Assignment 2 Template Business 100namequestion 1 Financingbased O ✓ Solved
Assignment #2 template – Business 100 Name: Question 1: financing Based on your analysis of the owner's wishes (Shaun's criteria) and the three financing options available, which financing option would be the best option? · Option 1: Equity. · Option 2: Debt. · Option 3: Debt and Self Financing. Include your answer in your response below and also explain why you selected that type of financing based on Shaun's criteria and what you know about that financing option. Question #2: accounting cycle So, given what the Junior Accountant has done so far, what is the next step for the Junior Accountant to complete in the Accounting Cycle and why? Question #3: financial statements After reviewing the 3 Financial Statements, please indicate which financial statement (pick one: income statement, balance sheet, or statement of cash flows) the Junior Accountant should provide the investor in order to show the debt information. · Income Statement. · Balance Sheet. · Statement of Cash Flows.
Explain where on that financial statement you would find the debt information. Next step: submit your work 1. Save this completed template to your desktop. · Navigation: Select File at the top, then select Save As > Browse > Desktop , select Save . 2. Log into your class and select Assignment #2 on the left, scroll down and select Submit Your Work , click Browse My Computer , find your file on the desktop, click Open , then click Submit .
3. If you have any issues please email me or call I will provide you assignment feedback and you can then make any changes you would like and resubmit for grading. Congrats on completing Assignment #2! Safwan M. Alhawsawi 151 ****** St.
Clinton, MS 39056. ******1822. *****@outlook.com EDUCATION Yanbu College of Applied Technology Yanbu, SA Electrical Technology Jan 2012 - Mar 2015 GPA: 4.22/5.0 Mississippi College Intensive English Program Clinton, MS Jan 2018 – May 2019 Mississippi College Clinton, MS Bachelor of Physics Aug 2019 – May 2021 University of Southern California Los Angeles, CA Bachelor of Electrical and Computer Engineering Aug 2021- EXPERIENCE Hesco Company limited Insulated Roofs & Walls Industrial Jeddah, SA Technician Mar 2015 – Aug 2015 Malak Shop Electronic Devices Mecca, SA Sales Associate Jun 2016 – Nov 2016 Mississippi College Office of Global Education Clinton, MS Customer Service Representative May 2019 – Aug 2019 ACTIVITIES · I joined summer camp Service Learning at Mississippi College. · Homecoming, and Celebration of Culture volunteer Host at Mississippi College. · Ministry of Hajj and Umrah volunteer Security Guard in Mecca city. · Weightlifting, Soccer, Volleyball, and Video Game.
SKILS · I have CPR and AED Skills card. · I have had an experience PC gaming hardware. · Bilingual - English, and Arabic. Assignment #2 INSTRUCTIONS – Business 100 Make sure that you have also downloaded the Assignment #2 Template. You will answer the questions there and submit that file as your assignment. qUESTION 1: financing Background Information Needed to Answer Question #1: Review Shaun's criteria below to determine the best financing option to expand his business. 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.
1. I estimate we’ll need 0,000 to increase capacity in order to stock the five additional pop-up stands. 2. We’ll need to make sure we have additional funds available to increase our marketing efforts to stimulate demand. 3.
Cash flow is going to be tight, so I’d like to minimize interest payments . 4. I’d like to maintain or increase our profit margins. 5. 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.
6. 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 . 7. We need to move on this quickly, so I’d like an answer by the end of the week. -Shaun FINANCING OPTIONS As we have learned, there are pros and cons to all financing methods. Which of the three financing methods would be the best fit based on Shaun's criteria above?
Option 1: Equity Raise 0,000 from a venture capital firm in exchange for 30% of the company. Option 2: Debt Secure a loan of 0,000 at a 10% annual interest rate, to be repaid over 7 years. Option 3: Debt + Self-Financing Secure a loan of 0,000 at a 7% annual interest rate, to be repaid over 7 years, and self-finance the remaining ,000. Go to the Assignment #2 Template and complete Question 1. QUESTION 2: accounting cycle Background information needed to answer Question #2: A junior accountant is working to get everything in order for the new financing and has come to you with a question about what to do next in the accounting cycle.
Read this email from the junior accountant so you can determine what steps of the accounting cycle she has already completed and what the next step is to complete. As a refresher, here are the 5 Steps to the Accounting Cycle: Go to the Assignment #2 Template and complete Question 2. QUESTION 3: FINANCIAL STATEMENTS Background information needed to answer Question #3: A potential investor has been identified, but before they are willing to commit, they have requested information about SunsTruck’s current debt from the junior accountants. You have been charged with reviewing the financial statements (found in the resources) and providing direction to the junior accountant to comply with the request from the potential investor.
Identify the correct financial statement for your junior accountants that will provide the investor with the information it has requested. As a refresher, here are the types of financial statements. Go to the Assignment #2 Template and complete Question 3. Next step: submit your work 1. Save your completed template (not these instructions) to your desktop. · Navigation: Select File at the top, then select Save As > Browse > Desktop , select Save .
