Posted by & filed under Accounting Principles, Advanced Accounting, Ethics.

Description: Documents requested by Target Canada’s suppliers indicate that the retailer began considering winding down in Canada early last fall. Target contacted its Canadian law firm in September to look at various “strategic options.” Target’s suppliers are upset as they believe that Target should have begun reducing orders of inventory – rather than increasing them –  given its knowledge that a pull-out from Canada could be coming. Target maintains it did not direct any employee to increase inventory in anticipation of bankruptcy proceedings.

Source: Globe and Mail.com

Date:  March 16, 2015; updated March 17, 2015

Link: http://www.theglobeandmail.com/report-on-business/target-canada-considered-winding-down-operations-as-early-as-october/article23485627/

Discussion Points:

1) What recourse do suppliers who have sold inventory to Target have?

2) If you were an accountant of a supplier of Target, what actions might you have to take in terms of presenting accounts receivable on the financial statements?

3) What are some of the relevant ethical issues that could be discussed in this situation?

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