Iscuss the ethical implications of your boss’ suggestion: be specific in this part. As an example, you may discuss what provisions of the Framework will be violated and why, or you can touch on any other aspects of the investors’ decision-making process.

1. Obtain the relevant authoritative literature on product financing arrangements using the FASB’s Codification Research System. What is the specific citation that you found in the system that provides guidance for determining whether an arrangement involving the sale of inventory in the above case is “in substance” a financing arrangement? In one paragraph, briefly summarize the guidance under the citation (3 points)
2. What is the specific citation that addresses the recognition of a product financing arrangement? In one paragraph, briefly summarize the guidance under the citation (3 points)
3. Discuss the ethical implications of your boss’ suggestion: be specific in this part. As an example, you may discuss what provisions of the Framework will be violated and why, or you can touch on any other aspects of the investors’ decision-making process. (5 points)
4. Determine and describe, based on the guidance you found in the FASB research system, the appropriate accounting treatment of product financing arrangements like the one proposed by Mr. Eagleton. Prepare the journal entry for Balboa Lumber to record the “sale” of the inventory and subsequent repurchase, based on the guidance provided in the FASB research system. (4 points)
5. What are other options available to a company to raise needed cash? What are the main advantages/disadvantages of those options, compared to the product financing arrangement? (5 points)