Step 1: FINANCING
The junior accounting team has assembled a Financing Report that (a) offers three options for securing the additional funds required to meet the new order; and (b) details the criteria Shaun, the owner of SunsTruck, would like you to consider when choosing one of the three options. Based on this report:
- Identify which financing option you think is the best option for SunsTruck to pursue given Shaun’s constraints. Underline your selection:
- Option 1: Equity
- Option 2: Debt
- Option 3: Debt + Self-Financing
Explain the rationale for your decision.
Step 2: ACCOUNTING CYCLE
A junior accountant is working to get everything in order for the new financing and has come to you with a question about what do next in the accounting cycle.
- Read the email the junior accountant sent you and identify the best next step to take in the accounting cycle. Explain your reasoning.
Step 3: FINANCIAL STATEMENTS
A potential investor has been identified, but before it is willing to commit, it has requested information about SunsTruck’s current debt from the junior accountants.
- Identify the correct financial statement for your junior accountants that will provide the investor with the information it has requested. Underline your selection:
- Income Statement
- Balance Sheet
- Cash Flow Statement
Explain to your junior accountants why you are giving them this financial statement and where the debt information is located.
Step 4: FINANCIAL ANALYSIS
If you were the type of financier selected in Step 1, would you invest in SunsTruck? Explain the rationale for your decision.
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