Senior Accountant Analysis Assignment
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Senior Accountant Analysis Assignment
ASSIGNM E NT
Finance and Accounting
Senior Accountant Analysis
1
DU E DATE
Week 5
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SHAUN’S CRITERIA Hi Team,
I wanted to provide you some guidelines as you determine how we’ll finance our expansion. Please give this careful consideration, as we need to get this right.
- I estimate we’ll need $150,000 to increase capacity in order to stock the five additional pop-up stands
- We’ll need to make sure we have additional funds available to increase our marketing efforts to stimulate demand
- Cash flow is going to be tight, so I’d like to minimize interest payments
- I’d like to maintain or increase our profit margins
- Since I don’t have a lot of experience with big discount retailers, I’d like to add a thought partner with experience in this channel
- If we’re successful over the next two years, we’ll likely seek additional capital to expand into more stores, so I’d like to do all we can now to enhance our credibility
We need to move on this quickly, so I’d like an answer by the end of the week.
-Shaun
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FINANCING OPTIONS
Option 1: Equity Raise $150,000 from a venture capital firm in exchange for 30% of the company
Option 2: Debt
Secure a loan of $150,000 at a 10% annual interest rate, to be repaid over 7 years
Option 3: Debt + Self-Financing
Secure a loan of $100,000 at a 7% annual interest rate, to be repaid over 7 years, and self- finance the remaining $50,000
JUNIOR ACCOUNTANT EMAIL
Hi,
I’m working on expenses from the last quarter for the revised income statement, but I’m unsure of what to do next. I grouped similar transactions to compile the following list:
How would you like me to proceed given where we are in the process? Thanks in advance for your guidance.
Best,
Jenna S.
- automotive maintenance cost
- travel expenses
- training and development costs
- office rent
- raw material purchases
- inventory purchases
- marketing expenses
- payroll expenses
- interest expenses
- technology purchases
- office supplies expenses
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SUNSTRUCK SUNG LASSES INCOME STATEMENT
For Year Ended September 30, 2016
REVENUES
Sales revenues
Other revenue
Total revenue
COST OF GOODS SOLD (COGS)
GROSS PROFIT
EXPENSES
Selling, general and administrative expenses
Marketing and advertising expenses
Total expenses
INCOME FROM OPERATIONS
OTHER EXPENSES
Interest expense
$778,590
$11,000
$789,590
($428,225)
$361,365
($78,959)
($55,271)
($153,050)
$208,314
($51,000)
$157,315
Income tax expense
NET INCOME
PRETAX INCOME
($55,060)
$22,500
Depreciation and amortization ($18,820)
$102,255NET INCOME
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SUNSTRUCK SUNG LASSES BALANCE SHEET
At September 30, 2016
ASSETS
CURRENT ASSETS
Cash
Accounts receivable
Merchandise inventories
Total current assets
LONG-TERM ASSETS
Property, truck and equipment
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
$145,500
$468,000
$613,500
$37,500
LONG-TERM LIABILITIES
Truck loan
Accounts Payable
$28,000
$55,220
$62,280
$40,000
B+M loan $360,000
Total long-term liabilities
TOTAL LIABILITIES $479,500
SHAREHOLDERS’ EQUITY
CONTRIBUTED CAPITAL $12,000
RETAINED EARNINGS
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
TOTAL SHAREHOLDERS’ EQUITY
$122,000
$442,000
$134,000
$613,500
Operating loan $42,000
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$75,000
SUNSTRUCK SUNG LASSES STATEMENT OF CASH FLOWS
For Year Ended September 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Cash collected from customers
Cash paid to suppliers and employees
Cash paid for interest
Cash paid for taxes
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid on truck loans
$99,140
($20,000)
($529,580)
($50,000)
($55,060)
$733,780
Net cash used for investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from operating cash loan
($60,000)
$12,000
NET INCREASE IN CASH DURING YEAR
CASH AT BEGINNING OF YEAR
Net cash provided by financing activities
($23,255)
CASH AT THE END OF YEAR TO DATE $27,885
$12,000
$51,140
Cash paid on B+M loans ($40,000)
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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