The net income of Steinbach & Sons, a landscaping company, decreased sharply during 2016. Mort Steinbach, owner and manager of the company, anticipates the need for a bank loan in 2017. Late in 2016, Steinbach instructs the company accountant to record $2000 service revenue for lascape services for the steinbach family, even though the services will not be performed until january, 2017. Steinbach also tells the accountant not to make the following December 31,2016, adjusting entries:

Salaries owed to employees................................................$900

Prepaid Insrance that has expired.......................................$400

1.Compute the overall effects of these transactions on the companys reported net income for 2016. 2.Why is Steinbech taking this action? Is his action ethical? Give your reasons, identifying the parties helped and the parties harmed by Steinbachs actions. 3.As a personal friend, what advise ould you give the accountant?