1. DQ 3 - Chapter 3 Discussion. After reading the text, viewing the PowerPoint slides and reading the notes, consider the following: Bell Farm and Garden Equipment reported the following information for Year 2: Net Sales of Equipment Other Income $2,450,567 6,786 Cost of Goods Sold 1,425,990 Selling, General and Administrative Expenses 325,965 Net Operating Income 705,398 Selected information from the balance sheet as of December 31, Year 2: Cash and Marketable Securities $113,545 Inventory Accounts Receivable 248,600 82,462 Property, Plant and Equipment - Net 335,890 Other Assets 5,410 Total Assets $785,907 Assume that a major customer returned a large order to Bell on December 31, Year 2. The amount of the sale had been $146,800 with a cost of sales of $94,623. The return was recorded on January 1, Year 3. The company president does not want to correct the books. He argues that it makes no difference as to whether the return is recorded in Year 2 or Year 3. Either way, the return has been duly recognized. Assume you are the CFO for the company. Write a memo to the president explaining how omitting the entry on December 31, Year 2, could cause the financial statements to be misleading to investors and creditors. Explain how omitting the return from the customer would affect net income and the balance sheet