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Your response should be 2-3 paragraphs and incorporate at least one outside reference. You will NOT be able to see others responses until you make the initial posting. You are then encouraged to engage in the discussion as frequently as possible. Use Citation!!!! Book title: Accounting Tools for Business Decisions with WileyPlus Edition: 7th Author(s): Kimmel ISBN: 9781119598381Your response should be 2-3 paragraphs and incorporate at least one outside reference. You will NOT be able to see others responses until you make the initial posting. You are then encouraged to engage in the discussion as frequently as possible.Nixon Wholesale Corp. uses the LIFO cost flow method. In the current year, profit at Nixon is running unusually high. The corporate tax rate is also high this year, but it is scheduled to decline significantly next year. In an effort to lower the current year’s net income and to take advantage of the changing income tax rate, the president of Nixon Wholesale instructs the plant accountant to recommend to the purchasing department a large purchase of inventory for delivery 3 days before the end of the year. The price of the inventory to be purchased has doubled during the year, and the purchase will represent a major portion of the ending inventory value.What is the effect of this transaction on this year’s and next year’s income statement and income tax expense? Should the plant accountant order the inventory purchase to lower income? What are the ethical implications of this order?THIS IS MY REPONSEEffects of the TransactionPurchasing a large inventory will lower the net income of the company and also the tax burden in the current year because, with the use of the LIFO method, the purchases made with doubled prices will be sold at higher prices leading to an increase in the cost of goods sold. However, in the following year, the net income will be high and since there will be a decline in the tax rate, the tax expenses will be lower than those of the previous year. Therefore the company will realize a double windfall.In my view, the accountant should not order the purchase and first, do his due diligence (Kimmel, 2018). From an ethical perspective, ordering huge purchases to hide profits and avoid tax is unethical. This amount to tax avoidance and it can be perceived by other stakeholders as tax noncompliance. The company should provide the correct financial statements to the stakeholders for them to know the exact financial position of the company and protect the company from receiving a negative reputation from customers and investors (Kimmel, 2018). The plan accountant should therefore take responsibility and conduct an act of due diligence even if the management will decide otherwise.RESPOND TO LUCASLower my taxes tooCOLLAPSE The implication of this purchase decreases this year’s income, which means, that the company will pay significantly less taxes. Is this an ethical move? I say that it most certainly is. This company is uses laws in its favor, to lower its cost (the imposed taxes). This is no different than donating to Goodwill and submitting it on your own taxes. This in no way gives this company an advantage over any other company, because every company can and should be doing the same thing. Once the rules are set by the authorities, companies must follow these rules, no matter what it costs the company. On the flip side of this, if the authorities that set these rules do not want these types of activities going on, then they need to amend these laws. To lower your taxes through legal purchases is smart business. To do so by falsely reporting numbers is against the law.Just my thoughts,Lucas

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