Threaded Discussion No. 4 Case Summary - Threaded...

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Threaded Discussion No. 4 Case Summary
Ethics Case Profit Manipulation 8–7Requirement 1Without purchase of the additional units:Sales (35,000 @ $60)$2,100,000Cost of goods sold (35,000 x $30)(1,050,000)Gross profit$1,050,000Due Jim Lester($1,050,000 x 20%)= $210,000With purchase of the additional units:Sales $2,100,000Cost of goods sold:20,000 x $40$800,00015,000 x $30450,000(1,250,000)Gross profit$ 850,000Due Jim Lester($850,000 x 20%)= $170,000Requirement 2Discussion should include these elements.Facts:If Moncrief purchases the additional units at the end of the year under aperiodic LIFO inventory system, the transaction results in a reduced payment toJim Lester, reduced profits to shareholders, and reduced income tax payments togovernment entities. By purchasing the additional units of Zelenex, Moncrief

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