Reference no: EM132703441

You have recently been employed by a large retail chain that sells sporting goods. One of your tasks is to help prepare periodic financial statements for external distribution. The chain's largest creditor, National Savings & Loan, requires quarterly financial statements, and you are currently working on the statements for the three-month period ending June 30, 2018. During the months of May and June, the company spent $1,200,000 on a hefty radio and TV advertising campaign. The $1,200,000 included the costs of producing the commercials as well as the radio and TV time purchased to air the commercials. All of the costs were charged to advertising expenses. The company's chief financial officer (CFO) has asked you to prepare a June 30 adjusting entry to remove the costs from advertising expenses and to set up an asset called prepaid advertising that will be expensed in July. The CFO explained that "This advertising campaign has led to significant sales in May and June and think it will continue to bring in customers through the month of July. By recording the ad costs as an asset, we can match the cost of the advertising with the additional July sales. Besides, if we expense the advertising in May and June, we will show an operating loss on our income statement for the quarter. The bank requires that we continue to show quarterly profits in order to maintain our loan in good standing."

Question 1: Analyze the ethical dilemma presented above by using the Analytical Model for Ethical Decisions

Question 2: Determine the facts of the situation (the who, what, where, when, and how).

Question 3: Identify the ethical issue and the stakeholders.

Question 4: Identify the values related to the situation.

Question 5: Specify the alternative courses of action.

Question 6: Evaluate the courses of action in terms of their consistency with the values identified in step 3.

Question 7: Identify the consequences of each possible course of action.

Question 8: Make your decision