The Comfort Zone Company installs heating ventilation and air conditioning in
The Comfort-Zone Company installs heating, ventilation, and air conditioning in large buildings such as domed stadiums, military bases, airports, and high rises. Its contracts usually take two to three years to complete. At any fiscal year end, this work-in-process (VVIP) inventory is a sizable percentage of its assets. The company is privately held and has a senior management group whose compensation is based almost entirely on the earnings results for the year. As the ethical accountant (who is also the CFO), you have been reviewing the year-end VVIP figures, which have been estimated using the percentage-of-completion method. These estimates have been provided to you by the project managers responsible for the completion of the various contracts.
This year has not been as successful or as active as previous ones and the company's two senior founders have asked you to bring in a net income figure at least equal to the last couple of years. In your mind, you know that the project managers' estimates are somewhat fluid and you have been considering making the requested adjustments.
How would you handle the two senior founders' request?
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
Relevant Tutors available to help