Discussions Ethics Case Ch 12 10 pts Alonso Duarte Mar 20 19:35 AM CT 12.8 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 consecutive years. The boards 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 flow must exceed $1 milion President and CEO Samuel Gunkie's job is secure so long as he produces annual operating cash flows to Suport the usual dividend At the end of the current year controller Gerald Ronde presents president Samuel Guide with some disappointing news The net cash provided by operating cos is caiced by indirect method to be only 59701000. The president says to Gerald We must get that amount above $1 min t there some way to increase operangan low by another Gerald answers. These figures were prepared by my assistant go back to my office and see what I can do. The president replies, how you womit 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, 2year note payable listed in the financing activities section Proceeds from bank loan-$60,000. He will report the note instead as Increase in payables-$60.000' and treat 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. Good 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 controles actions? c. Are the board members or anyone elsekely to discover the miscascation? Reply YouTube