Download In-Class Exercise : Applying the Research Steps

Name: ___________________________
In-Class Exercise : Applying the Research Steps
Ribbit is a small company that operates in Florida by marketing grow-a-frog kits to large
toy stores and discount retailers. Each grow-a-frog kit contains a small plastic aquarium
tank, gravel, a plastic plant, and a coupon redeemable for one live tadpole. A large
inventory of tadpoles are kept on hand at all times. To ensure a ready supply of tadpoles,
one thousand adult frogs are kept on hand. The reproductive life of an adult frog is about
nine months. At that time, the frogs are harvested and sold to J. Lafitte’s Fine FrogLegs.
Both the adult frogs and the tadpoles were classified as inventory on Ribbit’s financial
statements. Recently, through selective breeding, the reproductive life of the adult frogs
has been extended to three years.
1. What is the potential accounting problem?
2. Prepare a problem statement or question.
3. Identify two plausible alternatives/solutions for the accounting issue identified.