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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 $ 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
Data Table columns
st column is item description
nd column is an amount
rd column is an amount
Header
GoldWorks.com
Trail Balance
Friday, March
Data Table items
Cash Left Column
Accounts Receivable Left Column
Supplies Left Column
Trucks Left Column
Equipment Left Column
Accounts Payable Right Column
Investment in Business Right Column
Service Revenue Right Column
Wages Expense Left Column
Utilities Expense Left Column
Rent Expense Left Column
Insurance Expense Left Column
Other Expenses Left Column
Last Row Left ColumnRight 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 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 Why would the business close out its year on this date? What factors could influence this selection?
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