DE9-16 Determine whether each of the following actions in buying, selling, and accounting for inventories is ethical or unethical. Give your reason for each answer. 1. Lake Fork Motors consciously overstated purchases to produce a high figure for cost of goods sold (low amount of net income). The real reason was to decrease the company's income tax payments to the government. 2. In applying the lower-of-cost-or-market rule to inventories. Old World Restoration Co. recorded an excessively low market value for ending inventory. This allowed the com- pany to keep from paying income tax for the year. 3. Lamplight Fixtures Ltd. purchased lots of inventory shortly before year end to increase the LIFO cost of goods sold and decrease reported income for the year. 4. T&M Beauty Products delayed the purchase of inventory until after December 31, 20X2. in order to keep 20X2's cost of goods sold from growing too large. The delay in purchas- ing inventory helped net income of 20X2 to reach the level of profit demanded by the company's investors. 5. Calais Ferry Supply deliberately overstated ending inventory in order to report higher profits (net income).