SAN FRANCISCO -- After the news that one of Silicon Valley's stars secretly funded a lawsuit to bring down a gossip site, the overwhelming response in the tech community has been: More power to him.

Peter Thiel -- Facebook investor, PayPal co-founder and a billionaire with a highly developed instinct for revenge -- is being hailed by the Valley's elite for his stealthy actions against Gawker Media, whose Valleywag gossip blog outed him as g ay and irritated other important tech people during its brief existence. The suit, brought by the professional wrestler Hulk Hogan over a sex tape, resulted in a $140 million verdict against Gawker.

With its response, the tech community's message is clear: Treat us the way we want to be treated or we might retaliate. Even though Silicon Valley professes to be for free speech -- this is where Twitter was invented, after all -- the reaction opens a window into the thinking of the digerati, who are becoming more guarded and elusive even as their products make the world more transparent.

Given Mr. Thiel's "beliefs and objectives, I can't fault him for his approach," Parker Thompson, a partner at the venture capital firm 500 Startups, said in an interview.

Mr. Thompson was just one of dozens of techies in Silicon Valley who talked or tweeted their approval of Mr. Thiel and their disapproval, or worse, of Gawker and Valleywag in the last few days.

"Click bait journalists need to be taught lessons," said the billionaire Vinod Khosla, whose efforts to close off public access to a beach on his property were covered by Valleywag.

Gawker "desperately persisted in trying to destroy people without basis. No accountability," said the venture capitalist Chris Sacca.

"Thank you @peterthiel," wrote Jessica Livingston, co-founder of the influential start-up incubator Y Combinator, which was occasionally tweaked by Valleywag.

At least one tech billionaire, however, is on Gawker's side. Pierre Omidyar, founder of eBay, tweeted, "People who oppose even the slightest common sense limits on Second Amendment should understand the same principle applies to First."

Late Friday, First Look Media, which was founded by Mr. Omidyar, said that in keeping with its mission to protect the First Amendment, it would be helping to organize supporting briefs for Gawker's appeal.

"The possibility that Gawker may have to post a bond for $50 million or more just to be able to

pursue its right to appeal the jury's verdict raises serious concerns about press freedom,’ Lynn

Oberlander, general counsel for First Look, said in a statement.

‘We welcome the support at the appellate level,'' Gawker said in its own statement.

In some ways Silicon Valley's reaction is not surprising. A journalist's job, at least in theory, is to ask

questions and print the truth, which means it is less than loved in citadels of power. But in Silicon

Valley, even the media hates the media.

“Gawker can burn in hell," the TechCrunch founder Michael Arrington said on Twitter, though he

also called Mr. Thiel "cowardly" for not being open about financing the lawsuits against Gawker.

TechCrunch began as a site that worked hand in hand with start-ups to chart their progress.

For Ken Shotts, who teaches ethics and strategy at the Stanford Graduate School of Business, Mr.

Thiel's secret campaign against Gawker brought to mind General Motors’ pursuit of Ralph Nader 50

years ago. G.M. set private detectives on Mr. Nader to get the dirt on him that would nullify his

criticism of its Corvair car. G.M. went beyond the pale, and was punished. The president of G.M. was

forced to appear before Congress and apologize for harassing and intimidating the company's critic.

“Companies face constraints," said Mr. Shotts. "That's a good thing. Individuals are less

constrained, and billionaires hardly at all."

From this perspective, what Mr. Thiel did was less of an aberration and more of that old Silicon

Valley stand-by: a new product launch. It is now out of stealth mode and getting good reviews

among potential users.

As a result, Mr. Shotts said, "I wouldn't be surprised to see more cases like this."

The situation is complicated by the fact that these days rich tech companies, their owners or

venture capitalists are as much the owners and producers of the media as the subject. With the

traditional media in a weakened state, it is a trend that seems to be accelerating.

