Which reporting makes Moss look better?

Respond to the following ethical issue concerning the reclassification of receivables in your initial post:

Moss Exports is having a bad year. Net income is only $60,000. Also, two important overseas customers are falling behind in their payments to Moss, and Moss’s accounts receivable are ballooning.

The company desperately needs a loan. The Moss Exports board of directors is considering ways to put the best face on the company’s financial statements. Moss’s bank closely examines cash flow from operations. Daniel Peavey, Moss’s controller, suggests reclassifying as long-term the receivables from the slow-paying clients. He explains to the board that removing the $80,000 rise in accounts receivable from current assets will increase net cash provided by operations. This approach may help Moss get the loan.

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

1. Using only the amounts given, compute net cash provided by operations, both without and with the reclassification of the receivables. Which reporting makes Moss look better? 2. Under what condition would the reclassification of the receivables be ethical? Unethical? Support your response.

"Get 15% discount on your first 3 orders with us"
Use the following coupon
"FIRST15"

Order Now