Unit 8 Discussion Part 1 Discussion Board Topic: GAAP requires the statement of cash flows be presented when financial statements are prepared. Instructions : Explain the purposes of the statement of cash flows. List and describe the three categories of activities that must be reported in the statement of cash flows. Identify and describe the two methods that are allowed for reporting cash flows from operations. Describe the financial statement presentation of noncash investing and financing transactions. Include in your description an example of a noncash investing and financing transaction Unit 8 Discussion part 2 Nancy Tercek, the financial vice president, and Margaret Lilly, the controller, of Romine Manufacturing Company are reviewing the financial ratios of the company for the years 2012 and 2013. The financial vice president notes that the profit margin on sales ratio has increased from 6% to 12%, a hefty gain for the two- year period. Tercek is in the process of issuing a media release that emphasizes the efficiency of Romine Manufacturing in controlling cost. Margaret Lilly knows that the difference in ratios is due primarily to an earlier company decision to reduce the estimates of warranty and bad debt expense for 2013. The controller, not sure of her supervisor’s motives, hesitates to suggest to Tercek that the company’s improvement is unrelated to efficiency in controlling cost. To complicate matters, the media release is scheduled in a few days. Instructions : What, if any, is the ethical dilemma in this situation? Should Lilly, the controller, remain silent? Give reasons. What stakeholders might be affected by Tercek’s media release? Give your opinion on the following statement and cite reasons: “ Because Tercek, the vice president, is most directly responsible for the media release, Lilly has no real responsibility in this matter.” .

1. Unit 8 Discussion Part 1
Discussion Board Topic: GAAP requires the statement of cash
flows be presented when financial statements are prepared.
Instructions
:
Explain the purposes of the statement of cash flows.
List and describe the three categories of activities that must be
reported in the statement of cash flows.
Identify and describe the two methods that are allowed for
reporting cash flows from operations.
Describe the financial statement presentation of noncash
investing and financing transactions. Include in your description
an example of a noncash investing and financing transaction
Unit 8 Discussion part 2
Nancy Tercek, the financial vice president, and Margaret Lilly,
the controller, of Romine Manufacturing Company are
reviewing the financial ratios of the company for the years 2012
and 2013. The financial vice president notes that the profit
margin on sales ratio has increased from 6% to 12%, a hefty
gain for the two- year period. Tercek is in the process of issuing
a media release that emphasizes the efficiency of Romine
Manufacturing in controlling cost. Margaret Lilly knows that
the difference in ratios is due primarily to an earlier company
decision to reduce the estimates of warranty and bad debt
expense for 2013. The controller, not sure of her supervisor’s
motives, hesitates to suggest to Tercek that the company’s
improvement is unrelated to efficiency in controlling cost. To
complicate matters, the media release is scheduled in a few
days.
Instructions
:
What, if any, is the ethical dilemma in this situation?
Should Lilly, the controller, remain silent? Give reasons.
What stakeholders might be affected by Tercek’s media release?
Give your opinion on the following statement and cite reasons:

2. “ Because Tercek, the vice president, is most directly
responsible for the media release, Lilly has no real
responsibility in this matter.”