• Jane and George operate a gift boutiques in shopping malls. The partners split profits and losses equally, and each takes an annual withdrawal of $80,000. To even out the workload, Jane travels around the country inspecting their properties. George manages the business and serves as the accountant. From time to time, they use small amounts of store merchandise for personal use. In preparing for his daughter's wedding, George took inventory costing $7,000. He record the transaction with a debit to Cost of Goods Sold and credit to Merchandise Inventory.
  • How should George have recorded this transaction?
  • Discuss the ethical aspects of his action.