A Corporation manufactures personal computers. The company began operations in 2016 and reported profits for the years 2016-2019. Due primarily to increased competition and price slashing in the industry, 2020s income statement reported a loss of $20 million. Just before the end of the 2021 fiscal year, a memo from the companys chief financial officer to James F., the company controller, included the following comments:

If we dont do something about the large amount of unsold computers already manufactured, our auditors will require us to write them off. The resulting loss for 2021 will cause a violation of our debt covenants and force the company into bankruptcy. I suggest that you ship half of our inventory to XYZ Sales, Inc., in Oklahoma City. I know the companys president and he will accept the merchandise and acknowledge the shipment as a purchase. We can record the sale in 2021 which will boost profits to an acceptable level. Then XYZ Sales will simply return the merchandise in 2022 after the financial statements have been issued.

James F. is determining what to do and has reached out to you for help. In your initial post discuss the ethical dilemma faced by James F. Including the following:

• Summary of situation including relevant facts. Include connection to revenue recognition principle.
• Identify the ethical dilemma(s).
• Identify all the stakeholders (those impacted by this situation).
• Include possible courses of action AND implications of course of action (minimum 2).
• What course of action do you think James should take? Why?