As the end of Ray Companys fiscal year-end approached, it became clear that the company had considerable

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As the end of Ray Company’s fiscal year-end approached, it became clear that the company had considerable excess inventory. Jefferson Bunker, the head of marketing and sales, ordered salespeople to “add 20% more units to each order that you ship. The customers can always ship the extra back next period if they decide they don’t want it. We’ve got to do it to meet this year’s sales goal.” Discuss the accounting implications of Jefferson’s action.

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Financial Accounting Tools for Business Decision Making

ISBN: 978-0470239803

5th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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