Kamloops Corp

Multiple Choice

Kamloops Corp.has several years of declining results.The Board of Directors hired new management to turn the company around and have offered the new management a bonus based on the increase in net income in their first full year of operation.The new management team took over in the middle of the 2013 fiscal year.Which of the following could management implement to ensure that they get the largest bonus possible?

A) Decrease the allowance for uncollectibles from 5% of credit sales to 3% only for 2013.
B) Decrease the allowance for uncollectibles from 5% of credit sales to 3%, starting in 2014.
C) Increase the allowance for uncollectibles from 3% of credit sales to 5% starting in 2014.
D) Increase the allowance for uncollectibles from 3% of credit sales to 5% only for 2013.