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Usage of Financial Statements in Business Decisions Assume that you recently accepted a position with Stockman National Bank as an assistant loan officer. As one

Usage of Financial Statements in Business Decisions
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 31,2023.
Data Table (3 columns)
1st column is item description
2nd column is an amount
3rd column is an amount
Header
GoldWorks.com
Trail Balance
Friday, March 31,2023
Data Table items
Cash (Left Column)4,100
Accounts Receivable (Left Column)30,140
Supplies (Left Column)14,940
Trucks (Left Column)52,740
Equipment (Left Column)16,180
Accounts Payable (Right Column)5,700
Investment in Business (Right Column)47,000
Service Revenue (Right Column)147,300
Wages Expense (Left Column)60,100
Utilities Expense (Left Column)14,660
Rent Expense (Left Column)4,800
Insurance Expense (Left Column)1,400
Other Expenses (Left Column)940
Last Row 200,000(Left Column)200,000(Right Column)
Use the trial balance to answer the questions.
Explain to Yolanda Tovar how important the income statement, the statement of owner's equity, and the balance sheet are in evaluating the loan request.
In discussing the trial balance with Yolanda Tovar, you discovered that the accounts had not been adjusted on March 31. Analyze the trial balance and indicate possible adjusting entries that might be necessary before an accurate set of financial statements could be prepared.
Assuming that an accurate set of financial statements will be submitted by Yolanda Tovar in a few days, how do you think the assistant loan officer would evaluate accounts receivable and net income in deciding on the loan request?
You noted that Goldworks.com's trial balance is prepared through March 31,2023. Why would the business close out its year on this date? What factors could influence this selection?

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