12,500 payable in five equal annual installments beginning on November 15, 2007. These installments will include interest at an appropriate rate.
The franchise opened for business on February 1 5, 2007.Assume that the initial services to be performed by Coldstone subsequent to November 1 5, 2006, are substantial and that collectibility of the installment receivable is reasonably certain. Substantial performance of the initial services is deemed to have occurred when the franchise opened. Prepare the necessary Journal entries for the following dates (ignoring interest charges): 1. November 15, 2006, and 2.
February 15, 2007. Exercise 5-5 Evaluating efficiency of asset management ( L06 The year 2006 income statement of Garret & Sons Music Company reported net ales of $10 million, cost of goods sold of $6 million, and net income of $1 million.