2. Log into your class and select Assignment #2 on the left, scroll down and select Submit Your Work , click Browse My Computer , find your file on the desktop, click Open , then click Submit . 3. If you have any issues please email me or call. I will provide you assignment feedback and you can then make any changes you would like and resubmit for grading.
Congrats on completing assignment #2! Assignment #2 Instructions Page of
Paper for above instructions
Name: Safwan Alhawsawi
Question 1: Financing
Based on Shaun's criteria for financing the expansion of his business, I recommend Option 3: Debt and Self-Financing, which secures a loan of 0,000 at a 7% interest rate and self-finances the remaining ,000. This option aligns with several of Shaun's preferences for financing.
Shaun indicates the need for 0,000 to increase capacity for five additional pop-up stands (Shaun's Criteria, n.d.). By selecting a combination of debt and self-financing, Shaun can minimize his interest payments, as the interest rate is lower (7%) than the 10% available in Option 2. This will give him better control over the monthly cash outflow, essential for maintaining business stability, considering his concern about cash flow being tight. Furthermore, self-financing ,000 will allow him to keep a larger equity stake in the business while still enabling him to secure the necessary funds quickly.
In terms of maintaining profit margins, this hybrid option minimizes the impact of high-interest debt on net income, ensuring that Shaun's profitability doesn't decline significantly (Brealey, Myers, & Allen, 2017). Additionally, the option of self-financing can enhance credibility, providing a sense of ownership and commitment to the investors (Modigliani & Miller, 1958). Lastly, by avoiding relinquishing 30% of equity to a venture capital firm, Shaun retains more control over his business operations and strategy, crucial given his limited experience with big discount retailers (Berk & DeMarzo, 2019).
Therefore, Option 3 is the balanced approach that best fits Shaun's financing needs by considering his criteria and the characteristics of the financing options involved.
Question 2: Accounting Cycle
The next step in the accounting cycle for the Junior Accountant to complete is the preparation of the trial balance. This is an essential part of the accounting cycle, as it helps confirm that the total debits equal total credits after all journal entries have been made. After preparing the trial balance, the accountant can then move on to the next steps of the accounting cycle, where adjustments are made to account balances to prepare them for the financial statements (Kimmel, Weygandt, & Kieso, 2019).
Given that a Junior Accountant has already started compiling financial information, gathering data for the trial balance allows for the identification of errors that may still exist in the posted entries. This step is crucial in maintaining accuracy within the accounting records—a priority in any financial application (Sharma, 2015). The trial balance not only serves as a check but also assists in providing a structured view of the company’s financial position at a glance.
Question 3: Financial Statements
For a potential investor requesting information on current debt, the Junior Accountant should provide the Balance Sheet. The Balance Sheet is particularly useful because it reflects the total liabilities, including any debts the company holds, as well as the company’s equity position. The Balance Sheet captures a snapshot of a company's financial status at a moment in time, detailing what it owns and owes (Horngren, Sundem, & Stratton, 2013).
On the Balance Sheet, debt information is typically found under the liabilities section, segregated into current liabilities (those expected to be settled within one year) and long-term liabilities (debts that will take more than one year to pay off) (Schroeder, Clark, & Cathey, 2019). By providing this specific financial statement, the investor will gain a comprehensive overview of the company's debt levels, allowing them to assess not only the size of the debt but also the company's overall solvency.
The clarity provided in the Balance Sheet about debts will empower the investor to make an informed decision regarding their potential investment in Shaun's business, making it the most appropriate financial statement for this request.
References
1. Berk, J., & DeMarzo, P. (2019). Corporate Finance (4th ed.). Pearson.
2. Brealey, R. A., Myers, S. C., & Allen, F. (2017). Principles of Corporate Finance (12th ed.). McGraw-Hill.
3. Horngren, C. T., Sundem, G. L., & Stratton, W. O. (2013). Introduction to Financial Accounting (10th ed.). Pearson.
4. Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2019). Financial Accounting (8th ed.). Wiley.
5. Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance, and the theory of investment. The American Economic Review, 48(3), 261-297.
6. Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2019). Financial Accounting Theory and Analysis: Text and Cases (12th ed.). Wiley.
7. Sharma, R. (2015). Accounting Cycle and its Implications: An Overview. The International Journal of Business and Management, 3(4), 234-245.
8. Wild, J. J., Shaw, K. W., & Chiapetta, B. (2020). Fundamentals of Financial Accounting (7th ed.). McGraw-Hill.
9. Weetman, P. (2016). Financial and Management Accounting (7th ed.). Pearson.
10. Lewis, J. M. (2018). Starter Guide to Accounting. CreateSpace Independent Publishing Platform.
This structured analysis of Shaun's situation, along with a focus on the accounting cycle and recommended financial statements, provides a comprehensive approach to making sound financial decisions in the business context.