BTN 18-1 Assume that you are the managerial accountant at Infostore, a manufacturer of hard drives, CDs, and DVDS. Its reporting year-end is December 31. The chief financial officer is concerned about having enough cash to pay the expected income tax bill because poor cash flow management. On November 15, the purchasing department purchased excess inventory of CD raw materials in anticipatic of rapid growth of this product beginning in January. To decrease the company's tax liability, the chief financial officer tells you to recon the purchase of this inventory as part of supplies and expense it in the current year, this would decrease the company's tax liability by increasing expenses. Required 1. In which account should the purchase of CD raw materials be recorded? 2. How should you respond to this request by the chief financial officer?

BTN 18-1 Assume that you are the managerial accountant at Infostore, a manufacturer of hard drives, CDs, and DVDS. Its reporting year-end is December 31. The chief financial officer is concerned about having enough cash to pay the expected income tax bill because poor cash flow management. On November 15, the purchasing department purchased excess inventory of CD raw materials in anticipatic of rapid growth of this product beginning in January. To decrease the company's tax liability, the chief financial officer tells you to recon the purchase of this inventory as part of supplies and expense it in the current year, this would decrease the company's tax liability by increasing expenses. Required 1. In which account should the purchase of CD raw materials be recorded? 2. How should you respond to this request by the chief financial officer?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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