Enza Martinez is the owner of Menza Consulting, which operates as a sole proprietorship. On December...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Enza Martinez is the owner of Menza Consulting, which operates as a sole proprietorship. On December 27, 2018, Rose Hill Inc. signed a $12,000 contract to hire Menza Consulting for a project, starting in January 2019 and ending in March 2019. Rose Hill Inc. paid a $2,000 deposit on December 27, 2018 and agreed to pay the remaining amount to Menza Consulting at the end of the project on March 31, 2019. To avoid reporting a net loss for the fiscal year 2018, Enza decided to record the transaction related to Rose Hill Inc's contract as follows. Account Title and Explanation Date 2018 Dec 27 Cash Service Revenue Received deposit from Rose Hill Inc. Dec 31 Accounts Receivable Service Revenue Accrued revenue from Rose Hill Inc. PR Debit 2,000 10,000 Credit 2,000 10,000 Was it ethical for Enza to record the above journal entries? Why or why not? If you believe that Enza's action is unethical, describe how the transaction related to Rose Hill Inc's contract should be recorded in the fiscal year 2018. Enza Martinez is the owner of Menza Consulting, which operates as a sole proprietorship. On December 27, 2018, Rose Hill Inc. signed a $12,000 contract to hire Menza Consulting for a project, starting in January 2019 and ending in March 2019. Rose Hill Inc. paid a $2,000 deposit on December 27, 2018 and agreed to pay the remaining amount to Menza Consulting at the end of the project on March 31, 2019. To avoid reporting a net loss for the fiscal year 2018, Enza decided to record the transaction related to Rose Hill Inc's contract as follows. Account Title and Explanation Date 2018 Dec 27 Cash Service Revenue Received deposit from Rose Hill Inc. Dec 31 Accounts Receivable Service Revenue Accrued revenue from Rose Hill Inc. PR Debit 2,000 10,000 Credit 2,000 10,000 Was it ethical for Enza to record the above journal entries? Why or why not? If you believe that Enza's action is unethical, describe how the transaction related to Rose Hill Inc's contract should be recorded in the fiscal year 2018.
Expert Answer:
Answer rating: 100% (QA)
In the given scenario it seems that Enza might be attempting to manipulate the companys financial st... View the full answer
Related Book For
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd Edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman
Posted Date:
Students also viewed these accounting questions
-
Hank started a new business in June of last year, Hank's Donut World (HW for short). He has requested your advice on the following specific tax matters associated with HW's first year of operations....
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Hank started a new business, Hanks Donut World (HW for short), in June of last year. He has requested your advice on the following specific tax matters associated with HWs first year of operations....
-
On 13 May 2014, Ruben acquired 400 shares in Xantan Ltd at a cost of 1,800. On 17 July 2020, the company made a 1 for 8 bonus issue and (on the same day) Ruben sold his bonus shares for 7 each....
-
If a bubble in sparkling water accelerates upward at the rate of 0.225 m/s2 and has a radius of 0.500 mm, what is its mass? Assume that the drag force on the bubble is negligible.
-
Find the volume of the solid obtained by rotating the region enclosed by the graphs about the given axis. y = 9 x2 y = 10 x, x 0, about x = -1
-
Estimate the fundamental frequency of a cantilever beam whose cross-sectional area and moment of inertia vary as \[A(x)=A_{0} \frac{x}{l} \quad \text { and } \quad I(x)=\bar{I} \frac{x}{l}\] where...
-
Antiquities, Ltd., produces antique-looking books. Management has just received a request for a special order for 2,000 books and must decide whether to accept it. Venus Company, the purchaser, is...
-
I Scream Ice Cream is considering a project that is expected tocost $98000 today; produce annual cash flows of $12100 forever(with the first CF expected in 1 year); and have an NPV of $3500.What is...
-
Question 8 (15 points): It is the end of 2019 and you have just been hired as CFO of BREW Inc, the world's leading maker of home brewing supplies, which plans to have its IPO next year. As one of...
-
An investor believes that the Cisco stock price is going to increase in the following 12 months from the current stock price of $200. Call options on Cisco stock expiring in 12 months have a strike...
-
Calculate the following sum and simplify. 34 +1 56
-
Ben csn paint 4 rooms in 3 0 hours. His apprentice, Jerry takes 6 0 hours to paint 4 rooms. How long would it take them working together assuming no gain or loss in efficiency?
-
Factor completely. 9x - 25y
-
1 log3 243 Question Help: Video Message instructor Calculator Submit Question
-
10. What is the rate of change with the area of a square if the length of its side is 4 units?
-
Develop a system for a business. I. Explain the business and its strategy. The business will be your choice, real or imaginary. Perform internal (capabilities, competencies) and external (industry)...
-
Determine two different Hamilton circuits in each of the following graphs. A B F G
-
According to the Supreme Court, would it be good tax policy to use income as computed by financial accounting principles as the correct measure of income for Federal income tax purposes? Explain.
-
In 2013 and with $200,000, Alice purchases a CD at State Bank listing title as follows: Alice, payable on proof of death to Clark. Alice dies in 2020, and Clark (Alices nephew) redeems the CD (now...
-
In 2015, Jed James began planting a vineyard. The costs of the land preparation, labor, rootstock, and planting were capitalized. The land preparation costs do not include any nondepreciable land...
-
Have you ever been informed of the information flow in your unit or division?
-
If so, did you receive the information in a formal seminar or in an informal manner, oneon-one with another individual? Do you think this was the best way? Why?
-
Do you know about the chart of accounts in your organization as it pertains to information you receive?
Study smarter with the SolutionInn App