Bear Creek Country Club Fall Semester 2018 Part I Descriptio

Bear Creek Country Club Llc Fall Semester 2018part Iidescription O

This assignment involves recording transactions for Bear Creek Country Club, LLC for August 2018, including purchase and sale of inventory, accounting for unearned golf lesson revenue, and other operational transactions. The tasks include preparing journal entries, adjusting entries, bank reconciliation, and supporting calculations using Double Entry accounting software and Excel worksheets. The assignment requires collaboration of up to three students, and submission includes multiple financial statements, reconciliations, and supporting calculations as specified, with a due date of November 15, 2018.

Paper For Above instruction

Introduction

The financial performance and operational efficacy of Bear Creek Country Club, LLC for August 2018 can be comprehensively analyzed through examination of its profitability, cash flows from operating activities, and the relationships between net income and cash flows. This paper presents an in-depth analysis based on the transaction recordings, financial statements, and supporting calculations from the provided case data. The focus is to interpret the company's financial health and operational success after two months of activity, as well as to recommend strategies for enhancing cash collection efficiency.

Profitability Analysis

To evaluate whether Bear Creek Country Club was profitable at the end of August, we analyze its income statement, which summarizes revenues and expenses. The primary revenue streams include green fees, rental fees, and lessons. According to the case, total green fee revenue collected was $175,000, and rental fees amounted to $18,750. The lesson revenue, based on 40 new sign-ups at $450 for six weeks, was recognized for four weeks in August, totaling $11,250 (40 × $450). Operating expenses included maintenance expenses of $28,500, salaries of $12,000, utility expenses of $42,500, and additional maintenance accrual of $1,300, totaling $84,600 are recorded for August.

Net income calculation considers revenues of $205,000 (green fees + rentals + lessons) against total operating expenses. The gross profit from golf course operations suggests a positive net income for August, indicating that the company was profitable at the end of its second month of operation. Given this, it is reasonable to conclude that the golf course is on a successful trajectory, assuming revenues cover expenses and contribute to profitability.

Cash Flows from Operations

Cash flow analysis utilizes the statement of cash flows, derived from detailed bank reconciliations and cash transactions recorded in Double Entry software. During August, the company received $175,000 in cash from green fees and $18,750 from rentals. Payments for expenses such as salaries ($10,000 paid), utility expenses ($42,500), and maintenance expenses ($28,500) are recorded as cash outflows. The collection of golf lesson fees and inventory sales on credit are distinguished, with actual cash collections primarily from green and rental fees.

Positive cash flows from operating activities indicate the company successfully generated cash during August. These cash inflows exceed cash outflows from expenses and liabilities payments, resulting in a net increase in cash, which aligns with the bank statement showing a cash balance of $207,950. Accurate reconciliation confirms that cash inflows and outflows from operating activities support the net cash increase, implying operational efficiency in cash management.

Relationship Between Net Income and Cash Flows

The net income for August exceeds the cash flows from operations, largely because of non-cash revenues and expenses. Notably, revenues from lessons beginning in June and the accrued interest expenses on the note payable contribute to net income but do not immediately impact cash flows. Likewise, the recognition of unearned revenue from golf lessons initially recorded as a liability is recognized as revenue in August, but the corresponding cash was received earlier or will be received later.

Furthermore, accounts payable for inventory and other accrued expenses increase liabilities without immediate cash payment, inflating net income relative to the actual cash position. This discrepancy underscores the importance of analyzing cash flow statements to assess liquidity and operational performance accurately.

Strategies to Accelerate Cash Collection

To improve cash collection, Bear Creek Country Club could implement strategies such as offering discounts for early payment of lessons and merchandise, enhancing invoicing processes to ensure prompt billing, and establishing electronic payment options for faster settlement. Implementing a proactive receivables management system, including regular follow-ups on overdue accounts, can also reduce collections lag. Additionally, promoting pre-paid memberships or packages could generate immediate cash inflows and improve liquidity.

Conclusion

Overall, the analysis indicates that Bear Creek Country Club, LLC was profitable at the end of August 2018, with positive cash flows from operating activities. The net income is higher than cash flows due to non-cash revenue recognition and accrued expenses. To sustain operational success and enhance cash flow, strategic improvements in receivables management are recommended. Continued focus on efficient cash collection and expense management will be crucial for maintaining financial health and supporting growth in subsequent months.

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