+ Discussions 10 pts Alonso Duarte Mar 20 19 35 AM CT12.8 Wesley Corp. is a medium-sized wholesaler of automotive parts. It has 10 stockholders who have been paid a total of $1 million in cash dividends for 8 consecutive years. The boo policy requires that for this dividend to be declared, net cash provided by operating activities as reported in Wesley's current year's statement of cash flows must exceed $1 million Presid and CEO Samuel Gunkie's job is secure so long as he produces annual operating cash flows to support the usual dividend. At the end of the current year, controller Gerald Rondelli presents president Samuel Gunkle with some disappointing news. The net cash provided by operating activities is calculated by the indirect method to be only $9701000. The president says to Gerald We must get that amount above $1 million in there some way to increase operating cash flow by another $30.000 Gerald answers, "These figures were prepared by my assistant.nl go back to my office and see what I can do." The president replies, know you wont let me down, Gerald Upon close scrutiny of the statement of cash flows, Gerald concludes that he can get the operating cash flows above $1 million by reclassifying a $60.000. 2 year note payable listed in the financing activities section as "Proceeds from bank loan-$60,000." He will report the note instead as Increase in payables-$60,000 and treat it as an adjustment of net income in the operating activities section. He returns to the president, saying, "You can tell the board to declare their usual dividend. Our net cash flow provided by operating activities is $1,030,000. God man, Gerald! I knew I could count on you." exults the president. Instructions a. Who are the stakeholders in this situation? b. Was there anything unethical about the president's actions? Was there anything unethical about the controller's actions? c. Are the board members or anyone else likely to discover the misclassification? Reply Replies are only visible to those who have posted at least one reply Chapter 12 and 13 + Discussions 10 pts Alonso Duarte Mar 20 19 35 AM CT12.8 Wesley Corp. is a medium-sized wholesaler of automotive parts. It has 10 stockholders who have been paid a total of $1 million in cash dividends for 8 consecutive years. The boo policy requires that for this dividend to be declared, net cash provided by operating activities as reported in Wesley's current year's statement of cash flows must exceed $1 million Presid and CEO Samuel Gunkie's job is secure so long as he produces annual operating cash flows to support the usual dividend. At the end of the current year, controller Gerald Rondelli presents president Samuel Gunkle with some disappointing news. The net cash provided by operating activities is calculated by the indirect method to be only $9701000. The president says to Gerald We must get that amount above $1 million in there some way to increase operating cash flow by another $30.000 Gerald answers, "These figures were prepared by my assistant.nl go back to my office and see what I can do." The president replies, know you wont let me down, Gerald Upon close scrutiny of the statement of cash flows, Gerald concludes that he can get the operating cash flows above $1 million by reclassifying a $60.000. 2 year note payable listed in the financing activities section as "Proceeds from bank loan-$60,000." He will report the note instead as Increase in payables-$60,000 and treat it as an adjustment of net income in the operating activities section. He returns to the president, saying, "You can tell the board to declare their usual dividend. Our net cash flow provided by operating activities is $1,030,000. God man, Gerald! I knew I could count on you." exults the president. Instructions a. Who are the stakeholders in this situation? b. Was there anything unethical about the president's actions? Was there anything unethical about the controller's actions? c. Are the board members or anyone else likely to discover the misclassification? Reply Replies are only visible to those who have posted at least one reply Chapter 12 and 13