Requirements: Minimum of 75-150 words initial post.

Prompt: M.K. Gallant is president of Kranbrack Corporation, a company whose stock is traded on a national exchange. In a meeting with investment analysts at the beginning of the year, Gallant had predicted that the company's earnings wouls grow by 20% this year. Unfortunately, sales have been less than expected for the year, and Gallant concluded within two weeks of the end of the fiscal year that it would be impossible to report an increase in earnings as large as predicted unless some drastic action was taken. Accordingly, Gallant has ordered that wherever possible, expenditures should be postponed to the new year-including canceling or postponing orders with suppliers, delaying planned maintenance and training, and cutting back on end-of-year advertising and travel. Additionally, Gallant ordered the company's controller to carefully scrutinize all costs that are currently classified as period costs and reclassify as many as possible to production costs. The company is expected to have substantial inventories as the end of the year. Discuss why would reclassifying period costs as product costs increase this period's reported earnings. Do you believe Gallant's actions are ethical? Why or why not? If you were the controller, discuss how Genesis 37:1-37 would influence your response to Gallant's order.