The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
University
| Teaching Since: | Apr 2017 |
| Last Sign in: | 441 Weeks Ago, 1 Day Ago |
| Questions Answered: | 9562 |
| Tutorials Posted: | 9559 |
bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
Roy Akins was the accounting manager at Zelco, Inc., a tire manufacturer, and he played golf with Hugh Stallings, the CEO, who was something of a celebrity in the community. The CEO stood to earn a substantial bonus if Zelco increased net income by year-end. Roy was eager to get into Hugh’s elite social circle; he boasted to Hugh that he knew some accounting tricks that could increase company income by simply revising a few journal entries for rental payments on storage units. At the end of the year, Roy changed the debits from ?orent expense?? to ?oprepaid rent?? on several entries. Later, Hugh got his bonus, and the deviations were never discovered.
Requirements
1. How did the change in the journal entries affect the net income of the company at year-end?
2. Who gained and who lost as a result of these actions?
-----------