Finance Accounting Senior Accountant Analysis Due Week 5 ✓ Solved

Inance Accounting Senior Accountant Analysisdue Dateweek 5note Wh

Inance Accounting Senior Accountant Analysisdue Dateweek 5note Wh

Inance & 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.

Sample Paper For Above instruction

Introduction

In the dynamic landscape of retail and small business expansion, effective financial management and strategic decision-making are pivotal for sustainable growth. As the senior accountant at SunsTruck Sunglasses, my role encompasses evaluating financing options, guiding the accounting cycle, and ensuring that financial statements accurately reflect the company’s health to attract potential investors. This comprehensive analysis entails selecting the optimal financing method, understanding the subsequent steps in the accounting process, and identifying the crucial financial data needed for investor scrutiny.

Evaluation of Financing Options

The junior accounting team has provided three different financing options to secure the funds necessary for expanding to five additional stores. Each of these options likely presents varying costs, risks, and strategic implications. My first step is to analyze these options based on criteria that Shaun, the owner, has prioritized, such as cost efficiency, repayment terms, impact on cash flow, and long-term sustainability.

After examining the report, I believe that the best financing option for SunsTruck is a low-interest business loan. This choice offers manageable debt repayment terms without significantly diluting ownership or future profitability. A traditional bank loan provides predictable repayment schedules and fixed interest rates, enabling the company to plan accordingly. Moreover, leveraging debt in this context can finance expansion without relinquishing equity, which is advantageous for maintaining control over the company. This aligns with Shaun’s constraints of minimizing financial strain while ensuring sufficient capital for growth.

This decision is grounded on the fact that a well-structured loan provides necessary liquidity while preserving the company’s ownership structure and offers tax-deductible interest payments, reducing overall tax liability. While alternatives like venture capital or issuing equity may dilute ownership, and perhaps have less immediate repayment burdens, they might come with more stringent investor conditions or higher costs in the long term. Therefore, considering the company’s current financial position, utilizing a manageable loan is the strategic priority.

Next Step in the Accounting Cycle

The next step in the accounting cycle after acquiring financing involves recording the transaction in the accounting system. The junior accountant has raised a question regarding what the subsequent action should be after securing the new funds. The appropriate next step is to journalize the financing in the accounting records as a liability (e.g., a loan payable) and simultaneously recognize the cash inflow.

This step is crucial because accurate recording ensures that financial statements reflect the company’s liabilities and cash position. Proper entries include debiting the cash account and crediting the loan payable account. This transaction then feeds into the subsequent stages of the accounting cycle, such as posting, adjusting entries (if necessary), and preparing financial statements.

It is important to emphasize to the junior accountant that precise and timely recording of financing transactions maintains the integrity of financial data, facilitates future reconciliation, and supports accurate financial reporting. This foundational step ensures that the financial impact of the new funds is properly reflected in the company’s books, enabling informed managerial decisions and compliance with accounting standards.

Financial Statement for Presenting Debt Information

Prior to obtaining investment, the potential investor requests information concerning SunsTruck’s current debt levels. The appropriate financial statement to provide this information is the Balance Sheet (also known as the Statement of Financial Position). The balance sheet details all of the company's assets, liabilities, and equity at a specific point in time, offering a clear snapshot of the company’s financial position.

Within the balance sheet, liabilities section, the current and long-term debts are listed. The “Liabilities” category will include items such as loans payable, credit lines, and other borrowings. This comprehensive overview allows investors to assess the company’s leverage, liquidity, and ability to meet its obligations.

I am instructing the junior accountants to prepare and review the balance sheet because it consolidates all debt-related information in one place, making it easy for the potential investor to evaluate SunsTruck’s financial stability. Transparency about debt levels, repayment schedules, and debt-to-equity ratios helps build investor confidence and supports strategic planning for future financing needs.

Conclusion

In conclusion, strategic financial decision-making and accurate accounting practices are vital for SunsTruck’s expansion and ongoing success. Selecting the best financing option involves careful analysis of costs and strategic fit, while understanding the next steps in the accounting cycle ensures the integrity of financial records. Providing clear, accurate financial statements, especially the balance sheet, informs investors and facilitates sound business growth.

References

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