Brockman Guitar Company is in the business of manufacturing top-quality, steelstring folk guitars. In recent years the company has experienced working capital problems resulting from the procurement of factory equipment, the unanticipated buildup of receivables and inventories, and the payoff of a balloon mortgage on a new manufacturing facility. The founder and president of the company, Barbara Brockman, has attempted to raise cash from various financial institutions, but to no avail because of the companys poor performance in recent years. In particular, the companys lead bank, First Financial, is especially concerned about Brockmans inability to maintain a positive cash position. The commercial loan officer from First Financial told Barbara, I cant even consider your request for capital financing unless I see that your company is able to generate positive cash flows from operations. Thinking about the bankers comment, Barbara came up with what she believes is a good plan: With a more attractive statement of cash flows, the bank might be willing to provide long-term financing. To window dress cash flows, the company can sell its accounts receivables to factors and liquidate its raw materials inventories. These rather costly transactions would generate lots of cash. As the chief accountant for Brockman Guitar, it is your job to tell Barbara what you think of her plan. Answer the following questions. (a) What are the ethical issues related to Barbara Brockmans idea? (b) What would you tell Barbara Brockman?