Accounting > CASE STUDY > Case 14-3 (PolyMedica Cooperation) (All)

Case 14-3 (PolyMedica Cooperation)

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Case 14-3 PolyMedica Corporation (A) Prepared by Tamara Hurst for Professor C.E. Reese in partial fulfillment of the requirements for MAN 560-Finance for Non-Financial Managers School of Busine... ss/Graduate Studies St. Thomas University Miami Gardens, Fla. Term 6/Fall, 2017 September 2, 2017 https://www.coursehero.com/file/25024334/Case-14-3-PolyMedica-Cooperationdocx/ This study resource was shared via CourseHero.comTable of Contents Issues………………………………………………………………………………………………1 Facts……………………………………………………………………………………………..1-2 Analysis…………………………………………………………………………………………2-6 Conclusions………………………………………………………………………………………..6 Appendices………………………………………………………………………………………...7 Appendix A “Additional Recommendations”……………………………………………………7 2 https://www.coursehero.com/file/25024334/Case-14-3-PolyMedica-Cooperationdocx/ This study resource was shared via CourseHero.comIssues 1. Explain the difference between an asset and an expense. 2. Explain the role of advertising in the company’s customer-acquisition strategy. 3a. What are the arguments in favor of capitalizing the direct-response advertising expenditures? b. What are the arguments in favor expensing the direct-response advertising expenditures as incurred? c. As a CEO of PolyMedica, would you favor capitalizing or expensing the direct-response advertising costs? 4. What would be the impact of the company’s financial statement if PolyMedica had expensed the cost as incurred in 2003 and 2002? Calculate key balances that highlights any major differences. 5. As a CEO of the PolyMedica, how might you respond to this direct-response advertising accounting issue raised by the SEC and short sellers? [Show More]

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