MGMT 210 Financial AccountingBluJay Aviation, Episode 6
Scene
Gift shop at the airport with lots of T-shirts.
Introduction
It is now three years since the start of the business. The company has been profitable and
successful. Wren is now working full-time for BluJay Aviation and is taking a salary. Brad is still
at the FBO and flying for BluJay. They are now discussing a new opportunity for growth.
Wren: The airport manager has been talking to me about taking over the operating of this gift
shop since I’m no longer working as her assistant.
Brad: What does she want us to do?
Wren: Take over the lease from the previous company.
Brad: There sure is a lot of stuff in this store, but I’m not sure we want to get into the retail
business. I know nothing about buying and selling inventory.
Wren: The manager did say she would work with us on the lease arrangements.
Brad: What comes with the deal?
Wren: We would get everything in the store, mainly the fixtures, supplies, and inventory. We
wouldn’t have to pay the previous company anything for the inventory because it is on credit
and hasn’t been paid. We would have to pay the creditors.
Brad: You know, I think it’s time that we called in some help. Let’s see if we can find some
business consultants who can sort this out. Since I’m working two places and you are handling
most of the work for BluJay, an outside look at our situation would be good.
Wren: Not a bad idea. I have the most recent financial statements from the gift shop so I can
provide them to the consultants.
Brad: Maybe we can also use them to look at some of our other operating activities and make a
few suggestions there.
BluJay Aviation, Episode 6
MGMT 210 Financial Accounting
BluJay Aviation, Episode 6
Scene
Gift shop at the airport with lots of T-shirts.
Introduction
It is now three years since the start of the business. The company has been profitable and
successful. Wren is now working full-time for BluJay Aviation and is taking a salary. Brad is still
at the FBO and flying for BluJay. They are now discussing a new opportunity for growth.
Wren: The airport manager has been talking to me about taking over the operating of this gift
shop since I’m no longer working as her assistant.
Brad: What does she want us to do?
Wren: Take over the lease from the previous company.
Brad: There sure is a lot of stuff in this store, but I’m not sure we want to get into the retail
business. I know nothing about buying and selling inventory.
Wren: The manager did say she would work with us on the lease arrangements.
Brad: What comes with the deal?
Wren: We would get everything in the store, mainly the fixtures, supplies, and inventory. We
wouldn’t have to pay the previous company anything for the inventory because it is on credit
and hasn’t been paid. We would have to pay the creditors.
Brad: You know, I think it’s time that we called in some help. Let’s see if we can find some
business consultants who can sort this out. Since I’m working two places and you are handling
most of the work for BluJay, an outside look at our situation would be good.
Wren: Not a bad idea. I have the most recent financial statements from the gift shop so I can
provide them to the consultants.
Brad: Maybe we can also use them to look at some of our other operating activities and make a
few suggestions there.
BluJay Aviation, Episode 6
MGMT 210 Financial Accounting
BluJay Aviation, Episode 7
Scene
Wren and Brad discuss their cash position and customer collections at Eagle One’s FBO office.
Brad: I just don’t understand why we’re always short of cash even though we generate a profit.
I would really like the new business consultant group to explain that to me.
Wren: Part of the problem is collecting the cash from our clients.
Brad: I think our clients are steady and some have been with us since we started business and
seem to be happy with our services.
Wren: Up till now they have paid their bills, but often it is what I call “slow pay.” Usually late
based on our policy of 30 days after we provide the service.
Brad: I’m a bit worried about the realtors. Business is very slow and the housing market is still
in the dumps around here.
Wren: You know the marketplace a lot better than I do. Do you think some of them will not pay
us for work we’ve already done?
Brad: I certainly hope not, but maybe we should start thinking that’s possible.
Wren: Any ideas about speeding up the payments? Or maybe we should change our billing
policy. I really liked it when we were able to get them to pay ahead of time.
Brad: Let’s call up our consultants and ask them to look into this too.
Wren: Great idea. Did we find out what they’re charging? I hope it’s not an arm and a leg. If
so, I’m giving them yours.