Andreessen Horowitz, one of Silicon Valley's most prominent venture firms, owns a stake in

BuzzFeed and recently increased its investment in Medium, a platform that also produces content.

Facebook came under scrutiny this month after reports from Gizmodo, a Gawker property, that it

was playing down conservative news.

Facebook and Andreesen Horowitz declined to comment.

“Gawker tried to have it both ways,’ Venky Ganesan, managing director of the venture capital firm

Menlo Ventures, said in an interview. "They wanted to be taken seriously as journalists, yet they

didn't follow all the norms."

Twenty-five years ago, tech coverage was the domain of geeks and trade reporters -- people who

understood their way around a motherboard, were excited by it and wouldn't dream of crossing

certain boundaries. Now, with tech at its zenith, much of the coverage of the industry is still done by

enthusiasts. Combine this with the need to get the power players to come to the media's

conferences and there is a real reluctance to look behind the scenes.

Elizabeth Spiers, who was the first Gawker writer and is now an entrepreneur, noted on her blog

that the ‘tech press is largely fawning toward successful entrepreneurs and venture capitalists, and

mostly unintentionally."

The result, she wrote, is ‘a sense of entitlement in the industry where denizens of Silicon Valley

expect the media to actively support them and any negative portrayals are met with real anger and

resentment, even when they're 100 percent accurate."

Sam Altman, the president of Y Combinator, tried to chart a middle ground between Gawker and

Mr. Thiel in a series of posts on Twitter.

"Gawker is disgusting for outing people, publishing sex tapes, etc.,"' he wrote, but also posted that

“it'd be bad if rich people could start silencing the media." He concluded by blaming the legal

system.

Case Questions

1. From the article, describe the role of motivation and ability in their actions for:

a. Peter Theil (5 pts)

b. Hulk Hogan (5 pts)

c. Gawker Media Journalists (5 pts)

Restrict to the context presented in this case and use the concepts given in the chapter

to explain.

Faldo Corp. is a public company and has 100,000 common shares outstanding. In 2020, the company reported income from continuing operations before income tax of $2,710,000. Additional transactions not considered in the $2,710,000 are as follows:

Analyze the above information and prepare an income statement for the year 2020, starting with income from continuing operations before income tax. Calculate earnings per share as it should be shown on the face of the income statement. (Assume a total effective tax rate of 25% on all items, unless otherwise indicated.) (Round per share answers to 2 decimal places, e.g. 52.75. Disclose Discontinued operations tax information separately.)

2. A U.S. company, with an accounting year end of December 31, engages in the transactions indicated below. The company’s inventory allocation method is FIFO and they use the perpetual inventory system. prepare the entries to recognize the above transactions

1. On May 20, when the exchange rate was $1.40/£, a U.S. company purchased merchandise from a U.K. supplier for £10,000.
2. On June 5 the U.S. company acquired the required amount of U.K. £s and paid for the merchandise when the exchange rate was $1.38/£.
3. On August 15, when the exchange rate was $1.23/€, the U.S. company sold the merchandise purchased from the U.K. supplier to a customer in Belgium at an invoice price of €16,000.
4. On September 6, when the exchange rate was $1.21/€, the U.S. company received payment of €16,000 from the Belgian customer

Horizon Corporation manufactures personal computers. The company began operation in 2013 and reported profits for the years 2015 through 2018. Due primarily to increased competition and price slashing in the industry, 2019's income statement reported a loss of $20 million. Just before the end of the 2020 fiscal year, a memo from the company's chief financial officer to Jim Fielding, the company controller, included the following comments:

"If we don't do something about the large amount of unsold computers already manufactured, our auditors will require us to write them off. The resulting loss for 2020 will cause a violation of our debt covenants and force the company into bankruptcy. I suggest that you ship half of our inventory to J.B. Sales Inc., in Oklahoma City. I know the company's president and he will accept the merchandise and acknowledge the shipment as a purchase. We can record the sale in 2018 which will boost profits to an acceptable level. Then J.B. Sales will simply return the merchandise in 2019 after the financial statements have been issued.

