Assume that you recently accepted a position with Stockman National Bank as an assistant loan officer. As one of your first duties, you have the responsibility of evaluating a loan request for $90,000 from Goldworks.com, a small proprietorship. In support of the loan application, Yolanda Tovar, owner, submitted a trial balance for the first year of operations ended March 31, 2010. GOLDWORKS.COM Trial Balance March 31, 2010 4.100 30,140 14,940 52.740 16. 180 Cash Billing Due from Others Supplies Trucks Equipment Amounts Owed to Others Investment in Business Service Revenue Wages Expense Utilities Expense Rent Expense Insurance Expense Other Expenses 5.700 47.000 147300 60, 100 14 650 4.800 1.400 940 200.000 200.000 1. Why do we need a set of financial statements to evaluate the loan request? (Hints: A. What's likely the very first thing that the bank will look at, often known as the bottom line? B. What's one category of items on the balance sheet that the bank will need to see to evaluate whether the business is likely to be able to handle the loan?) 2. What adjusting journal entries might we need to do to make her financial statements accurate? (Hint: What's one adjusting journal entry that they need to do that might make the financial statements look worse to us? Make sure you show the journal entry itself rather than listing accounts.) 3. What other considerations or information might we require before making a decision on whether to make the loan? (Hint: What else might we check besides the company's financial statements?) 4. Why might a business run its fiscal year from April 1 through March 312 Assume that you recently accepted a position with Stockman National Bank as an assistant loan officer. As one of your first duties, you have the responsibility of evaluating a loan request for $90,000 from Goldworks.com, a small proprietorship. In support of the loan application, Yolanda Tovar, owner, submitted a trial balance for the first year of operations ended March 31, 2010. GOLDWORKS.COM Trial Balance March 31, 2010 4.100 30,140 14,940 52.740 16. 180 Cash Billing Due from Others Supplies Trucks Equipment Amounts Owed to Others Investment in Business Service Revenue Wages Expense Utilities Expense Rent Expense Insurance Expense Other Expenses 5.700 47.000 147300 60, 100 14 650 4.800 1.400 940 200.000 200.000 1. Why do we need a set of financial statements to evaluate the loan request? (Hints: A. What's likely the very first thing that the bank will look at, often known as the bottom line? B. What's one category of items on the balance sheet that the bank will need to see to evaluate whether the business is likely to be able to handle the loan?) 2. What adjusting journal entries might we need to do to make her financial statements accurate? (Hint: What's one adjusting journal entry that they need to do that might make the financial statements look worse to us? Make sure you show the journal entry itself rather than listing accounts.) 3. What other considerations or information might we require before making a decision on whether to make the loan? (Hint: What else might we check besides the company's financial statements?) 4. Why might a business run its fiscal year from April 1 through March 312