Name: Cruz, Jian Marco G.

Section: BSCS 211

Instruction: Respond to the scenario below by using the P-M-I Chart. Write your
answers in the spaces provided. (20 points)

• In the Interesting box, write some facts about the specific financial statement.

Scenario: Shark Loans received a request for a construction loan from Wendy
Services Inc. This construction loan will be used to build their fifth branch in
Pasay. The company submitted its balance sheet and income statement. Help
Shark Loans choose which financial statement they would use as a basis on
whether they will accept or reject Wendy Services Inc.'s request. Refer to Page
2. Justify your decision.

Response 1: Statement of Financial Position

Plus Minus
Total assets : The sum of the owner's
equity and liabilities
200A: 514,745 equals the sum of the
200B : 651,990 assets:

200A : 514,745
200B : 651,990

Interesting :
 - Owner's equity, total assets, and total liabilities all add up to the same
amount for 200A.
- The total assets, total liabilities, and owner's equity are all the same for
200B.

Response 2 : Income Statement

Plus Minus
Net Income : Their income is less than
their expenses on 200A.
200A : 250,000
200B : 550,000 The Expense of 200A is
350,000 while the Income
200A is 250,000

So meaning they will

gradually become more
indebted.

Interesting:
In 200B, income exceeds expenditures.
Expense 200B : 350,000
Income 200B : 550,000

My Decision:
The 200B basis may be used if they accept Wendy's Services Inc.'s proposal.
The risk is higher given the quantity of money at danger, so Wendy's Services
Inc. must sustain its earnings. They might not have any money to leave behind,
but their assets will surely continue to grow.