Creative Essay

585 WordsApr 21, 20133 Pages
Creative Toys: A Case Study in Accounting Ethics And Professionalism Junicah D. Richardson North Carolina Wesleyn College Creative Toys: A Case Study in Accounting Ethics And Professionalism I will be discussing my views on the case study of Creative Toys, Inc. I will assess the information provided, and give feedback accordingly pertaining to the decision at hand. I will provide supporting information on what I feel the effective actions should be. Analysis The financial reports are provided quarterly for review to users, and allow a means for analysis at various times throughout the year. This would allow for another opportunity for an analysis of the company standings. Mr. Gurchick’s position that inventory could be written down in the fourth quarter are reasonable when looking at the company’s previous quarterly financial reports. The information shows that the company does see higher sales in historically in the later part of the year. However, Mr. Gurchick could have used this as a planning tool for obtaining raw materials, and in keeping inventory levels down. He also could have adjusted production levels to ensure that finished goods did not increase inventory dollars on hand. I feel that he missed opportunities to use the previous quarter information effectively. I think the above planning could have helped the situation, and allowance may not be needed. To take an allowance now could make the company have a negative impact on the financial reporting. The company could end up seeing an overstatement on the income statement if the sales don’t come in as expect, which will lead to adjustments. This will decrease net income on the Income Statements. Statements made in the last couple of paragraphs leads me to believe that Mr. Gurchick is more interested in bonuses top management will receive rather than provided the best information to potential

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