Comment on the appropriateness of the suggestion made by the controller to fulfill financial reporting objectives, Consider relevant ethical issues in your response. A basic framework to address ethical decision-making is provided:

Ethics Discussion in Accounting:

There are many frameworks for the analysis of ethical dilemmas in Accounting. The basic steps include:

1. Identify the facts--who, what, where, when, and how.

2. Identify the ethical issue and the stakeholders such as shareholders, creditors, management, employees, potential investors, and the community.

3. Identify the values relevant to the situation such as confidentiality verses the right to know.

4. Specify the alternative courses of action.

5. Identify a course of action and the consequences of that action.¹

^{1. Adapted from Harold Q. Langenderfer and Joanne W. Rockness, "Integrating Ethics into the Accounting Curriculum:Issues, Problems, and Solutions," Issues in Accounting Education (Spring 1989)}

Select ONE of the following 2 options to complete

-Conduct an indepth interview on a selected product or service with 5 people asking at least 5 developed questions to each person. ( More questions may emerge as each interview progresses). Summarize your results.

1. A US company designs its products in US but manufactures those products in

China.

a) What type of currency exposure the US Company will face?

b) List three strategies to manage the operation exposure, and explain how

they can be used to hedge the operation exposure.

2. A US company has a manufacturing subsidiary in Brazil and it categorizes

Brazilian Real as the functional currency.

a) Explains the concept of functional currency;

b) Under US accounting, what currency translation method it will use for this

subsidiary?

c) Explain the benefit of using this translation method.

3. Join a research team and the team decides on a topic. < don't bother

Starware Software was founded last year to develop software for gaming applications. The founder initially invested

$ 800 comma 000$800,000

and received

88

million shares of stock. Starware now needs to raise a second round of​ capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest

$ 1.60$1.60

million and wants to own

31 %31%

of the company after the investment is completed.

a. How many shares must the venture capitalist receive to end up with

31 %31%

of the​ company? What is the implied price per share of this funding​ round?

b. What will the value of the whole firm be after this investment​ (the post-money​ valuation)?

You are the new Chief Information Officer at a mid-sized community medical center. One of the many possible improvements that the CEO is discussing with you is the introduction of e-prescribing, that is, the transmission of prescriptions from doctors to pharmacies over a secure Internet network via computers or hand-held devices. While not resorting to stereotypes, the CEO expressed concern that some of the more senior physicians may be the hardest to involve in the change. What suggestions do you have for the CEO as to how to smooth this transition for senior physicians or other physicians reluctant to change their prescribing practices?

5.            Black Corporation had a 1/1/20 balance in the Allowance for Doubtful Accounts of $21,000. The balance in Accounts Receivable was $420,000 at 1/1 and $504,000 at 12/31. At 12/31/20, Black estimates that 5% of accounts receivable will prove to be uncollectible. What should Black report as its Allowance for Doubtful Accounts at 12/31/20?

6.            David Company uses the gross method to record sales made on credit. On June 10, 2020, it sold goods worth $250,000 with terms 2/10, n/30 to Charles Inc. On June 19, 2020, David received payment for 1/2 of the amount due from Charles Inc. David’s fiscal year end is on June 30, 2020. What amount will be reported in the financial statements for the accounts receivable due from Charles Inc.?

7.            Becky had net sales (all on account) in 2020 of $8,000,000. At December 31, 2020, before adjusting entries, the balances in accounts receivable was a $1,000,000 debit. Becky estimates that 3% of its accounts receivable will prove to be uncollectible. What is the net amount expected to be collected of the receivables reported on the financial statements at December 31, 2020? (Net A/R)

8.            Wellington Corp. has outstanding accounts receivable totaling $1.27 million as of December 31. If the company estimates that 2% of its accounts receivable will be uncollectible, what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense?