You are the assistant controller for a public company. Wall Street stock analysts are projecting an earnings per share figure

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You are the assistant controller for a public company. Wall Street stock analysts are projecting an earnings per share figure of $0.25 for your company. On December 29, a large customer returns a very large shipment of your goods that were defective. You tell the controller about the customer return and that the debit to sales returns and allowances will have the effect of reducing earnings per share from $0.25 to $0.24. The controller indicates that failing to meet the consensus earnings expectations of the analyst community will result in a large stock price decline. The controller suggests waiting until January 2 (your company operates on a calendar year-end basis) to record the customer return. What should you do?

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Related Book For  answer-question

Financial and Managerial Accounting the basis for business decisions

ISBN: 978-0078111044

16th edition

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

Question Details
Chapter # 6
Section: Brief Exercises
Problem: 11
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Question Posted: April 17, 2014 09:38:22