Case # 3 Cash Flow Statement [SCH \"Window Dress\" Cash Flows Brockman Guitar Company is in the business of manufacturing top-quality, steel-string folk guitars. In recent years, the company has experienced working capital problems resulting from the procurement of factory equipment, the unanticipated buildup of receivables and inventories, and the payoff of a balloon mortgage on a new manufacturing facility. The founder and president of the company, Barbara Brockman, has attempted to raise cash 'om various fmancial institutions, but to no avail because of the company's poor performance in recent years. In particular, the company's lead bank, First Financial, is especially concerned about Brockman's inability to maintain a positive cash position. The commercial loan officer from First Financial told Barbara, \"I can't even consider your request for capital nancing unless I see that your company is able to generate positive cash ows om operations.\" Thinking about the banker's comment, Barbara came up with what she believes is a good plan: with a more attractive statement of cash ows, the bank might be willing to provide long-term nancing. To \"window dress\" cash ows, the company can sell its accounts receivables to factors, and can also liquidate its raw materials inventories. These rather costly transactions would generate a lot of cash. As the Chief accountant for Brockman Guitar, it is your job to tell Barbara what you think of her plan. Required: (a) What are the ethical issues related to Barbara's idea? (b) Discuss the possible effect of this \"window dress\" strategy on rm's health? (c) What would you tell Barbara Broclcman