ACC 211 Week 7 Assignment Help

ACC 211 Week 7 Assignment Help | excelsior-college

M7A1: Written Assignment Paper

Ross’s Lipstick Company’s long-term debt agreements make certain demands on the business. For example, Ross may not purchase treasury stock in excess of the balance of retained earnings. Also, long-term debt may not exceed stockholders’ equity, and the current ratio may not fall below 1.50. If Ross fails to meet any of these requirements, the company’s lenders have the authority to take over management of the company. Changes in consumer demand have made it hard for Ross to attract customers Current liabilities have mounted faster than current assets, causing the current ratio to fall to 1.47. Before releasing financial statements, Ross’s management is scrambling to improve the current ratio. The controller points out that an investment can be classified as either long-term or short-term, depending on management’s intention. By deciding to convert an investment to cash within one year, Ross can classify the investment as short-term-a current asset. On the controller’s recommendation, Ross’s board of directors votes to reclassify long-term investments as short-term.

Requirements

1.      What effect will reclassifying the investments have on the current ratio? Is Ross's true financial position stronger as a result of reclassifying the investments?

2.      Shortly after the financial statements are released, sales improve; so, too, does the current ratio. As a result, Ross's management decides not to sell the investments it had reclassified as short-term. Accordingly, the company reclassifies the investments as long-term. Has management behaved unethically? Give the reasoning underlying your answer.

Your written assignment should be a minimum of two pages and a maximum of four pages, typed double spaced, Times New Roman font size 12, with one inch margins on all sides.

This assignment will address the following Module Outcomes:

·         MO1: Apply the method of accounting for current liabilities. (CO1)

·         MO2: Explain the financing of operations through long-term liabilities, particularly bonds payable. (CO4)

·         MO3: Identify the importance of ratio analysis in decision making. (CO2, CO3)

Compose your work in a .doc or .docx file type using a word processor (such as Microsoft Word, etc.) and save it frequently to your computer. For those assignments that are not written essays and require uploading images or PowerPoint slides, please follow uploading guidelines provided by your instructor.

Check your work and correct any spelling or grammatical errors. When you are ready to submit your work, click “Upload Submission”. Enter the submission title and then click on “Select a file to upload”. Browse your computer, and select your file. Click “Open” and verify the correct file name has appeared next to Submission File. Click on “Continue.” Confirm submission is correct and then click on “Accept Submission & Save.”

Turnitin

This course has Turnitin fully integrated into the course dropbox.  This means that you should only submit your assignments to the dropbox below.  Please do not submit your assignment directly to Turnitin.com.    

Once submitted, your assignment will be evaluated by Turnitin® automatically.  You will be able to view an Originality Report within minutes of your first submission that will show how much of your work has been identified as similar to other sources such as websites, textbooks, or other student papers.  Use your Originality Report as a learning tool to identify areas of your assignment that you may not have cited appropriately.  You may resubmit your assignment through this dropbox as many times as you need to check to see if you have made improvements, until the due date of the assignment. However, once you have made your first submission, you will need to wait 24 hours after each subsequent submission to receive a new Originality Report.  Plan accordingly as you draft your assignment.  Once the due date has passed, your assignment submission will be considered final.