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Accounting answers free
Aston corp wants its net income to be 7 million, not 3 million projected and only pay 3 million in taxes, besides extending depreciation and changing those methods from double decline to straight line, I don't know how to increase my net income while not paying anymore taxes. Answers do not have to be ethical, already thinking channel stuffing.
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An unethical approach to increase the desired income is to increase inventory. At year end, the amount of inventory sold has already been determined. Therefore additional units of inventory added to the company will not have an effect on the income statement. When a company increases its inventory, it defers some of its fixed manufacturing costs to its inventory rather than expensing it. This is known as absorption costing.
This is an unethical way of increasing desired income because it makes the company appear to be in better shape than it is. Companies should only increase inventory if they are projecting higher sales in the next operating cycle. By increasing inventory without expecting sales would eventually result in the inventory become obsolete. |
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