Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

TIF 5-1 Ethics in Action Margie Johnson is a staff accountant at ToolEx Company, a manufacturer of tools and equip- ment. The company is under

image text in transcribed

TIF 5-1 Ethics in Action Margie Johnson is a staff accountant at ToolEx Company, a manufacturer of tools and equip- ment. The company is under pressure from investors to increase earnings, and the president of the company expects the accounting department to "make this happen." Margie's boss, who has been a mentor to her, is concerned that if earnings do not increase, he will be terminated. Shortly after the end of the fiscal year, the company performs a physical count of the inventory. When Margie compares the physical count to the balance in the inventory account, she finds a significant amount of inventory shrinkage. The amount is so large that it will result in a significant drop in earnings this period. Margie's boss asks her not to make the adjusting entry for shrinkage this period. He assures her that they will get caught up" on shrinkage in the next period, after the pressure is off to reach this period's earnings goal. Margie's boss asks her to do this as a personal favor to him. What should Margie do in this situation? Why

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Survey of Accounting

Authors: Carl S Warren

6th edition

978-113318912, 1133189121, 978-1133189121

More Books

Students also viewed these Accounting questions

Question

How can evaluation of LMD become more than an act of faith?

Answered: 1 week ago