Assume that you recently accepted a position with Canadian Imperial Bank of Commerce as an assistant loan officer. As one of your first duties, you have been assigned the responsibility of evaluating a loan request for $90,000 from, a small proprietorship. In support of the loan application, Yolanda Tovar, owner, submitted a "Statement of Accounts" (trial balance) for the first year of operations ended December 31, 2015.
1. Explain to Yolanda Tovar why a set of financial statements (income statement, statement of owner's equity, and balance sheet) would be useful to you in evaluating the loan request.
2. In discussing the "Statement of Accounts" with Yolanda Tovar, you discovered that the accounts had not been adjusted at December 31. Analyze the "Statement of Accounts" and indicate possible adjusting entries that might be necessary before an accurate set of financial statements can be prepared.
3. Assuming that an accurate set of financial statements will be submitted by Yolanda Tovar in a few days, what other considerations or information do you require before making a decision on the loan request?

  • CreatedSeptember 15, 2015
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