Finance Accounting Senior Accountant Analysis Due Date Week

Finance Accounting Senior Accountant Analysisdue Dateweek 5note W

Finance Accounting Senior Accountant Analysis due Date week 5 note W

FINANCE & ACCOUNTING - SENIOR ACCOUNTANT ANALYSIS Due Date Week 5 Note: While representative of possible situations faced by SunsTruck Sunglasses, all scenarios in this assignment are fictional. Real Business Large discount retailers like Target and Walmart employ large teams of Finance and Accounting professionals to help measure and understand the financial health of the business. Financial and accounting information helps these businesses make educated financial decisions, such as whether or not to continue partnering with a retail supplier. While often smaller businesses, it is equally important for these retail suppliers to use financial and accounting data to make educated decisions, such as the best approach to gaining additional funding.

Your Role This week, you’ll assume the role of Senior Accountant with SunsTruck Sunglasses. Senior accountants take ownership of reporting costs, profitability, margins and expenditures for a given business. They use the principles of accounting to analyze sales information, create financial reports, make recommendations about the financial health of the company, and more. They are also responsible for training junior accounting staff. For the last six months, SunsTruck has partnered with the discount retail store to run a pop-up sunglasses stand in their stores for a big summer promotion.

Due to the high customer purchase rate, the store has requested stock for five additional stores. SunsTruck needs to increase its capacity to meet the additional demand. In order to do so, SunsTruck needs additional money. In this assignment, you will need to help determine which type of financing option is best for your company and train your junior accountants on the accounting cycle and financial statements. INSTRUCTIONS Step 1: Financing The junior accounting team has assembled a Financing Report that (a) offers three options for securing the additional funds required to meet the new order; and (b) details the criteria Shaun, the owner of SunsTruck, would like you to consider when choosing one of the three options.

Based on this report: Identify which financing option you think is the best option for SunsTruck to pursue given Shaun’s constraints. Please explain the rationale for your decision. Note: You should complete Steps 2 & 3 after reading the material in Week 5. Step 2: Accounting Cycle A junior accountant is working to get everything in order for the new financing and has come to you with a question about what do next in the accounting cycle. Read the email the junior accountant sent you and identify the best next step to take in the accounting cycle. Please explain your reasoning. Step 3: Financial Statements A potential investor has been identified, but before it is willing to commit, it has requested information about SunsTruck’s current debt from the junior accountants. Identify the correct financial statement for your junior accountants that will provide the investor with the information it has requested. Please explain to your junior accountants why you are giving them this financial statement and where the debt information is located.

Paper For Above instruction

In the dynamic landscape of retail and manufacturing, financial decision-making is paramount to sustaining growth and competitive advantage. As the Senior Accountant at SunsTruck Sunglasses, my role encompasses analyzing financial options, understanding accounting cycles, and preparing essential financial statements to inform strategic choices. This paper discusses the evaluation of financing options, the progression within the accounting cycle, and the importance of financial statements in investor relations, emphasizing their relevance to SunsTruck’s current operational needs.

Assessment of Financing Options

Based on the financing report provided by the junior team, SunsTruck faces a critical decision regarding how to fund the expansion needed to meet the increased demand across five additional retail stores. The options typically considered include bank loans, equity financing, and trade credit or supplier financing. Each option presents distinct advantages and disadvantages concerning cost, control, and repayment obligations.

Bank loans often offer the benefit of structured repayment plans and can be secured relatively quickly; however, they impose fixed interest costs and require collateral, which might limit flexibility. Equity financing—involving selling shares—dilutes ownership but can be advantageous when cash flow constraints exist, as there are no immediate repayment requirements. Trade credit or supplier financing, such as extended payment terms, can be beneficial for managing cash flow without incurring additional debt but may not suffice for substantial capital needs.

Considering Shaun’s constraints, which likely involve cost sensitivity and risk management, I recommend pursuing a bank loan with favorable interest rates or exploring a hybrid approach combining trade credit with a smaller bank loan. This strategy balances the need for capital with manageable repayment terms and maintains financial flexibility. The rationale is that a bank loan provides the additional funds needed promptly while preserving ownership control, which aligns with the current strategic objectives. Additionally, the loan’s interest expense can be justified as a cost of expansion, provided that projected sales comfortably cover debt service obligations.

Next Step in the Accounting Cycle

The accounting cycle involves a series of steps—from identifying transactions to presenting financial statements—designed to systematically record and report a company's financial activities. After securing new financing, the immediate next step in the cycle is to record the transaction appropriately in the accounting records.

The email from the junior accountant likely inquires about whether to record the loan as a liability and how it affects the cash and equity accounts. The best next step is to journalize the financing transaction — specifically, to debit cash or bank account and credit the corresponding liability account, such as “Long-term Debt” or “Notes Payable.” This entry recognizes the inflow of funds and the company's obligation to repay it, aligning with the accounting principle of duality.

This step is critical because it ensures that the financial records accurately reflect the company's current financial position. Proper recording also facilitates subsequent steps such as adjusting entries, preparing trial balances, and ultimately creating financial statements. Accurate documentation at this stage maintains the integrity of financial reporting and provides a foundation for analysis and decision-making.

Financial Statement for Current Debt Information

When a potential investor requests information about SunsTruck’s current debt, the primary financial statement to consult is the Balance Sheet, also known as the Statement of Financial Position. The balance sheet provides a snapshot of the company's assets, liabilities, and equity at a specific point in time.

The debt information is located within the liabilities section of the balance sheet. Specifically, current debts such as short-term loans, accounts payable, and other obligations are listed under current liabilities, while long-term debt appears under non-current liabilities. Providing this statement allows the investor to see the total amount of debt owed, the maturity profile, and how leverage affects the company's financial health.

Explaining to the junior accountants, I emphasize that the balance sheet offers a comprehensive view of the company's financial obligations at a given date. For assessing the company's leverage, solvency, and liquidity, the balance sheet is indispensable. It enables an investor to evaluate whether SunsTruck’s debt levels are manageable and whether the company maintains sufficient assets to cover its liabilities, informing their investment decision.

Conclusion

Financial management is essential for SunsTruck’s expansion and long-term sustainability. Selecting the optimal financing option requires understanding the company’s constraints and strategic goals. Recording transactions accurately in the accounting cycle ensures reliable financial data, while financial statements like the balance sheet serve as vital tools for transparency and stakeholder communication. As a senior accountant, my role is to facilitate these processes, providing clarity and insight to guide sound financial decisions that support SunsTruck’s growth trajectory.

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