Rustic Furniture Co. is owned and operated by Cam Pfeifer. The following is an excerpt from a conversation between Cam Pfeifer and Mitzi Wheeler, the chief accountant for Rustic Furniture Co.: Cam: Mitzi, I've got a question about this recent balance sheet. Mitzi: Sure, what's your question? Cam: Well, as you know, I'm applying for a bank loan to finance our new store in Garden Grove, and I noticed that the accounts payable are listed as $320,000. Mitzi: That's right. Approximately $275,000 of that represents amounts due our suppliers, and the remainder is miscellaneous payables to creditors for utilities, office equipment, supplies, etc. Cam: That's what I thought. But as you know, we normally receive a 2% discount from our suppliers for earlier payment, and we always try to take the discount. Mitzi: That's right. I can't remember the last time we missed a discount. Cam: Well, in that case, it seems to me the accounts payable should be listed minus the 2% discount. Let's list the accounts payable due suppliers as $314,500 rather than $320,000. Every little bit helps. You never know. It might make the difference between getting and not getting the loan. How would you respond to Cam Pfeifer's request?

Assume you serve on the board of a local golf and country club. In preparation for renegotiating the club’s bank loans, the president indicates that the club needs to increase its operating cash flows before the end of the current year. The club’s treasurer reassures the president and other board members that he knows a couple of ways to boost the club’s operating cash flows. First, he says, the club can sell some of its accounts receivable to a collections company that is willing to pay the club $97,000 up front for the right to collect $1 00,000 of the overdue accounts. That will immediately boost operating cash flows. Second, he indicates that the club paid about $200,000 last month to relocate the 18th fairway and green closer to the clubhouse. The treasurer indicates that although these costs have been reported as expenses in the club’s own monthly financial statements, he feels an argument can be made for reporting them as part of land and land improvements (a long-lived asset)…

You are a Corporate Credit Analyst for your bank. A new corporate customer in the manufacturing sector approached your bank for a large credit facility in the sum of $20 million for production equipment and warehousing. The customer submitted the following financials to you.    The cash position increased from $6.7 million in 2019 to $16 million in 2021. Does this signal a strengthening of the liquidity position of the firm? Explain.

Clara North is really confused. "I've got three different numbers here and I don't know what is right. My records show that I have $35,463 in the bank, but the bank statement says $37,428. When I called the bank to see about making a transfer payment, they said I had only $34,299 to spend. What the heck is going on?" Can you explain what there three balances are likely to be and why they are different?