Everclean Service had borrowed a loan of $25,000 confident that the

business will pull through but with a condition that the business will have $10,000
more current assets than liabilities. As the unadusted trial balance was made, it
showed that there in fact were ust enough assets for liabilities and that in the
financial statement, current assets were about $25,000 and current liabilities
were around $12,500 and their difference showed that current assets were
$1!,000 more than liabilities. "owever, after the adustments were made, there
was actuall# a net loss of $$,%00 that meant that the conditions of the loan were
not met.
Another reason wh# the conditions were not met is because after
adustment, total current assets were about $2&,'00 and current liabilities were
$2',200. (he loan specificall# said that there should be about $10,000 more
current assets than liabilities but results show that it was actuall# bac)wards.
(his is rather unfortunate as now Everclean has lost the trust of the ban) and is
now left to loo) for a lone elsewhere.
*n a lighter note, her financial statement is still balanced which means
that there are enough assets for liabilities. (he onl# thing she should do ne+t time
would be to satisf# conditions first and then ma)e do with the borrowing. *nce
this is done, what is left to do is to ma)e sure that the loan could be paid off. (his
wa# is much better and is more trustworth# and careful.