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Allowance for doubtful accounts and LIFO method of inventory
For this discussion, you must provide answers for the following scenarios.
Grace Gardner is the vice president of sales and marketing for Bermuda Pools and Spas, she wants the company’s credit department to be more liberal in granting credit to potential customers. She is frustrated credit departments stringent requirements. Please discuss the pros and cons of easy credit. What are the implications for the company’s financial statements?
Ted Taylor is a product manager for the Harper Shoe Company. Ted feels that his company should switch from LIFO to FIFO. Ted stated, “My bonus is based on net income and if we switch methods the company’s net income will increase and I will earn a higher bonus check and it would be great for me and the company”.  Is Ted correct in his assessment? Please explain and provide details.


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