Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterprises as a basis for granting the loan. Colleen has told her accountant to provide the bank with a balance sheet. Colleen has decided to omit the other financial statements because there was a net loss during the past year. In groups of three or four, discuss the following questions: 1. Is Colleen behaving in a professional manner by omitting some of the financial statements?

Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterprises as a basis for granting the loan. Colleen has told her accountant to provide the bank with a balance sheet. Colleen has decided to omit the other financial statements because there was a net loss during the past year. In groups of three or four, discuss the following questions: 1. Is Colleen behaving in a professional manner by omitting some of the financial statements?

Name: Colleen Fernandez, president of Rhino Enterprises, applied for a $175
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Description: Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from FirstFederal Bank. The bank requested financial statements from Rhino Enterprises as a basis forgranting the loan. Colleen has told her accountant to provide the ban

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter4: Adjusting Entries And The Work Sheet

Section: Chapter Questions

Problem 4A: Your client is preparing financial statements to show the bank. You know that he has incurred a...

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Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterprises as a basis for granting the loan. Colleen has told her accountant to provide the bank with a balance sheet. Colleen has decided to omit the other financial statements because there was a net loss during the past year. In groups of three or four, discuss the following questions:1. Is Colleen behaving in a professional manner by omitting some of the financial statements?2. a. What types of information about their businesses would owners be willing to provide bankers? What types of information would owners not be willing to provide?b. What types of information about a business would bankers want before extending a loan?c. What common interests are shared by bankers and business owners?
Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterprises as a basis for granting the loan. Coleen has told her accountant to provide the bank with just the balance sheet. Colleen has decided to omit the other financial statements because there was a net loss during the past year. The accountant, Jim Long, only sent over the balance sheet to First Federal Bank Did Jim act ethically or unethically? Why?
Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterprises as a basis for granting the loan. Colleen has decided to omit the other financial statements because there was a net loss during the past year. Is Colleen behaving in a professional manner by omitting some of the financial statements? Justify your answer. What types of information about their businesses would owners be willing to provide bankers? What types of information would owners not willing to provide? What types of information about a business would bankers want before extending the loan? What common interests are shared by bankers and business owners?
Helen Hernandez, president of Double H Enterprises, applied for a $175,000 loan from Great Nations Bank. The bank requested financial statements as a basis for granting the loan. Helen instructed her accountant to provide the bank with a balance sheet, but to omit the other financial statements because her business incurred a net loss last year. Helen contends that as the owner of the business, it is her right to withhold certain financial statements from the bank. Do you agree with Helen? Why or why not? What type of information would banks require from a loan applicant and why would the loan officer request this information?
Flo Choi owns a small business and manages its accounting. Her company just finished a year in which a large amount of borrowed funds was invested in a new building addition as well as in equipment and fixture additions. Choi’s banker requires her to submit semiannual financial statements so he can monitor the financial health of her business. He has warned her that if profit margins erode, he might raise the interest rate on the borrowed funds to reflect the increased loan risk from the bank’s point of view. Choi knows profit margin is likely to decline this year. As she prepares year-end adjusting entries, she decides to apply the following depreciation rule: All asset additions are considered to be in use on the first day of the following month. (The previous rule assumed assets are in use on the first day of the month nearest to the purchase date.) Required 1. Identify decisions that managers like Choi must make in applying depreciation methods. 2. Is Choi’s rule an ethical…
Flo Choi owns a small business and manages its accounting. Her company just finished a year in which a large amount of borrowed funds was invested in a new building addition as well as in equipment and fixture additions. Choi’s banker requires her to submit semiannual financial statements so he can monitor the financial health of her business. He has warned her that if profit margins erode, he might raise the interest rate on the borrowed funds to reflect the increased loan risk from the bank’s point of view. Choi knows profit margin is likely to decline this year. As she prepares year-end adjusting entries, she decides to apply the following depreciation rule: All asset additions are considered to be in use on the first day of the following quarter. (The previous rule assumed assets are in use on the first day of the month nearest to the purchase date.) Discuss the following: Identify decisions that managers like Choi must make in applying depreciation methods. Is Choi’s rule an…
