ACCOUNTING 2201 ETHICS ASSIGNMENT #3 DIRECTIONS: Read the scenario below and respond to discussion points that follow in
Posted: Sun Jul 03, 2022 12:57 pm
ACCOUNTING 2201
ETHICS ASSIGNMENT #3
DIRECTIONS: Read the scenario below andrespond to discussion points that follow in 2-3 paragraphs.
SCENARIO: Due to an economic recession,Anton Corporation faces severe cash flow problems. Managementforecasts that payments to some suppliers will have to be delayedfor several months. Jay Newton, controller, has asked his staff forsuggestions on selecting the suppliers for which payments will bedelayed.
“That’s a fairly easy decision,” observes Tim Haslem. “Somesuppliers charge interest if our payment is late, but others donot. We should pay those suppliers that charge interest and delaypayments to the ones that do not charge interest. If we do this,the savings in interest charges will be quitesubstantial.”
“I disagree,” states Tara Wirth. “That position is too ‘bottomline’ oriented. It’s not fair to delay payments only to supplierswho don’t charge interest for late payments. Most suppliers in thatcategory are ones we have dealt with for years; selecting thesesuppliers would be taking advantage of the excellent relationshipswe have developed over the years. The fair thing to do is to makepro-rata payments to each supplier.”
“Well, making pro-rata payments to each supplier means that allour suppliers will be upset because no one receives full payment,”comments Sue Myling. “I believe it is most important to maintaingood relations with our long-term suppliers; we should pay themcurrently and delay payments to our newer suppliers. The interestcosts we end up paying these newer suppliers is the price we mustpay to keep our long-term relationships solid.”
Points toDiscuss:
DELIVERABLE: Please submit thefollowing through Moodle:
Note: Your workwill be graded on both your discussion of the questions related tothe scenario (critical thinking) and your writing (rhetoricalelements), with 80% of the grade coming from critical thinking and20% from the rhetorical elements.
ETHICS ASSIGNMENT #3
DIRECTIONS: Read the scenario below andrespond to discussion points that follow in 2-3 paragraphs.
SCENARIO: Due to an economic recession,Anton Corporation faces severe cash flow problems. Managementforecasts that payments to some suppliers will have to be delayedfor several months. Jay Newton, controller, has asked his staff forsuggestions on selecting the suppliers for which payments will bedelayed.
“That’s a fairly easy decision,” observes Tim Haslem. “Somesuppliers charge interest if our payment is late, but others donot. We should pay those suppliers that charge interest and delaypayments to the ones that do not charge interest. If we do this,the savings in interest charges will be quitesubstantial.”
“I disagree,” states Tara Wirth. “That position is too ‘bottomline’ oriented. It’s not fair to delay payments only to supplierswho don’t charge interest for late payments. Most suppliers in thatcategory are ones we have dealt with for years; selecting thesesuppliers would be taking advantage of the excellent relationshipswe have developed over the years. The fair thing to do is to makepro-rata payments to each supplier.”
“Well, making pro-rata payments to each supplier means that allour suppliers will be upset because no one receives full payment,”comments Sue Myling. “I believe it is most important to maintaingood relations with our long-term suppliers; we should pay themcurrently and delay payments to our newer suppliers. The interestcosts we end up paying these newer suppliers is the price we mustpay to keep our long-term relationships solid.”
Points toDiscuss:
DELIVERABLE: Please submit thefollowing through Moodle:
Note: Your workwill be graded on both your discussion of the questions related tothe scenario (critical thinking) and your writing (rhetoricalelements), with 80% of the grade coming from critical thinking and20% from the rhetorical elements.