Florida International University Moonstay Accounts Case Study Discussion

Please create an introduction and answer the following question from the case “moonstay  ( in case study book, case No. 15 )

Question “  Moonstay’s accountants originally charged $43.4 million of cash expen-

ditures made in 1997 to the restructuring accrual account established in

late 1996. According to the review conducted by the two CPA firms, only

$21.2 million of cash paid in 1997 actually related to the restructuring of

Moonstay. What was theeffect on the 1997 reported earnings of improperly

charging (debiting) $22 million to the restructuring accrual account? What

are some of the accounts that probably should have been debited instead?

(Hint: some of the amounts charged to the restructuring reserve involved

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