Decision Cases
(30-40 min.) Decision Case 1
Req. 1
Based solely on these balance sheets, Insley Sales Co. appears to be
the better credit risk because:
1. Queens Service has more assets ($150,000) than Insley Sales
($65,000), but Queens Service owes much more in liabilities
($130,000 versus $15,000 for Insley Sales). Insley Sales’
(20-30 min.) Decision Case 2
Req. 1
Flowers Unlimited, Inc.
Flowers Unlimited, Inc.
Income Statement
Balance Sheet
Year Ended Dec. 31, 2016
Dec. 31, 2016
Revenue…………
$140,0001
Cash……………
$ 6,000
$70,0004
Expenses………..
140,0002
Other assets….
90,0003
26,0005
Net income………
$ -0-
Total assets……
$96,000
$96,000
_____
1$100,000 + $40,000 = $140,000
2$80,000 + $50,000 + $10,000 = $140,000
3$100,000 − $50,000 + $40,000 = $90,000
4$60,000 + $10,000 = $70,000
Ethical Issue
Note to instructor: student responses will vary on this problem.
Keep the discussion pointed toward use of the multiple-criteria model
for making good ethical decisions, pointing out elements of students’
reasoning that may be faulty or incomplete. It might be useful to have
a debate or role play, assigning students to different sides of the
issue (for or against accepting a copy of the exam).
Req. 1
Req. 2
The stakeholders are:
a. You
(continued) Ethical Issue
Req. 3
Analysis of the problem:
Economic perspective: If use of the old exam turns out to help you (it
may not) you might improve your grade and allow you to retain your
scholarship. This might help you and your family financially. If you
use the exam to your unfair advantage, and you are reported, you and
possibly your friend might receive grades of F in the class although
you might otherwise have passed. This could cause adverse
(continued) Ethical Issue
the work of another without their permission. It is usually
accompanied by lying to cover it up, or at least, not revealing the
truth. Cheating violates other students’ rights to fair and equal
treatment. It violates the instructor’s rights to run a course as a “fair
Req. 4
It would be helpful to find out what the professor’s policies are with
respect to the use of fraternity and sorority test files. The university
might have a blanket policy on this. (Some students might spend a
little time researching this by reading the university’s honor code on
(continued) Ethical Issue
discuss the issue with the head of the department or the chair of the
university honor council.
Unfortunately, in this case, there is not much time. Researching the
issue in the university’s honor code takes valuable time away from
studying for the exam, which, if you do, could help you raise your
grade and solve the whole problem!
Req. 5
Cheating is very closely related to stealing, which is a form of fraud.
When employees steal from their companies, they steal property that
Focus on Financials: Apple Inc.
(20-30 min.)
1. Students can emphasize a variety of points regarding Apple Inc.,
and its industry. For example, a discussion on the product
2. Some important information in this portion of the financials is the
description of their distribution channels (third-party resellers),
3. Samsung, Google, Sony, or HP are some of Apple Inc.’s
competitors. It is important to identify competitors because
(continued) Apple Inc.
4. Net income, because it shows the overall result of all the revenues
minus all the expenses for a period. In effect, net income gives the
5. Apple Inc.’s largest expense is cost of sales. This is the cost of the
products that the company sells, such as iPhones, iPads, Apple
6. Total resources (total assets) at September 27, 2014.….$231,839
million
Amount owed (total liabilities) at September 27, 2014….$120,292
million
7. At September 28, 2013, Apple Inc. had $14,259 million of cash and
Focus on Analysis: Under Armour, Inc.
(30 min.)
1. Under Armour, Inc. is an athletic apparel company. Students can
emphasize a variety of points regarding Under Armour, Inc. and its
2. Note 1 states Under Armour is a developer, marketer and
3. Nike, Adidas, and Columbia Sportswear are some of Under Armour,
Inc.’s competitors. It is important to identify competitors because
(continued) Under Armour, Inc.
4. Under Armour, Inc.’s Accounting Equation (in millions):
Assets
=
Liabilities
+
Shareholders’ Equity
=
+
5. The result of operations for 2014 was a net income of $208,042
thousand. This is good news for Under Armour, Inc. Revenue
6. According to Under Armour, Inc.’s Consolidated Statements of
Stockholders’ Equity, the cause of the company’s large increase in
7. The Consolidated Balance Sheets report cash and cash
equivalents as part of the company’s financial position. The
Group Projects
Student responses will vary.