Journal Entries Unadjusted Trial Balance

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Journal Entries dec 12 2310142428 2930 unadjusted Trial Balance trap Adventures, Inc. Unadjusted Trial Balance December 31, 2015 Totals $ - 0 $ - 0 Adjusting Entries Dec Adjusted Trial Balance Trap Adventures, Inc. Adjusted Trial Balance December 31, 2015 Totals $ - 0 $ - 0 Financial Statements Trap Adventures, Inc. NOTE that there are THREE Statements included on this sheet. Income Statement For the year ended December 31, 2015 Revenues: $ - 0 Expenses: Total Expenses - 0 Net Income $ - 0 Trap Adventures, Inc. Statement of Stockholder's Equity For the year ended December 31, 2015 Common Stock Retained Earnings Totral Stockholder's Equity Beginning Balance, December 1, 2015 $ - 0 $ - 0 $ - Ending Balance, December 31, 2015 $ - 0 $ - 0 $ - 0 Trap Adventures, Inc. Balance Sheet December 31, 2015 Assets Liabilities Current Assets: Current Liabilities: $ - 0 Total Current Liabilities $ - 0 Total Current Assets $ - 0 Long-term Assets: $ - 0 Stockholder's Equity Total Long-term Assets $ - 0 $ - 0 Total Stockholder's Equity - 0 Total Assets $ - 0 Total Liabilities and Stockholder's Equity $ - 0 Closing Entries Dec Post-Closing Trial Balance Trap Adventures, Inc. Post-Closing Trial Balance December 31, 2015 Totals $ - 0 $ - 0 Writing Portion NOTE that this tab should be used for the writing portion of the Unit 5 IP Assignment. Answer two of the questions below in 1-2 fully developed paragraphs. A fully developed paragraph should have a major point with 3 to 5 support sentences. One or two sentences is not acceptable or does not discuss the question. Be sure to show what you know!!! 1. Trap Adventures, Inc. is looking for an accountant. In your own words, explain to Trap’s hiring team the role of accountant and accounting within business. Provide examples of the expectations of the accountant. 2. Discuss the financial position of Trap Adventures, Inc using the following ratios: Current ratio Return on equity For each ratio, provide the calculation and an explanation of the meaning. Is this a positive or negative result for the Trap Adventures, Inc.? 3. Using Trap Adventures, Inc.’s income statement, evaluate the operations for the month of December. Complete a common-size income statement using sales as the base number. What is the largest percentage? What is the smallest percentage? What recommendations could be made to increase Trap’s net income? 4. Currently, Trap Adventures, Inc. does not own any loans or bank notes (long-term liabilities). What would happen if Trap decides to obtain a bank loan for $25,000 to fund daily operations? How would this transaction impact the financial statements – which accounts would be affected? What is the debt to equity ratio? What does the debt to equity ratio represent? Ryan Egozzi Interview 1. Tell us briefly about your experience managing restaurants My experience managing restaurants has been volatile. It has taught me a lot about myself and more importantly it has taught me how to deal with people, both guests and team members alike. Managing restaurants has given me the ability to learn how to manage my time and how to teach others how to manage their time; it has shown me patience, shown me urgency and most importantly humbled me. 2. In those establishments, how did front of the house collaborate with calculating inventory Inventory calculation is a constant battle. Uphill for the most part, constantly checking actual versus theoretical usage, comparing computerized calculations with what is actually on the shelf. 3. How do you motivate your servers to do side work? I motivate my servers to do their side work by showing the benefits of completing it, and showing how side work is essential to the functionality of the restaurant. Sidework serves to ensure that the restaurant runs smoothly. Point of fact. 4. What challenges did you find when handling wait staff, and how did you address those problems? Personalities. It’s difficult to manage so many different people, everyone has their own take on how things should be done and very few are willing to buy into your system. It’s essential to get this buy in though, and you address the problems individually, case by case. 5. In the establishments that you worked, how did you train served to insure that they exhibited the behaviors that the establishments wanted. Examples are: upselling sourcing questions about menu items, suggestive selling, effective menu communication, etc. We trained our servers to do these specific things by showing them the direct relationship between their tip and their ability to provide each guest with a great experience, it just so happens that the servers’ ability to upsell, suggestive sell etc. will directly impact the guests’ experience. 6. Today’s restaurant industry practices one or two types of table service. However textbooks teach no less than four. What types of services did the establishments that you worked in used, and what place in today’s industry do you think the lesser use types of service occupy? Honestly, I possess no knowledge on specific service types, I have formulated my own idea of proper table service, mostly from my experience working in the FOH, I would assume that now a days no formal service type is practiced (aside from an antiquated "five star" or "five diamond" establishment) most restaurants, and other service establishments have done the same, putting bits and pieces of what works best for them together in order to provide their guests with what they believe is perfect service. 7. What types of behavior can a server employ to better understand the needs and expectations of the customers? AWARENESS. Nothing is more important than a servers’ awareness with his guests and tables. 8. When a table reservation is made, what information do you make your staff obtain? Guests full name, party size, any pertinent information about the reservation, i.e. Birthday, anniversary etc. phone number, seating preference. 9. Did you develop any tricks when you were in the industry that your competitors, or workers didn't do? We are constantly striving for perfection, and in that effort we are looking towards our competitors to see where they lack, in order to allow ourselves the ability to excel, by filling in these gaps. It became very clear to us that our guests did not feel at home, HOSPITALITY was lacking in 99% of the establishments that we viewed as competition, and so we implored our staff to make each and every guest feel as if they were a guest in our own home, no better way to accommodate.

