Hart Nance and Jason Symington operate gift boutiques in shopping malls. The partners split profits and losses equally, and each takes an annual withdrawal of $80,000. To even out the workload, Nance travels around the country inspecting their properties. Symington manages the business and serves as the accountant. From time to time, they each may use small amounts of store merchandise for personal use. In preparing for his daughter's wedding, Symington took inventory that cost $10,000. He recorded the transaction as follows: Accounts Debit Credit Cost of Goods Sold $10,000 Merchandise Inventory $10,000 What journal entry should Symington have used to record this transaction? Is Symington's transaction ethical? If so, please fully explain why it is ethical. If not, please fully explain why it is not ethical.
Chapter17 Ethical Case:
Hart Nance and Jason Symington operate gift boutiques in shopping malls. The partners split
|
Accounts |
Debit |
Credit |
|
Cost of Goods Sold |
$10,000 |
|
|
Merchandise Inventory |
$10,000 |
- What
journal entry should Symington have used to record this transaction? -
Is Symington's transaction ethical? If so, please fully explain why it is ethical. If not, please fully explain why it is not ethical.
In the case of a partner carrying cash or any valuable assets from the business for personal use, this will negatively affect the capital portion of the respective partner. It does not form part of business operations.
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