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unit 6 dq accounting - depreciation of Trucks and equipment...

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Hello professor and class, I would tell her that, the Income Statement, Statement of owners equity and Balance Sheet give a view of the financial position of the company. Income statement shows the difference between revenues and expenses. It shows the total revenue earning potential of the organization. Also a profit or loss of a particular period is shown by the income statement. Profitability is the major factor in determining the repayment capacity of organization. Owner’s equity shows the extent of owners contribution in financing further. Balance Sheet portrays the wealth of the organization. Statements on overall basis represent the borrower’s capacity to pay installment and repayment of principal. Two adjustment entries seems to be passes, one for usage of supplies and other to record
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Unformatted text preview: depreciation of Trucks and equipment, like; Supplies expenses - DR Supplies Cr. Depreciation expense - DR Accumulated depreciation Cr. Other adjusting entries may be of prepaid expenses, if any or other expense payable may be passed but as the data is not given, therefore it may be assumed that all expenses have been recorded for the period. Considerations and information may be required before making decision on loan sanction like, The age of business, how old the business is running, Any loan already taken and what is the status of that loan, and how much is financed by equity so the loan to value ratio may be developed. She could repay security by way of mortgage or pledge. Reference; http://www.allbusiness.com/business-finance/business-loans-commercial-term/3543-1.html...
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