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 teamsof Finance and Accounting professionals to help measure and understandthe financial health of the business. Financial and accountinginformation 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 retailsuppliers to use financial and accounting data to make educateddecisions, 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 principlesof accounting to analyze sales information, create financial reports,make recommendations about the financial health of the company, andmore. They are also responsible for training junior accounting staff.

For the last six months, SunsTruck has partnered with the discountretail store to run a pop-up sunglasses stand in their stores for a bigsummer promotion. Due to the high customer purchase rate, the store hasrequested stock for five additional stores. SunsTruck needs to increaseits capacity to meet the additional demand. In order to do so, SunsTruckneeds additional money.

In this assignment, you will need to help determine which type offinancing option is best for your company and train your junioraccountants 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 meetthe new order; and (b) details the criteria Shaun, the owner ofSunsTruck, would like you to consider when choosing one of the threeoptions. Based on this report:

• Identify which financing option you think is the best option forSunsTruck to pursue given Shaun’s constraints. Please explain therationale 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 newfinancing and has come to you with a question about what do next in theaccounting cycle.

• Read the email the junior accountant sent you and identify the bestnext step to take in the accounting cycle. Please explain yourreasoning.

Step 3: Financial Statements

A potential investor has been identified, but before it is willing tocommit, it has requested information about SunsTruck’s current debtfrom the junior accountants.

• Identify the correct financial statement for your junior accountantsthat will provide the investor with the information it has requested.Please explain to your junior accountants why you are giving them thisfinancial statement and where the debt information is located.