How would you respond to Sergio Alonzo’s request?

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The Encore Video Store Co. is owned and operated by Sergio Alonzo. The following is an excerpt from a conversation between Sergio Alonzo and Suzie Engel, the chief accountant for The EncoreVideo Store:

Sergio: Suzie, I’ve got a question about this recent balance sheet.

Suzie: Sure, what’s your question?

Sergio: Well, as you know, I’m applying for a bank loan to finance our new store in Cherokee, and I noticed that the accounts payable are listed as $120,000.

Suzie: That’s right. Approximately $100,000 of that represents amounts due our suppliers, and the remainder is miscellaneous payables to creditors for utilities, office equipment, supplies, etc.

Sergio: That’s what I thought. But as you know, we normally receive a 2% discount from our suppliers for earlier payment, and we always try to take the discount.

Suzie: That’s right. I can’t remember the last time we missed a discount.

Sergio: Well, in that case, it seems to me the accounts payable should be listed minus the 2% discount. Let’s list the accounts payable due suppliers as $98,000, rather than $100,000. Every little bit helps. You never know. It might make the difference between getting the loan and not.

How would you respond to Sergio Alonzo’s request?

 

Needs to be at least 100 words. I would need this by no later than 05/18/2013 12pm CT

    • 11 years ago
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