THE NET INCOME OF SIMON AND HOBBS, A DEPT.STORE,DECREASED SHARPLY DURING 2000.CAROL SIMON, OWNER OF THE STORE, ANTICIPATES THE NEED FOR A BANK LOAN IN 2001. lATE IN 2000, SIMON INSTRUCTS THE STORE'S ACCOUNTANT TO RECORD A 410,000 SALE OF FURNITURE TO THE SIMON FAMILY, EVEN THOUGH THE GOODS WILL NOT BE SHIPPED FROM THE MANUFACTURER UNTIL jAN. 2001. SIMON TELLS THE ACCOUNTNAT NOT TO MAKE THE FOLLOWING DEC. 31, 2000 ADJUSTING ENTRIES: SALARIE OWED TO EMPLOYESS $900, PREPAID INS. EXPIRED $400. wHY IS SIMON TAKING THIS ACTION? iS HER ACTION ETHICAL? GIVE REASON, IDENTIFYING THE PARTIES HELPED AND THE PARTIES HARMED BY SIMON'S ACTION.

You needn't shout.

Her action is not ethical. The employees are harmed because they're losing $900. I'm not sure about the rest, though.

Simon is taking this action to artificially inflate the net income of the store in order to make it seem more profitable than it actually is. This is done with the intention of increasing the chances of obtaining a bank loan in 2001.

However, Simon's action is not ethical for a few reasons. Firstly, recording a sale before the goods are even shipped violates the principle of revenue recognition, which states that revenue should only be recognized when the goods have been delivered or the services have been rendered. Second, by instructing the accountant to omit the adjusting entries for salaries owed to employees and prepaid insurance that have expired, Simon is misrepresenting the financial position of the business by understating expenses and overstating net income.

In terms of parties helped, Simon herself is the primary beneficiary as she stands to gain a higher chance of obtaining the bank loan. However, the parties harmed by Simon's actions include the bank (if they provide the loan based on incorrect financial information), the store's employees (if their salaries are not accounted for properly), and the store's stakeholders (who rely on accurate financial statements for decision-making).

To identify the parties harmed, one needs to consider the potential consequences of Simon's actions. The bank may be harmed if they grant a loan based on inaccurate financial information. The store's employees may also be harmed if their salaries are not properly recorded, potentially leading to delayed or incorrect payment. Finally, the store's stakeholders, including investors and creditors, may be harmed as they rely on accurate financial statements to assess the financial health and performance of the business.