Steve Holden, Controller for Glenda Company, Was Approached by Helena

question 39

Essay

Steve Holden, controller for Glenda Company, was approached by Helena Glenda, the CEO. Helena asked that Steve do something to increase net income from $94,000 to slightly over $100,000 to meet the requirements of a bank loan. Steve replaced a $9,000 debit to Payroll Tax Expense when recording the employer payroll taxes with a debit to Land, since the large balance in that account would not Required:
Was Helena's request, or Steve's action, ethical? Explain.

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Definitions:

Notes Payable

Financial obligations or loans evidenced by promissory notes, which the borrower promises to pay back to the lender according to agreed terms.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Liability Reported

The recording of an obligation or debt that a company owes to outside parties in the financial statements.

Balance Sheet

A financial record that lists a corporation's assets, obligations, and the equity held by shareholders at a particular time.