Briefly discuss the following for your Chapter One Discussion:Colleen Fernandez President of Rhino Enterprises applied for a $175 000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterprises as a basis for granting the loan. Colleen has told her accountant to provide the bank with a balance sheet. Colleen has decided to omit the other financial statements because there was a net loss during the past year.1. Is Colleen behaving in a professional manner by omitting some of the financial statements?2. Discuss the implications of this behavior.Ethics & Professional ConductAt the end of the current month Gil Frank prepared a trial balance for CollegeAppServices. The credit side of the trial balance exceeds the debit side by a significant amount. Gil has decided to add the difference to the balance of the miscellaneous expense account in order to complete the preparation of the current month’s financial statements by the 5 o’clock deadline. Gil will look for the difference next week when he has more time.1. Discuss whether Gil is behaving in a professional manner.Ethics and professional conduct in businessDaryl Kirby opened Squid Realty Co. on January 1 2013. At the end of the first year the business needed additional capital. On behalf of Squid Realty Co. Daryl applied to Ocean National Bank for a loan of $375 000. Based on Squid Realty Co.’s financial statements which had been prepared on a cash basis the Ocean National Bank loan officer rejected the loan as too risky.After receiving the rejection notice Daryl instructed his accountant to prepare the financial statements on an accrual basis. These statements included $65 000 in accounts receivable and $25 000 in accounts payable. Daryl then instructed his accountant to record an additional $30 000 of accounts receivable for commissions on property for which a contract had been signed on December 28 2013. The title to the property is to transfer on January 5 2014 when an attorney formally records the transfer of the property to the buyer.Daryl then applied for a $375 000 loan from Free Spirit Bank using the revised financial statements. On the application Daryl indicated that he had not previously been rejected for credit.Discuss the ethical and professional conduct of Daryl Kirby in applying for the loan from Free Spirit Bank.Ethics and professional conduct in businessPicasso Graphics is a graphics arts design consulting firm. Pablo Taylor its treasurer and VP of Finance has prepared a classified balance sheet as of July 31 2014 the end of its fiscal year. This balance sheet will be submitted with Picasso Graphics’ loan application to Paris Trust & Savings Bank.In the Current Assets section of the balance sheet Pablo reported a $56 000 receivable from Becky Holt the President of Picasso Graphics as a trade accounts receivable. Becky borrowed the money from Picasso Graphics in January 2012 for a down payment on a new home. She has orally assured Pablothat she will pay off the account receivable within the next year. Pablo reported the $56 000 in the same manner on the preceding year’s balance sheet.Evaluate whether it is acceptable for Pablo to prepare the July 31 2014 balance sheet in the manner indicated above.Accounting Scandals.pdfAttached is a summary of some notoriouslyfraudulent accounting scandals retrieved from:www.accounting-degree.org/scandals that occurred in the past. Choose the one that interests you the most and answer the following:1. Briefly summarize what occurred.2. What are your thoughts regarding this activity and how do you think these issues could have been prevented?If inventory is being valued at cost and the price level is steadily rising which of the three methods of costingFIFO LIFO or weighted average costwill yield the lowest annual income tax expense? Explain.Select a business in your community and observe its internal controls over cash receipts and cash payments. The business could be a bank or a bookstore restaurant department store or other retailer. Briefly iidentify and discuss the similarities and differences in each businesss cash internal controls.After the accounts are adjusted and closed at the end of the fiscal year Accounts Receivable has a balance of $673 400and Allowance for Doubtful Accounts has a balance of $11 900. Describe how the accounts receivable and the allowance for doubtful accounts are reported on the balance sheet.Dave Elliott CPA is an assistant to the controller of Lyric Consulting Co. In his spare time Dave also prepares tax returns and performs general accounting services for clients. Frequently Dave performs these services after his normal working hours using Lyric Consulting Co.s computers and laser printers. Occasionally Daves clients will call him at the office during regular working hours.Brieflydiscuss whether Dave is performing in a professional manner.Payroll accounting involves the use of government-supplied forms to account for payroll taxes. Three common forms are the W-2 Form 940and Form 941. They may be downloaded from the Internet athttp://www.irs.gov(go to forms and publications).Briefly describe the purpose of each of the three forms.BernieEbbers the CEO ofWorldCom a major telecommunications company was having personal financial troubles.Ebberspledged a large stake of hisWorldComstock as security for some personal loans. As the price ofWorldComstock sank Ebbersbankers threatened to sell his stock in order to protect their loans. To avoid having his stock sold Ebbersasked the board of directors ofWorldComto loan him nearly $400 Millionof corporate assets at 2.5%interest to pay off his bankers. The board agreed to lend him the money.Briefly comment on the decision of the board of directors in this situation.Describe the two distinct obligations incurred by a corporation when issuing bonds.What are the major advantages of the indirect method of reporting cash flows from operating activities?What is the difference between horizontal and vertical analysis of financial statements?