WendyEller2-EthicsLesson-Unit6

WendyEller2-EthicsLesson-Unit6 - Company. His job is to be...

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Class, Scenario:  The treasurer of Wilson Sales, Co., Patrick Axle, borrowed $50,000.00 from the company and  placed a note in his desk drawer, promising to repay the loan. However, Patrick did not record  the loan on the company’s books, and therefore did not report the loan on the company’s  balance sheet. Questions:  Should Patrick have borrowed the money from Wilson Company? Should the loan be recorded  and reported on Wilson Company’s balance sheet? If so, in what kind of account should the  loan be recorded? Answers:  Technically, Patrick being “only” a treasurer should not have borrowed the money from Wilson 
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Unformatted text preview: Company. His job is to be in charge of and oversee the money. This does not mean he can take money anytime he wishes. However, seeing as he did borrow the money, he should of at the least recorded and reported the loan on the balance sheet. Finally, Patrick should have recorded the loan on the balance sheet just below the liabilities section, in the owner’s equity account. This is because he decreased the owner’s equity by the $50,000.00 when he borrowed the money. Owner’s equity is then added to the total liabilities and this total must be equal to the total assets. Wendy Eller...
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This note was uploaded on 12/08/2009 for the course AC114 AC114 taught by Professor Duchac during the Fall '09 term at Kaplan University.

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