+1-415-670-9189
info@expertsmind.com
What ethical issue if any underlies the given case
Course:- Accounting Basics
Reference No.:- EM13903485




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Accounting Basics

Ethical Dilemma

The West Bay Company, owned and operated by Mohammad Salim, manufactures and sells different types of long life dairy products. The company has reported profits in the majority of years since the company's inception in 1972 and is projecting a profit in 2015 of $65000 down from $96000 in 2014.

Near the end of 2015, the company is in the process of applying for a bank loan. The loan proceeds will be used to replace manufacturing equipment necessary to modernize the manufacturing operation. In preparing the financial statements for the year, the chief accountant, Saleh Saeed , mentioned to Mohammad Salim that approximately $40000 of diary inventory near to be expired and should be written off as a loss in 2016. Mohammad is worried that the write-down would lower 2015 income to a level that might cause the bank to refuse the loan. Without the loan, it would be difficult for the company to compete. This could cause decreased future business and employees might have to be laid off. Mohammad is considering waiting until 2016 to write down the inventory. Saleh Saeed is contemplating his responsibilities in this situation?

Required:

Answer the following questions.

1. What ethical issue, if any, underlies the above case?

2. If there is ethical issue, which part will be affected by?

3. What alternatives should be considered?

4. Assess the consequences of the alternatives.

5. What decision would you recommend?




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
Prepare one compound journal entry as of December 31, 2011, for adjustment of the Semi-trucks account to reflect the correct balances as revealed by your schedule, assuming th
Sarah is examining the concession stands before going to watch a movie. The probability that she buys candy is 0.70. If she buys candy, there is a 0.40 probability that she
Your roommate is puzzled. During the last year, the company in which she is a stockholder reported a net loss of $675,000, yet its cash increased $321,000 during the same peri
Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?
A lottery has provided you with the following options: $350,000 today or $40,000 per year for 10 years. If you can earn 4% on your money indefinitely, which deal would you
A proprietary fund of a governmental entity has donor-restricted assets on its balance sheet. Which of the following best describes where and how those assets will be displa
The company had beginning merchandise inventory of $140,000, purchased additional merchandise inventory for $2,550,000, and had ending merchandise inventory of $180,000.
Research and address the elements of organizational effectiveness that will improve interactions in a presentation for senior leaders - Explain the concept of organizational