The net income of Simon & Hobbs, a department store, decreased sharply during 2000. Carol Simon, owner of the store, anticipates the need for a bank loan in 2001. Late in 2000, Simon instructs the store's accountant to record a $10,000 sale of furniture to the Simon familv, even though the goods will not be shipped from the manufacturer until January 2001. Simon also tells the accountant nor to make the following December 31, 2000, adjusting entries: Salaries owed to employees.......... Prepaid insurance that has expired.. $900 400 Required 1. Compute the overall effects of these transactions on the store's reported income for 2000. 2. Why is Simon taking this action? Is her action ethical? Give your reason, identifying the parties helped and the parties harmed by Simon's action. 3. As a personal friend, what advice would you give the accountant?