Gerry, Harry and Winston are in the business of selling flowers under the name Fresh Flowers. They started

the business in 2019 by each of them investing $100,000. A shop in a shopping mall was rented to carry out

the business. Gerry, a professional accountant is responsible for the financial aspects of the business. Harry is

in charge of the flower shop and deliveries, while Winston deals with the suppliers. Gerry, Harry and Winston

are permitted to make purchases up to $5000 individually and anything above that amount is required to be

approved by all of them. The flower shop displays different types of flower arrangements and Harry makes all

floral arrangements to be displayed at the shop.

The following incidents/transactions occurred during last few months:

Leena, a regular customer, was stung by a bee while inspecting a flower bouquet displayed at the

flower shop. Leena had a severe allergic reaction and was admitted to the hospital. Her one-week

treatment in hospital cost $5000.

Harry has allowed his nephew, Karl, to use the flower shop during the weekend to sell souvenirs in

exchange for $200 per week. Gerry and Winston are not aware about this transaction and Harry

advised Karl to keep it between themselves.

Winston entered into a contract with Sam in January 2020 for the supply of Red Poppies for the next

three months. His usual order was for $3000 per month. In view of the increased demand for Red

Poppies during April due to Anzac Day, Winston increased the order for month of April to $7000. Sam

noticed that the amount was larger than usual and checked with Winston about this. Winston

forwarded Sam his business card which stated, 'Supply Manager' and Sam agreed to supply the

flowers. Unfortunately, due to COVID-19, the Anzac Day celebrations were largely cancelled, and this

resulted in way less than expected sales.

Harry hired Katie to home deliver flower arrangements to customers. Katie met with an accident on

her way to deliver a flower arrangement. The accident was due to Katie's fault and the other party

has been injured and was hospitalised for three weeks costing $8000 as hospital bills.

Gerry was approached by a competitor of Fresh Flowers to get monthly sales information of Fresh

Flowers. Gerry was in financial difficulties due to a loan he has obtained from a bank and he promised

to pass on the financial information if he was to be given shares (valued at $25,000) of the competitor's

business.

Gerry saw an advertisement for professional flower cutters and placed an order to buy three of those

for $2000.