The net income of Steinbach & Sons, a department store, decreased sharply in 2014. Mort Steinbach, manager of the store, anticipates the need for a bank loan in 2015. Late in 2014, Steinbach instructs the store's accountant to record a $2000 sales of furniture to the Steinbach family, even though the goods will not be shipped from the manufacture until January 2015. Steinbach also tell the accountant not to make the following December 31, 2014, adjusting entries:
Salaried owned to employees $900
Prepaid insurance that has expired $400

The manager is falsifying financial records by improperly posting transactions or not posting transactions. Also you need to think about U.S. GAAP because certain assumptions, principles and contraints are being violated.

The net income of Steinbach & Sons, a department store, decreased sharply in 2014. Mort Steinbach, manager of the store, anticipates the need for a bank loan in 2015. Late in 2014, Steinbach instructs the store's accountant to record a $2000 sales of furniture to the Steinbach family, even though the goods will not be shipped from the manufacture until January 2015. Steinbach also tell the accountant not to make the following December 31, 2014, adjusting entries:
Salaried owned to employees $900
Prepaid insurance that has expired $400

Question- Compute the overall effects of these transcation on the store's reported income for 2014?
Why is Steinbach taking this action? Is this action ethical?

You need to figure out the effects of the transactions. For example the sale of $2,000 should have been to unearned revenue, so your net income is overstated by $2,000

The Salaries were not posted as an expense so your expenses is understated and your net income is overstated.

Your insurance expense is understated so your net income is overstated.

So for all your transations net income is overstated by the total of all the amounts.