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Business versus personal expenses Marco Brolo is one of three partners who own and operate Silkroad Partners, a global import–export business. Marco is the partner in charge of recording partnership transactions in the accounts. On his way to work one day, Marco’s car broke down. At the repair shop, Marco learned that his car’s engine had significant damage, and it will cost over $2,000 to repair the damage. He does not have enough money in his bank account to cover the cost of the repair, and his credit cards are at their limit. This car is the only form of transportation that Marco has to get to and from work every day. He does not use his car for any business travel. After considering his options, Marco decides to take $2,000 from the partnership for the repair, and record it as an expense of the partnership. He believes that this is appropriate since he needs his car to get to work every day. 1. Is Marco behaving ethically? Why? 2. Who is affected by Marco’s decision? 3. What other alternatives might Marco consider?

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Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

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Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 1, Problem 1TIF
Textbook Problem
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Business versus personal expenses

Marco Brolo is one of three partners who own and operate Silkroad Partners, a global import–export business. Marco is the partner in charge of recording partnership transactions in the accounts. On his way to work one day, Marco’s car broke down. At the repair shop, Marco learned that his car’s engine had significant damage, and it will cost over $2,000 to repair the damage. He does not have enough money in his bank account to cover the cost of the repair, and his credit cards are at their limit. This car is the only form of transportation that Marco has to get to and from work every day. He does not use his car for any business travel.

After considering his options, Marco decides to take $2,000 from the partnership for the repair, and record it as an expense of the partnership. He believes that this is appropriate since he needs his car to get to work every day.

  1. 1. Is Marco behaving ethically? Why?
  2. 2. Who is affected by Marco’s decision?
  3. 3. What other alternatives might Marco consider?

1)

To determine

Explain whether the action of MB as ethical or not.

Explanation of Solution

Ethical Case Study:

Case Summary:

MB and 2 other partners operate S Partners, a global import-export business, where MB records the partnership transactions. MB travels to the firm in the car as it is the only means of transport and one day the car breaks down on the way to firm. The engine is damaged and the cost to repair comes around $2,000...

2)

To determine

Identify the People who are affected by the decision of MB.

3)

To determine

Identify the other alternatives available with MB.

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Chapter 1 Solutions

Financial And Managerial Accounting
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