The document discusses several topics related to business ethics including whistleblowing, employee loyalty, and justifications for whistleblowing. It summarizes the views of two theorists, Michael Davis and Ronald Duska, on whistleblowing. Davis proposes the standard theory and complicity theory to analyze when whistleblowing is justified. The standard theory uses a cost-benefit analysis while the complicity theory asks if the whistleblower contributed to the wrongdoing. Duska believes whistleblowing requires no justification since employees owe no loyalty to businesses, which are only concerned with profits.

1. 11-16 below begins with : the stockholders equity ….
11-1A there are two pics with the information for this part….
First is below starts with oxygen ci is incorporated…….
The rest of the information for this problem is below…
11-2A is below……
BTN 11-3 is below
Due process:
Right to have a just cause: substantial
Right to a hearing, etc.: procedural
Whistleblowing:
As an employee I have a duty to be loyal to the employer, i.e.
help the employer be successful.
Some people think that it is always wrong to blow the whistle,

2. because it is disloyal.
If we are allowed to blow the whistle, then we need to justify
that decision.
Michael Davis: he thinks that we can justify whistle-blowing
Ronald Duska: whistle-blowing is not a moral issue as such, we
have a right to reveal any information we like.
Davis:
Standard theory: it is supposed to reflect what most people
consider as whistle-blowing and what they find is justifiable to
do.
Consequentialist: the consequences count.
Required/permissible whistle-blowing:
It is permissible if we have tried everything to solve the issue,
but we cannot say for sure that there is a threat: permissible.
Required, it is our duty to blow the whistle: we can ascertain
objectively that there is a threat and it is possible that we can
prevent the harm.
The theory is based on a cost-benefit analysis: what happens to
the whistle-blower himself/herself is also relevant to consider.
The paradigm case of whistle-blowing: Boisjoly case, 0-rings:
Test the standard theory:
Paradox 1: the whistleblower does not consider the harm he may
do to himself.
Paradox 2: prevention of harm is not relevant, because the
accident had already happened.
Paradox 3: failure. It is not relevant if we prevent any harm.
Complicity theory: Davis’s attempt to improve our theory of

3. whistle-blowing.
Complicity theory: non-consequentialist, what is morally
relevant to discuss is if we contribute to any wrong-doing or
not. If we do, then we should blow the whistle. If we don’t, then
we should not.
1st condition: what you reveal derives from your work
2nd condition: voluntary member
3rd condition: the organization has to be legitimate, a criminal
organ. Cannot be considered legitimate
4th condition: you contribute to the wrong-doing, unless you
blow the whistle.
The paradigm case of whistle-blowing: the Boisjoly case
We avoid the paradox of burden: Boisjoly did not consider the
consequences for himself
We avoid the paradox of preventing harm: it is not what should
be considered
The paradox of missing the point of moral action: sometimes we
are responsible even if we do not cause the problem.
Duska: business is all about profits, the shareholder theory.
There is no loyalty in the business world:
1st reason: it is about profits
2nd reason: you can only be loyal to individuals, not to abstract
entities.
Individualism: loyalty is a relationship between individuals
independent of profits considerations
Holism: rejected
Conclusion: whistle-blowing is not a moral issue, because we do

4. not owe anybody loyalty in business.
Online quiz 3
Questions 1-5 are multiple-choice questions. You can only
choose one answer to each multiple-choice question.
Questions 6-7 are essay questions about whistle-blowing.
Deadline: Thursday, November 8, 10 PM.
1. The agency that regulates safety and health issues on
workplaces is:
1. SHOA
2. HOSA
3. SAHO
4. OSHA
2. The doctrine of employment at will is:
1. A moral principle
2. A common law principle
3. A legitimate principle
4. A liberal principle
3. The following rule is a common law defense for employers in
case of accidents on workplaces:
1. The doctrine of negligence
2. The doctrine of contributory negligence
3. The doctrine of acceptable risk
4. None of these
4. It is possible to prosecute employers for homicide or
manslaughter in case of accidents on workplaces:
1. True

5. 2. False
3. True if the employee has no contract
4. False if the employee has a contract
5. It is possible for employees to voluntarily accept any risk of
injury or even death:
1. True
2. False
3. True in the private sector, but not in the public sector
4. False in the private sector, but not in the public sector
6. Please discuss Davis’s comparison between the standard
theory and the complicity theory of whistle-blowing. You
should consider the following questions:
What is whistle-blowing? Why is whistle-blowing an issue?
What principles regulate whistle-blowing? Is his comparison
fair? Do the two theories have different ethical concerns? How
does Davis test the theories?
7. Explain briefly why Duska does not believe that we need to
justify whistle-blowing.
Chapter 11
Quick Study 11-16 (10 minutes)
Total stockholders' equity
Less equity attributable to preferred shares:
Call price (10,000 shares x $30)

6. Equity applicable to common shares
Book value of common shares ($620,000/75,000 shares)
PROBLEM SET A
Problem 11-1A (30 minutes)
Part 1
a.
To record sale of 5,000 shares of $25 par value common stock
for $30 per share.
b.
To record issuance of 2,500 shares of $25 par value common
stock to the company’s promoters for their efforts in organizing
the company when the market value is $30 per share.
c.
To record acquisition of assets and liabilities by issuing 1,000
shares of $25 par value common stock at $40 per share.
d.
To record sale of 1,500 shares of $25 par value common stock
for $40 per share.
Part 2
Number of outstanding shares

7. Issued in (a)
Issued in (b)
Issued in (c)
Issued in (d)
Total
Part 3
Minimum legal capital
=
Part 4
Total contributed capital from common stockholders
From transaction (a)
From transaction (b)
From transaction (c)

8. From transaction (d)
Total contributed capital
Part 5
Book value per common share
Total stockholders’ equity (given)
Outstanding shares (from Part 2)
Book value per common share
Calculations:
Problem 11-2A (60 minutes)
Part 1 You can place your calculations in the description line
Jan.
1
Treasury Stock, Common
Cash

9. Jan.
5Retained Earnings
Common Dividend Payable
Feb.
28
Common Dividend Payable
Cash

10. July
6
Cash*
Treasury Stock, Common**
Aug.
22
Cash*

11. Paid-In Capital, Treasury Stock
Retained Earnings
Treasury Stock, Common**
Sept.
5Retained Earnings
Common Dividend Payable

12. Oct.
28
Common Dividend Payable
Cash
Dec.
31
Income Summary
Retained Earnings

13. Part 2
CONTEXT CORPORATION
Statement of Retained Earnings
For Year Ended December 31, 2012
Retained earnings, Dec. 31, 2011
Plus net income
Less:
Cash dividends declared
Treasury stock reissuances
Retained earnings, Dec. 31, 2012
Part 3
conText CORPORATION
Stockholders’ Equity Section of the Balance Sheet

14. December 31, 2012
Common stock($10 par value, 50,000 shares
authorized, 20,000 shares issued and outstanding
Paid-in capital in excess of par value,
common stock
Total contributed capital
Retained earnings (from part 2)
Total stockholders’ equity
Ethics Challenge — BTN 11-3
©McGraw-Hill Companies, 2012
596
Financial Accounting, 6th Edition
©McGraw-Hill Companies, 2012
595
Solution
s Manual, Chapter 11