You are the assistant controller in charge of general ledger accounting at Lemon Twist Bottling Company. Your company has a large loan from an insurance company. The loan agreement requires that the company's cash account balance be maintained at \(\$ 200,000\) or more as reported monthly. At June 30 the cash balance is \(\$ 80,000\), which you report to Sam Williams, the financial vice-president. Sam excitedly instructs you to keep the cash receipts book open for one additional day for purposes of the June 30 report to the insurance company. Sam says, "If we don't get that cash balance over \(\$ 200,000\), we'll default on our loan agreement. They could close us down and put us all out of our jobs!" Sam continues, "I talked to Grochum Distributors (one of Lemon Twist's largest customers) this morning and they said they sent us a check for \(\$ 150,000\) yesterday. We should receive it tomorrow. If we include just that one check in our cash balance, we'll be in the clear. It's in the mail!"

\section*{Instructions}

(a) Who will suffer negative effects if you do not comply with Sam Williams's instructions? Who will suffer if you do comply?

(b) What are the ethical considerations in this case?

(c) What alternatives do you have?