Marston Dairy Limited Marston Dairy Limited (Marston) is a dairy company operating in the Kawartha Region. The
Question:
Marston Dairy Limited
Marston Dairy Limited (Marston) is a dairy company operating in the Kawartha Region. The
company’s founder, Karen Marston, owns 70 percent of the shares. Three other private
individuals, who have very little involvement in operating decisions, each own 10 percent.
Marston produces milk, yogurt, ice cream, etc. that it sells through grocery stores and chains
throughout Ontario.
Over the years, labour and management have had a taxing relationship. Over the past ten
years, the union representing Marston’s employees have made significant wage concessions to
avoid job losses. In the last contract negotiations, Marston and the union agreed that the union
would have access to the company’s financial statements. The upcoming negotiation will be the
first time the union will receive the financial statements.
You have been hired by the union representing Marston’s employees to prepare a report on
how to account for a number of controversial issues that arose on the union’s review of
Marston’s December 31, 2021 financial statements and its preliminary discussions with
Marston’s management. The union will use your report in its assessment of Marston’s financial
position and performance, and its ability to pay higher wages and benefits to employees.
Up until now, the company has followed ASPE, however, the union leader has asked whether
IFRS would be more beneficial for the employees.
The union leader has asked for your report to fully explain your recommendations, discuss
arguments that Marston’s management might use to counter your recommendations, and
identify and discuss alternative treatments that Marston might present for the outstanding
issues:
1. In early January 2022, one of Marston’s largest customers went out of business. Marston
doesn’t expect to collect any of the $55,000 it’s owed.
Required:
-Assess the Situation
- What are the Issues
-GAAP/analysis
- Conclude & Advise
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey