Pierce Ice Cream Company Operates Several Ice Cream Shops Across

question 54

Essay

Pierce Ice Cream Company operates several ice cream shops across the United States.The company has plans to expand the number of shops during the coming year.This planned expansion will require a large bank loan.During the past 5 years,some periods were more profitable than others,and the President of Pierce has suggested to the company accountant that the depreciation and inventory valuation methods should be changed frequently.This change would allow the company to create the appearance that earnings were very consistent over the years.Discuss the merits of the President's suggestion regarding the financial statements.

Identify and distinguish between different organizational responses to uncertainty.

Recognize the significance and process of planning in organizations.

Comprehend the origins and development of Facebook as an example of successful planning and innovation.

Understand the relationship between planning and organizational functions.

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Definitions:

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its debt obligations by comparing its interest expenses to its earnings before interest and taxes (EBIT).

Net Income

The net income of a company, which is the remaining amount after deducting all expenses and taxes from the total revenue.

Warranty Expense

Warranty expense is the estimated cost a company expects to incur for repairing, replacing, or compensating for defective products under warranty.

Estimated Warranty Liability

A provision in the financial statements estimating the cost a company expects to incur under its product warranty commitments.