Describe reasons given in the textbook on how loans to corporate officers should be handled (2-3 paragraphs).

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Picasso Graphics is a graphics arts design consulting firm. Pablo Taylor, its treasurer and vice president of finance, has prepared a classified balance sheet as of July 31, 2016, the end of its fiscal year. This balance sheet will be submitted with Picasso Graphics’ loan application to Paris Trust & Savings Bank.
In the Current Assets section of the balance sheet, Pablo reported a $56,000 receivable from Becky Holt, the president of Picasso Graphics, as a trade accounts receivable. Becky borrowed the money from Picasso Graphics in January 2014 for a down payment on a new home. She has orally assured Pable that she will pay off the account receivable within the next year. Pablo reported the $56,000 in the same manner on the preceding year’s balance sheet.
Required: Evaluate whether it is acceptable for Pablo to prepare the July 31, 2016 balance sheet in this manner. Describe reasons given in the textbook on how loans to corporate officers should be handled (2-3 paragraphs).
I don’t know which part in chapter 4 that can help so I uploaded the whole of chapter 4 for you to revise. Cite only from that.
Please don’t plagiarizbcie, it’s my senior year

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