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Barton Company Ethical Dilemma Paper

Satisfactory Essays
Introduction
This paper will look at an ethical dilemma regarding the Barton Company (as seen below). First Federal Bank has denied the Barton Company a loan. However, the comptroller paid some outstanding bills and then the loan was approved by the bank. The dilemma is, was the comptroller correct in his actions and should the bank loan them the money. Now, to look at what the text asked.
Barton Company
Barton Company requested a large loan from First Federal Bank to acquire a track of land for future expansion. Barton reported assets of $ 1,900,000 ($430,000 in cash) and current liabilities of $1,075,000. First Federal denied the loan request for a number of reasons, including the fact that the current ratio was below 2:1. When Barton was informed of the loan denial, the controller of the company immediately paid $420,000 that was owed to several trade creditors. The controller than asked First Federal to reconsider the loan application. Based on these abbreviated facts, would you
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Also, the comptroller was ethical in paying $420,000 in Bills. The company had $430,000 in cash. Therefore, his action leaves the company $10,000 in cash. Obviously, the comptroller knew how to increase the current ratio to the needed amount to be approved for the loan. The comptroller action was ethical and the loan should be approved. Food for thought, why did the comptroller wait until after the loan was
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