Full Disclosure in Financial Reporting, assignment help

You
are a recently-hired accountant at Greenwood Company, a small
corporation that does a seasonal business of selling snow removal
equipment, with most of its sales to retailers occurring in the last two
quarters of the calendar year. Production is particularly heavy during
the second quarter, in preparation for these sales.

In
the process of preparing Greenwood Company’s 2015’s first quarter
interim report, you noticed and inquired about an account titled
Miscellaneous Factory Assets for $140,000. The controller asked you to
include it in long-term assets although that was the amount spent on
repairs and maintenance during the first quarter. The controller didn’t
want to show a loss, which is what would happen if the $140,000 were
expensed in quarter 1. Instead, Greenwood would book the expense in the
quarter it will have the least effect on net income. The controller
argued that it makes no difference, since the company’s total yearly
income is the same regardless of the quarter repairs and maintenance
expense is reported.

Respond to the controller’s explanation from financial reporting and ethical perspectives.