Horizon Corporation manufactures personal computers. The company beganoperations in 2006 and reported profits for the years 2006 through 2013. Due primarilyto increased competition and price slashing in the industry, 2014's income statementreported a loss of $20 million. Just before the end of the 2015 fiscal year, a memo fromthe company's chief financial officer to Jim Fielding, the company controller, includedthe following comments:

If we don't do something about the large amount of unsold computers already manufactured,our auditors will require us to record a write down. The resulting loss for 2015 will cause aviolation of our debt covenants and force the company into bankruptcy. I suggest that youship half of our inventory to J.B. Sales, Inc., in Oklahoma City: I know the company's president, and he will accept the inventory and acknowledge the shipment as a purchase. We canrecord the sale in 2015 which will boost our loss to a profit. Then J.B. Sales will simply returnthe inventory in 2016 after the financial statements have been issued.

Required:
Discuss the ethical dilemma faced by Jim Fielding. What is the issue? Who are theparties involved? What factors should Jim consider in making his decision?