Your client is preparing financial statements to show the bank. You know that he has incurred a refrigeration repair expense during the month, but you see no such expense on the books. When you question the client, he tells you that he has not yet paid the 1,255 bill. Your client is on the accrual basis of accounting. He does not want the refrigeration repair expense on the books as of the end of the month because he wants his profits to look good for the bank. Is your client behaving ethically by suggesting that the refrigeration repair expense not be booked until the 1,255 is paid? Are you behaving ethically if you agree to the clients request? What principle is involved here?
Gail is a director in a regional bank. As part of her director’s duties, she has to review financial statements and other reports from the Chief Financial Officer prior to the bank’s board meetings. Gail has a degree in economics and has worked in banking for many years, however, since becoming a director she believes accounting knowledge would assist her carry out her duties. Gail incurred various costs in undertaking a Bachelor of Commerce in professional accountancy with the University of Southern Queensland. During the year ending 30 June 2021 Gail incurred the following costs related to the course:  HELP fees $2,600  Stationery $180  Textbooks $220  Expenses of travelling between her job and USQ where the course was being held $120 Required: Discuss whether any amounts of expenditure incurred by Gail would be allowable as a deduction during the year ended 30 June 2021 under any section of the Income Tax Assessment Acts. Support your discussion with reference to legislation,…
Magi Chen is the managing director of Sun Construction Pty Ltd, a family owned business that provides construction services. As Magi is interested in purchasing some new construction equipment’s for her business, she has approached her local bank for finance. The bank has asked that Magi provide an audited financial statement to assist them in considering her loan application. Magi has approached your audit firm for this service and you have been allocated the task of auditing Sun Construction for the year ended 30 June 2019. You have undertaken a preliminary review of the business and determined that a substantive testing approach would be suitable and appropriate. You are currently preparing an audit program for the revenue cycle. The following information has been obtained from your review:• Magi usually works 120 hours a fortnight. Part of this time is spent travelling between different clients and is not charged to the clients. The remaining time is charged at $60 per hour,…
Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterprises as a basis for granting the loan. Colleen has told her accountant to provide the bank with a balance sheet. Colleen has decided to omit the other financial statements because there was a net loss during the past year. In groups of three or four, discuss the following questions: 2. a. What types of information about their businesses would owners be willing to provide bankers? What types of information would owners not be willing to provide? b. What types of information about a business would bankers want before extending a loan? c. What common interests are shared by bankers and business owners?
Your small business client, Phillip’s Computer Repair Shop, is experiencing financial difficulties and has to lay off one of its four employees in the accounting area. Phillip has asked you to determine what duties should be assigned to the three remaining employees—Abigail, Bryan, and Chris—to maintain the best separation of duties.Required:Assign the following 10 duties to each of the three employees.a. Reconcile bank statement.b. Open mail and list checks.c. Prepare checks for Phillip’s signature.d. Prepare payroll checks.e. Maintain personnel records.f. Prepare deposit and take to bank.g. Maintain petty cash.h. Maintain accounts receivable records.i. Maintain general ledger.j. Reconcile accounts receivable records to general ledger account.
It’s been two years since Ramone finished his undergraduate studies in Business Administration with an emphasis in Accounting. He has been trying to seek employment to help the family, as both his parents spent most of their life’s savings to pay his university tuition. Three weeks later, Ramone was called for an interview with the Ministry of National Integrity (MNI). He had forgotten that he had applied for the position of Junior Auditor within the Ministry. The panel consisted of several top-level managers, including the Chief Audit Executive (CAE) and the Senior Director of the Human Resource & Administrative Division (HRMA). The Senior Director of HRM&A stated that they were impressed with his resume, however, before they can decide on giving him the job, he will have to answer some questions relating to the Audit Report. The following were asked of him by the CAE. Required: a. Explain the term ‘audit report’, and state the four (4) types of audit reports that can be…