{"id":10634,"date":"2022-05-24T17:51:38","date_gmt":"2022-05-24T17:51:38","guid":{"rendered":"https:\/\/highclasswriters.com\/blog\/?p=10634"},"modified":"2022-05-24T17:51:39","modified_gmt":"2022-05-24T17:51:39","slug":"accounting-course","status":"publish","type":"post","link":"https:\/\/highclasswriters.com\/blog\/accounting-course\/","title":{"rendered":"Accounting Course"},"content":{"rendered":"\n

The discussion Prompt<\/strong><\/p>\n\n\n\n

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 board’s 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. President and CEO Samuel Gunkle’s job is secure so long as he produces annual operating cash flows to support the usual dividend.<\/p>\n\n\n\n

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 $970,000. The president says to Gerald, \u201cWe must get that amount above $1 million. Isn’t there some way to increase operating cash flow by another $30,000?\u201d Gerald answers, \u201cThese figures were prepared by my assistant. I’ll go back to my office and see what I can do.\u201d The president replies, \u201cI know you won’t let me down, Gerald.\u201d<\/p>\n\n\n\n

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 \u201cProceeds from bank loan\u2014$60,000.\u201d He will report the note instead as \u201cIncrease in payables\u2014$60,000\u201d and treat it as an adjustment of net income in the operating activities section. He returns to the president, saying, \u201cYou can tell the board to declare their usual dividend. Our net cash flow provided by operating activities is $1,030,000.\u201d \u201cGood man, Gerald! I knew I could count on you,\u201d exults the president.<\/p>\n\n\n\n

Instructions<\/strong><\/p>\n\n\n\n

(a)  Who are the stakeholders in this situation?<\/p>\n\n\n\n

(b)  Was there anything unethical about the president’s actions? Was there anything unethical about the controller’s actions?<\/p>\n\n\n\n

(c)  Are the board members or anyone else likely to discover the misclassification?<\/p>\n","protected":false},"excerpt":{"rendered":"

The discussion Prompt Wesley Corp. is a medium-sized wholesaler of automotive parts. It has 10 stockholders who have been paid […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1],"tags":[],"class_list":["post-10634","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nAccounting Course - Highclasswriters<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/highclasswriters.com\/blog\/accounting-course\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Accounting Course - Highclasswriters\" \/>\n<meta property=\"og:description\" content=\"The discussion Prompt Wesley Corp. is a medium-sized wholesaler of automotive parts. 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