Case: Balance Sheet and Personal Financial Information

Case cartoon Companies must report or happen upon in their monetary statements study about only liabilities, including potential liabilities related to environmental clean-up. There atomic number 18 m whatsoever situations in which you onlyow be asked to provide personal financial information about your assets, liabilities, revenue, and expenses. Sometimes you will face difficult decisions regarding what to see and how to disc leave out it. Instructions Suppose that you are putting together a impart application to purchase a home. Based on your income and assets, you throw out for the mortgage loan, but just barely.How would you address to each one of the following situations in reporting your financial position for the loan application? Provide responses for each of the following situations. a) You signed a guarantee for a bank loan that a friend took out for $20,000. If your friend doesnt pay, you will harbour to pay. Your friend had made all of the payments so far, a nd it appears he will be able to pay in the future. For this situation I would be in person liable for the $20,000 he borrowed. It is twain a liability and an expense for both parties.When applying for my loan I would have to put forward sure to cave in that all payments have been made and on time. Since my friend never failed to make any payments I shouldnt face too much resistance from get the loan. In my opinion I would not share or disc omit this information with the bank since this particular situation does not seem it will become a problem. b) You were involved in an auto accident in which you were at fault. There is the possibility that you may have to pay as much as $50,000 as part of the settlement. The issue will not be resolved before the bank processes your mortgage request.In this case you are have earned a liability and another expense. It would be highly unethical not to disclose such information with the bank. If for some curtilage you omit this information and the bank finds out about it later, you could be at fault since you lied to the institution that evaluated their risks without taking in consideration all of the factors involved. It would be wiser to settle your liability of 50,000 dollars before acquiring new expenses. c) The confederacy at which you work isnt doing very well, and it has recently laid come to employees.You are still employed, but it is quite possible that you will lose your job in the next few months. Since the probability of you losing your job is undisclosed I dont think it would be necessary to disclose any of this information with the bank. However if you receive a loan and lose your job you would still be held liable with this current expense. The only panache to make a definite decision is to wait and see what happens with your company, or in the other if you want to take a risk and make the loan it would be unwise to disclose your current possibility of losing your job.