6) Ima Broke is the sole owner of Miracles, Inc. Ima needs another loan from a bank to expand her business. In order to improve the chances of receiving a loan, she decides to report the principal of one of Miracles, Inc.'s loans as contributed capital instead of a liability on the balance sheet. Discuss the ethical issue with Ima's treatment of the loan.
7) Team Instructions; Divide the class into teams of three or four people. Each team member should work the following problem separately outside of class. Then give the students time in class to compare answers with their teammates and put together a final correct copy of the problem. Each team should turn in only one copy of the problem for grading. All team members will receive the same grade.
Doug Depp is your manager at Chutes, Inc. which sells parachutes. Management's next year's bonus is based on the current year's net income. In an effort to increase his bonus, Doug decides to buy the pull-cord used in making the company's parachutes from a less reputable supplier. The supplier's prices are lower, but the pull-cords are less reliable in successfully opening the parachute. Discuss with your team members the pros and cons of buying the cheaper pull-cord. As a team, decide what the president of the company could do in the future to avoid having the company face this type of scenario.
8) Team Instructions; Divide the class into teams of three or four people. Each team member should work the following problem separately outside of class. Then give the students time in class to compare answers with their teammates and put together a final correct copy of the problem. Each team should turn in only one copy of the problem for grading. All team members will receive the same grade.
Search the internet for information about the WorldCom Inc. fraud in 2002. With your group, write a brief description of the fraud and discuss the ethical issue.