Paper For Above instruction

The assignment requires a comprehensive understanding of basic accounting principles, ratio analysis, and financial assessment of Trap Adventures, Inc., based on provided financial data, as well as thoughtful responses to industry-specific interview questions. This paper will focus on analyzing the role of accounting in business, evaluating the company's financial position, and discussing potential impacts of a new bank loan.

Role of an Accountant and the Importance of Accounting in Business

An accountant plays a pivotal role in the management and operational success of a business. Generally, an accountant is responsible for recording, classifying, and interpreting financial transactions to help stakeholders make informed decisions. Their primary functions include bookkeeping, preparing financial statements, analyzing financial data, and ensuring compliance with tax laws and regulations. For instance, an accountant prepares income statements and balance sheets that reflect the company's financial position, enabling management to monitor performance and make strategic decisions. Additionally, accountants advise on budgeting and cost control, which are essential for maintaining financial health. By providing accurate and timely financial information, accountants help prevent fraud, reduce costs, and support business growth efforts, making their role indispensable in ensuring effective financial management and accountability.

Financial Ratios and Their Significance for Trap Adventures, Inc.

To assess the financial health of Trap Adventures, Inc., two key ratios are analyzed: the current ratio and return on equity (ROE). The current ratio is calculated as current assets divided by current liabilities. Given the financial statements show total current assets of $0 and total current liabilities of $0, the ratio is indeterminate; however, if these figures were positive, the calculation would show the company's ability to meet short-term obligations. A high current ratio indicates strong liquidity, while a low or undefined ratio suggests potential liquidity issues. The return on equity is calculated as net income divided by stockholders' equity. With net income and shareholders' equity reported as zero, the ROE is also zero, implying no net profit generated from shareholders’ investments. A ROE of zero indicates that the company did not generate profit for its shareholders during the period, which is unfavorable. For Trap Adventures, Inc., these results suggest that the company’s financial condition is neutral or inactive, emphasizing the need for operational improvements to enhance profitability and liquidity.

Operational Evaluation and Common-Size Income Statement Analysis

Based on the income statement data, although zero revenue and expenses are reported, in a typical scenario, a common-size income statement would express each line item as a percentage of total sales. This standardizes data for comparison across periods or competitors. Generally, in restaurant operations, food sales are the largest revenue component, while labor costs or food costs tend to be the largest expenses. The smallest percentage often comes from miscellaneous or administrative expenses. To increase net income, strategies such as reducing food waste, optimizing staff schedules, and enhancing marketing efforts can be employed. Improving menu profitability through price adjustments or introducing high-margin items can also be effective. Additionally, increasing sales volume through promotional offers or enhancing customer service can lead to higher net profits, positively impacting the financial stability and growth prospects of Trap Adventures, Inc.

Impact of a Bank Loan on Financial Statements and Ratios

If Trap Adventures, Inc. decides to acquire a $25,000 bank loan, several changes would occur in its financial statements. The cash account under assets would increase by $25,000, while liabilities would also increase by the same amount due to the new loan, affecting the balance sheet immediately. There would be no immediate impact on the income statement; however, the interest expense on the loan would influence future profitability. The debt-to-equity ratio, calculated as total liabilities divided by shareholders’ equity, would increase, reflecting higher leverage. This ratio signifies how much of the company’s capital structure is financed through debt; a higher ratio suggests greater financial risk but can also amplify returns if managed effectively. Borrowing funds to finance operations can provide short-term liquidity but also introduces long-term obligations, requiring careful management to preserve financial stability.

Conclusion

In summary, the role of accountants in business is vital for maintaining accurate financial records, compliance, and strategic planning. For Trap Adventures, Inc., ratio analysis indicates a neutral or inactive financial stance, highlighting areas for operational improvement. Considering a bank loan can improve short-term liquidity but also introduces increased financial risk, emphasizing the importance of prudent financial management. Overall, sound accounting practices and careful financial planning are crucial for the company's growth and sustainability in a competitive industry.

References

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