ecg ga.docx - The directors of MRI Chemicals(the Company...

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The directors of MRI Chemicals (“the Company”) are of the view that the Company requires a further significant injection of operating capital as part of its expansion plans to increase existing production capacity so that the Company can meet projected future orders of chemicals as well as venture overseas. You have recently completed your accounting degree and have spent your first six months after graduation, as trainee accountant in MRI Chemicals. You discovered that new chemical products with high probabilities of earning sufficient future revenues to recover costs are capitalised . You find out that one particular research and development project, already capitalised on the books , is in serious doubt regarding its ability to generate sufficient future revenues . You confront your supervisor, Mr. Lam the Chief Accountant, who reluctantly admits to this fact . You soon learn that the chief accountant’s bonus is performance-related based on the company’s annual profits
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