For each case below, answer the following three questions:

What is the accounting issue in this case? What ethical decision needs to be made?

Who are the stakeholders?

Analyze the potential impact on the stakeholders from the following standpoints: $($a$)$ economic, $($b$)$ legal, and $($c$)$ ethical.

Case $4$

Greensboro Golf Corporation$$s long$-$term debt agreements make certain demands on the business. For example, Greensboro may not purchase treasury stock in excess of the balance of retained earnings. Also, long$-$term debt may not exceed stockholders$$ equity, and the current ratio may not fall below $1\mathrm{.}50.$ If Greensboro fails to meet any of these requirements, the company$$s lenders have the authority to take over management of the company.

Changes in consumer demand have made it hard for Greensboro to attract customers. The company$$s current liabilities have grown faster than its current assets, causing the current ratio to fall to $1\mathrm{.}47.$ Before releasing financial statements, managers are scrambling to improve the current ratio. The controller points out that the company owns an investment that is currently classified as long$-$term. The investment can be classified as either long$-$term or short$-$term, depending on management$$s intention. By deciding to convert an investment to cash within one year, Greensboro can classify the investment as short$-$term$$a current asset. On the controller$$s recommendation, Greensboro$$s board of directors votes to reclassify long$-$term investments as short$-$term.