Scenario 1.

The owners of Waren Sports want to sell their business. To get a good price they decide to make some alterations to their 2017 records so that their profits increase by $30,000.

Identify four alterations that could be made to their records to achieve a $30,000 increase in their profits. Provide the specific transactions that you would create and quantify the effect of each.

Scenario 2.

The owners of Waren Sports don’t like paying federal taxes. They decide to reduce their profits by $30,000 by falsifying some of their accounting records for 2017.

Identify four alterations that could be made to their records to achieve a $30,000 decrease in their profits. Provide the specific transactions that you would alter and quantify the effect of each.

Provide your answers in the following format

• For each scenario, prepare general journals that show the accounts that will be altered. For each journal provide an explanation that explains what you are doing and how it increases or decreases your profit
• For each scenario, prepare a schedule in the following format:

Date	General Journal (Account name/Explanation)	Debit	Credit
	Explanation:
	Explanation:
	Explanation:
	Explanation:

Balance sheet				Income and retained earnings statement
Account	Balance before	Balance after	Net impact on profit	Account	Balance before	Balance after	Net impact on profit
$30,000	$30,000