The net income of Steinbach & Sons, the department store, decreased sharply during 2009. Mort Steinbach, owner of store, anticipates requirement for the bank loan in 2010. Late in 2009, Steinbach instructs store's accountant to record the $2,000 sale of furniture to Steinbach family, even though goods will not be shipped from manufacturer until January 2010. Steinbach also tells accountant to make given December 31, 2009, adjusting entries:
Salaries owed to employees...........................$900
Prepaid insurance that has expired.................$400
If suitable, include personal experience in the response.
Find effects of overall transactions on reported income for 2009? Why Steinbach take the actions?
Is it ethical? Explain why or why not?
What suggestion would you give the accountant? Why?
Is there the alternative action which is ethical to help situation?
Is there the alternative action which is not ethical which would help situation?