The net income ofDusekPhotography Company decreased sharply during 2016. PattyDusek owner of the company anticipates the need for a bank loan in 2017. Late in 2016Dusekinstructed TimLoftus the accountant and a personal friend of yours to record a $15000 sale of portraits to theDusekFamily. The photos will not be shot until January 2017.Dusekalso toldLoftusNOTto make the following December 31 2016 adjusting entries: 1.Compute the overall effect of thetransactionsand report in a full sentence. Is the income overstated or understated? 2. Are these actions ethical on the part ofDusek? Give support for your thinking. Who are the stakeholders who is harmed? Which factor legal or ethical seems to be taking precedence? Identify the potential consequences. 3. As a personal friend of Tim’s what advice do yougive him? (assume he asked)
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