1. Loretta Smith, president and owner of Custom Enterprises, applied for a $250,000 loan from City National Bank. The bank requested financial statements from Custom Enterprises as a basis for getting a loan. Loretta has told her accountant to provide the bank with a balance sheet. Loretta has decided to omit the other financial statements because there was a net loss during the past year. You are the accounting person Loretta instructed to provide only the balance sheet.
   1. Is Loretta behaving in a professional manner by omitting some of the financial statements? Is there any reason for you to discuss this request with her?
   2. Give a justification to support your answer.
   3. What type of information about their businesses would owners be willing to provide bankers? What type of information would owners not be willing to provide? Give at least one statement to support your answer.
   4. What types of information about a business would bankers want to before extending a load?