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Since CDLee's Bonus Is Tied to Net Income,he Decided to Underestimate

Question 103

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Since C.D.Lee's bonus is tied to net income,he decided to underestimate the bad debts expense for the year ended December 31,2012.Which 2012 financial statements will be impacted by this underestimate of bad debts expense? Since bad debts expense is just an estimate,is this treatment ethical?

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The income statement (bad debts expense ...

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