Please help! Ethics Case 18 8 The Swiss label maker; value of shares issued for equipment LO18 4 Bricker Graphics is a privately held company specializing in package labels. Representatives of

Please help!

Ethics Case 18–8

The Swiss label maker; value of shares issued for equipment

• LO18–4

Bricker Graphics is a privately held company specializing in package labels. Representatives of the firm have just returned from Switzerland, where a Swiss firm is manufacturing a custom-made high speed, color labeling machine. Confidence is high that the new machine will help rescue Bricker from sharply declining profitability. Bricker’s chief operating officer, Don Benson, has been under fire for not reaching the company’s performance goals of achieving a rate of return on assets of at least 12%.

The afternoon of his return from Switzerland, Benson called Susan Sharp into his office. Susan is Bricker’s Controller.

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Required:

How will Benson’s plan affect the return measure? What accounting issue is involved?

Is the proposal ethical?

Who would be affected if the proposal is implemented?

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