Question: 1. What effect will lowering the estimate for the allowance for doubtful accounts have on the company's net income and Blair' bonus ? 2. Does

1. What effect will lowering the estimate for the allowance for doubtful accounts have on the company's net income and Blair' bonus ?

2. Does Blair's recommendation to the company controller represent an ethics violation?

3. How should the controller respond to Blair's request ?

bers BTN 7-1 Anton Blair is the manager of a medium-size company. A few years ago, Blair persuaded the owner to base a part of his compensation on the net income the company earns each year. Each December he estimates year-end financial figures in anticipation of the bonus he will receive. If the bonus is not as high as he would like, he offers several recommendations to the accountant for year-end adjustments. One of his favorite recommendations is for the controller to reduce the estimate of doubtful accounts

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