Technology \(\mathrm{N}\) Motion is a publicly traded company that is facing financial difficulties. To survive, the company needs large new bank loans. As the chief financial officer of the company, you approached several banks, but each has asked for your audited financial statements for 2011, the most recent fiscal year. You called for a meeting with other corporate officers to discuss how the financial statements could be improved. The suggestions made by your colleagues include the following:

1. We owe \(\$ 20\) million to our suppliers. We could show half this amount as a liability on our statement of financial position and report the other half as share capital. This will improve our financial position.

2. We own land that is worth at least \(\$ 8\) million in today's market, but it cost us only \(\$ 3\) million when we bought it. Why not show the land at \(\$ 8\) million on the company's statement of financial position, which increases both the total assets and shareholders' equity by \(\$ 5\) million?

3. We owe FirstRate Software \(\$ 2\) million, due in 30 days. I can ask their chief financial officer to let us delay the payment of this debt for a year, and our company could sign him a note that pays 8 percent interest.

Required:

Evaluate each of these three proposals to improve Technology \(\mathrm{N}\) Motion's financial statements by considering both accounting and ethical issues.