Question: Question 3 10 marks Barton Company requested a large loan from First National Bank (FNB) to acquire a large piece of land for future expansion.

Question 3 10 marks

Barton Company requested a large loan from First National Bank (FNB) to acquire a large piece of land for future expansion. Bart reported current assets of R1,900 ,000 (R430 000 in cash) and current liabilities of R1,075,000. FNB denied the request for a number of reasons. When the Company received the news, the financial controller immediately paid R420 000 that was owed to several trade creditors. He then asked the bank to reconsider the loan application. Based on the abbreviated facts would you advise FNB to advance the loan? Why? Are the actions of the financial controller ethical?

1) What could be the reasons for the denial of the request for a loan? (2)

2) After the actions of the controller what would be your advice for FNB and why (7)

3) Are the actions of the financial controller ethical? (1)

NB: limit your answer for all 3 sub-questions to 500 words or less

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Question 3 10 marks Barton Company requested a large loan from First National bank to acquire a large piece of land for future expansion. Bart reported current assets of R1,900 ,000 (R430 000 in...

Question 3 10 marks Barton Company requested a large loan from First National bank to acquire a large piece of land for future expansion. Bart reported current assets of R1,900,000 (R430 000 in cash)...

Barton Company requested a large loan from First National bank to acquire a large piece of land for future expansion. Bart reported current assets of R1,900 ,000 (R430 000 in cash) and current...

Barton Company requested a sizable loan from First Federal Bank to acquire a large tract of land for future expansion. Barton reported current assets of $1,900,000 ($430,000 in cash) and current...

CP17-5 Making Ethical Decisions: A Mini Case Capital Investments Corporation (CIC) requested a sizable loan from First Federal Bank to acquire a large piece of land for future expansion. CIC reported...

13-4, 13-5 S13-4 Ethical Decision Making: A Mini-Case Capital Investments Corporation (CIC) requested a sizable loan from First Federal Bank to acquire a large piece of land for future expansion. CIC...

Capital Investments Corporation (CIC) requested a sizable loan from First Federal Bank to acquire a large piece of land for future expansion. CIC reported current assets of $1,900,000 (including...

S13-5 Ethical Decision Making: A Mini-Case LO 13-4, 13.5 Capital Investments Corporation (CIC) requested a sizable loan from First Federal Bank to acquire a large piece of land for future expansion....

Capital Investments Corporation ( CIC ) requested a sizable loaks from First - ? - deral Bank to acquire a large piece of land for future expansion. CIC reported current assets of $ 1 , 9 0 0 , 0 (...

Could you evalute this business plan and point out the errors? Thank you! Lake View Oil Change Service, Inc. Business Plan 1 Table of Contents I. Introduction II Company Description III. Industry,...

Quantum numbers Q. What are quantum numbers?

Of the 300 pages in a particular book, 180 pages are primarily nontechnical, while the remainder of the pages are technical. Independent random samples of technical and nontechnical pages were taken,...

After Lance finished reading an article titled "The Top 1 0 Guitarists of All Time" on the music website Strings, he closed the page. Subsequently, he saw an ad on his screen that invited him to...

Estasistica

Develop a step-by-step plan of actions you would take and the order in which you would undertake them if you were made HR director of the Reynolds subsidiary.

What problems do you see with the incentives for (a) executives, (b) production workers, (c) salespeople, and (d) hourly employees?

What laws were probably being violated?