Assume that you recently accepted a position with five star national bank & trust as an assistant loan officer. As one of your first duties, you have assigned the responsibility of evaluating a loan request for $300000 from west gate auto co, a small corporation in support of the loan application, Joan Whalen, owner and sole stockholder, submitted a statement of account (trial balance) for the first year of operation ended October 31, 2016

West Gate Auto Co. Statement of Accounts October 31, 2014

Cash . ............................................................................ 5,000

Billings Due from Others. ............................................ 40,000

Supplies (chemicals, etc.) . ........................................... 7,500

Building . ...................................................................... 222,300

Equipment. ................................................................... 50,000

Amounts Owed to Others. ............................................ .31,000

Investment in Business . ............................................................................... 179,000

Service Revenue . .......................................................................................... 215,000

Wages Expense . ........................................................... 75,000

Utilities Expense . ........................................................ 10,000

Rent Expense . .............................................................. 8,000

Insurance Expense . ...................................................... 6,000

Other Expenses . ........................................................... 1,200

425,000 425,000

1. Explain to Joan Whalen why a set of financial statements (income statement, retained earnings statement, and balance sheet) would be useful to you in evaluating the loan request

2. In discussing the Statement of Accounts with Joan Whalen, you discovered that the accounts had not been adjusted at October 31. Analyze the Statement of Accounts and indicate possible adjusting entries that might be necessary before an accurate set of financial statements could be prepared.

3.Assuming that an accurate set of financial statements will be submitted by Joan Whalen in a few days, what other considerations or information would you require before making a decision on the loan request?