Assignment 1 Ken Franklin is the sales manager of Davidson Enterprises, a very protable distributor of ofce furniture to local businesses. A recent economic downturn has created an extremely tight cash position, and the company has been hurt by the bankruptcy of two key customers. In late October. anticipating an economic recovery, Franklin began an extensive remodeling of the company's sales oor. Construction costs, decorating, and equipment purchases are projected to cost $250,000. Davidson has a policy that individual expenditures in excess of $200,000 must be approved by the rm's board of directors. Franklin, unfortunately, missed the deadline to have the board consider this project at its regular September meeting. Not wanting to wait until the next meeting in December, he subdivided the project in two partsconstruction and decorating ($190,000) and equipment purchases ($60,000)neither of which needed board approval because ofthe dollar amounts involved. The project was recently completed and sales have begun to recover. Customers have raved about the new sales area, noting that it is far superior to those of Davidson's competitors. Required: 1. Would Franklin's approach of subdividing the project in two parts have any effect on the company's nancial statements? Briey explain. 2. Briey discuss whether Franklin behaved in an ethical manner. 3. Which, if any, ofthe following standards of conduct would have applicability to Franklin's conduct: competence, condentiality, integrity, or credibility? Briey explain