FNA_Case12_3 - FNA 1002X Financial Accounting Group...

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FNA 1002X Financial Accounting Group Presentation Benny, Yiwen and π Case 12.3
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NUS Presentation Title 2006 CASE 12.3 Lookin’ good? Window Dressing! Proposals to achieve short-term goals
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NUS Presentation Title 2006 CASE 12.3 – Background (late summer) General Wheels, Inc. A large issue of bonds payable will mature next March. Needs to issue stock or new bonds to raise the money. Unsatisfactory performance in recent years. A ‘good looking’ financial statements dated this coming Dec 31! Consider only short-term effect!
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CASE 12.3 - 1 Changing from LIFO to FIFO, the company will report Lower COGS in its balance sheet (assume that the cost of each unit increasing). That will result in a higher gross profit, which, in turn, increases the Net Income. (Income statement works in matching principle) Cost flow assumptions of the inventory has NOTHING to do with cash flow. Proposal
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FNA_Case12_3 - FNA 1002X Financial Accounting Group...

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