quatrec: Goced the coetrany would huve difficulty brirrowing the money it would need to boost poduction Sou Valearine s Day The purpose of the Qetobec managemed merting was to explore ways in which A fifections mighi improsc ifs Dexiember \$1 balance shect, \$ome of the ideas discassed are as follows. 1. Onter cusainen parchasing Cluismas candy a 10 percent disenint if they make paymed wiethin 30 daye: 2. Allow a 30-day gimece period on at accounts receivable onerilue at the end of the year. As theie accoants will no longer be overdoe, the campany will not need un allowance for overtoe accuumts. 3. For parnoser of halance shect presentation, comtine all forms of cmat, including casb equivaleats, cormpensating balancos, and unused lines of credit. 4. Require offieers who have borrowed money from the company to repay the amvouts oweis at Decenber 31. This would convert into eash she "notes receivable from officens, " which now appear in the halance sheet as noncurrent asyets. The tions could be reneved immediately ufter yearead. 5. Present invesumenss in marketable securities at their market value, rather than at cost. 6. Treat inventory as a financial asset and show it ut current sales value. 7. On December 31, draw a lurge check against one of the company's bank accoums and deposit it in another of the compony's accoums in a different bank. The check won't clear the first bank until after year-end. This will substantially increase the armount of cash in bank accounts at year-end. Instructions a. Separately evaluate each of these proposals. Consider ethical issues as well as accounting issuek? b. Do you consider it ethical for management to hold this meeting in the first place? That is, should management plan in advance how to improve financial statements that will be distrib- quatrec: Goced the coetrany would huve difficulty brirrowing the money it would need to boost poduction Sou Valearine s Day The purpose of the Qetobec managemed merting was to explore ways in which A fifections mighi improsc ifs Dexiember \$1 balance shect, \$ome of the ideas discassed are as follows. 1. Onter cusainen parchasing Cluismas candy a 10 percent disenint if they make paymed wiethin 30 daye: 2. Allow a 30-day gimece period on at accounts receivable onerilue at the end of the year. As theie accoants will no longer be overdoe, the campany will not need un allowance for overtoe accuumts. 3. For parnoser of halance shect presentation, comtine all forms of cmat, including casb equivaleats, cormpensating balancos, and unused lines of credit. 4. Require offieers who have borrowed money from the company to repay the amvouts oweis at Decenber 31. This would convert into eash she "notes receivable from officens, " which now appear in the halance sheet as noncurrent asyets. The tions could be reneved immediately ufter yearead. 5. Present invesumenss in marketable securities at their market value, rather than at cost. 6. Treat inventory as a financial asset and show it ut current sales value. 7. On December 31, draw a lurge check against one of the company's bank accoums and deposit it in another of the compony's accoums in a different bank. The check won't clear the first bank until after year-end. This will substantially increase the armount of cash in bank accounts at year-end. Instructions a. Separately evaluate each of these proposals. Consider ethical issues as well as accounting issuek? b. Do you consider it ethical for management to hold this meeting in the first place? That is, should management plan in advance how to improve financial statements that will be distrib
