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BUS100 - Assignment 2 - Professor: Kathleen Thompson
Introduction to Business (BUS 100)
Strayer University
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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.
Option 1: Equity. According to Shaun's standards, raising $150,000 from a venture capital firm in exchange for 30% of the business would be the best course of action because it would give the company the money it needs to grow, reduce interest costs, and maintain or boost profit margins. It would also increase the company's credibility by adding a thought partner with knowledge of the discount retail channel. Equity financing does not require repayment, which is beneficial for cash flow needs. Therefore, equity financing is the best choice for Shaun's requirements. I know that A company can raise money through equity financing, a type of financing by selling shares of stock to investors. In return for their investment, the investors get a piece of the business. Because the money raised through equity financing does not need to be repaid and the company can maintain complete control, it benefits business owners. Additionally, if the business is booming, investors might be more inclined to make more significant investments, which can help to attract additional capital in the future.
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?
The accounting cycle consists of several stages an organization goes through during each financial year. This cycle involves given steps,
source documents journals ledger (T-account) trail balance financial statement closing entries Role of junior accountant in the completion of the accounting cycle
- The junior accountant helps the senior accountant and accounts manager through clerical and accounting activities.
- He is involved in assisting the accounts department in summarising accounts and preparing financial statements, budgets, etc.
- Jr. accountant regularly prepares financial activities reports for seniors.
- He helps the organization's auditors conduct internal and external audits and performs many other tasks. In the given situation, the next step to be taken by the junior accountant would be to summarize similar transactions to make them understandable and to arrange them under different categories to make their interpretation easier.
A junior accountant should create a trial balance and a summary of all these transactions. Finally, a senior accountant will draft a financial statement that the organization's stakeholders will review, such as investors, to determine the safety of their investment by the management, the shareholders, the organization's auditors, and banks that provide loans.
QUESTION #3: FINANCIAL STATEMENT
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.
The Balance Sheet is the financial statement the junior accountant should give the investor to display debt-related information. It is divided into three sections: equity, liabilities, and assets. The section of the Balance Sheet that details the company's debt is called Liabilities. There are several categories under Liabilities that can include debt information. "Current Liabilities" is the first category, which consists of all debts that must be repaid within the upcoming 12 months. Accounts Payable, Accrued Expenses, Short-Term Notes Payable, and the Current Portion of Long-Term Debt are a few examples of current liabilities. These categories are all found in the balance sheet and relate to debt due within the next 12 months. "Long-term Liabilities" is the next category, which comprises all debts that must be repaid over a longer time frame. Long-term Notes Payable, Mortgages Payable,
BUS100 - Assignment 2 - Professor: Kathleen Thompson
Course: Introduction to Business (BUS 100)
University: Strayer University
