Asked by:

talleman9
Rating (17): B-
Questions Asked: 46
Tutorials Posted: 75, earned $159.76

 

$2.00 ACC 280

• From Business: Accounting
• Closed, but you can still post tutorials
• Due on Jul. 07, 2009
• Asked on Jul. 04, 2009 at 05:52:54AM

Q:

Ethics Case
BYP8-6 You are the assistant controller in charge of general ledger accounting at Riverside
Bottling Company.Your company has a large loan from an insurance company.The loan agreement
requires that the company’s cash account balance be maintained at $200,000 or more, as
reported monthly.
At June 30 the cash balance is $80,000, which you report to Gena Schmitt, the financial vice
president. Gena excitedly instructs you to keep the cash receipts book open for one additional day
for purposes of the June 30 report to the insurance company. Gena says, “If we don’t get that cash
balance over $200,000, we’ll default on our loan agreement.They could close us down, put us all out
of our jobs!” Gena continues, “I talked to Oconto Distributors (one of Riverside’s largest customers)
this morning.They said they sent us a check for $150,000 yesterday.We should receive it tomorrow.
If we include just that one check in our cash balance, we’ll be in the clear. It’s in the mail!”
Instructions
(a) Who will suffer negative effects if you do not comply with Gena Schmitt’s instructions? Who
will suffer if you do comply?
(b) What are the ethical considerations in this case?
(c) What alternatives do you have?

 

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