BluJay Aviation, Episode 7
MGMT 210 Financial Accounting
BluJay Aviation, Episode 8
Scene
Brad’s office at BluJay’s Office.
Brad: You know, some of this accounting stuff is getting interesting. I’ve been reading a lot
about depreciation.
Wren: Well, that’s a good sign.
Brad: I think we can improve our bottom line by changing the life of the aircraft. When we
bought it three years ago, we decided to give it a life of 15 years, but that’s just an estimate.
Wren: We did some research and based on the fact that it was a used aircraft and based on
how long we thought it would be useful to our company. In my opinion, it was a good estimate.
Brad: Yeah, but just by changing our minds and extending the life to 20 years, our profit will
look better or we could even do 25 years. These planes are real workhorses and go on and on
and on. Kind of like that bunny in the commercials.
Wren: I’m not sure messing around with the financial statements and just changing numbers is
going to do us any good.
Brad: Come on, a little creative accounting never hurt anyone, right?
Wren: Let’s run this one by the business consultants also. I’m starting to think doing the
accounting is too much and we may need to get someone with more knowledge than I have.
Maybe they could recommend someone.
BluJay Aviation, Episode 8
MGMT 210 Financial Accounting
BluJay Aviation, Episode 9
Scene
Outside looking at the helicopter.
Introduction
Brad is now licensed to fly helicopters and is anxious to put his new skill to work. The owners
discuss another growth opportunity.
Wren: What do you think about this? I know you were successful last month in getting certified
to fly this helicopter.
Brad: It’s a really nice helo, even though it’s used. It’ll carry three passengers as well as the
pilot. Our city is just amazing from the air. Giving rides to locals and tourists would be great.
We could also take better pictures for the realtors.
Wren: The company that owns this is really underwater with debt and wants to unload it. We
might be able to get it at a real bargain, sort of a “fire” sale.
Brad: I have no idea as to how we could buy it. I know I’m not able to raise any more money,
how about you?
Wren: Getting our business up and running has me tapped out.
Brad: Where do we go to get funds for a business? Will banks look at us as though we’re crazy
if we approach them about expanding with helicopter service?
Wren: Do you know any bankers? Any that use the FBO maybe?
Brad: We could think about finding another investor and sharing some of the ownership. A few
people I have contacts with have mentioned it, but who knows how serious they are when it
comes right down to putting up the money.
Wren: It might be hard to have a third or fourth owner.
Brad: This is a nice ship. My friend, Rick, says we could probably get this Raven R44 for about
$148,000, and the name fits right in with BluJay, don’t you think? I can see myself in it being a
tour guide.
Wren: Our consultants should be able to help us figure out if this is plausible and how to
finance it. Let’s get their feedback about it first.
BluJay Aviation, Episode 9
Individual Activity Report
For this assignment, you will turn in your Letter/Report to BluJay Aviation, Inc. Include your company name
in the letter/report.
The letter/report should be submitted to BluJay Aviation, Inc., from your consulting business. Be sure to
include a bill for your services. Make it appropriate for the amount of work. The letter/report should be
approximately 2-4 pages, again editing and rewriting normally improves work. The format should be a typical
business letter/report style.
Remember as a business consultant, your company needs to make recommendations for Episodes 6, 7, 8, and
9 and be backed up with data, making any reasonable assumptions your company deems necessary. Refer
back to the instructions in Module 5.2 and grading rubric before submitting your letter/report.
Save and submit your assignment using a naming convention that includes your first and last name and the
activity number (or description). Do not add punctuation or special characters.
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Individual Activity Report
For this assignment, you will turn in your Letter/Report to BluJay Aviation, Inc. Include your company name
in the letter/report.
The letter/report should be submitted to BluJay Aviation, Inc., from your consulting business. Be sure to
include a bill for your services. Make it appropriate for the amount of work. The letter/report should be
approximately 2-4 pages, again editing and rewriting normally improves work. The format should be a typical
business letter/report style.
Remember as a business consultant, your company needs to make recommendations for Episodes 6, 7, 8, and
9 and be backed up with data, making any reasonable assumptions your company deems necessary. Refer
back to the instructions in Module 5.2 and grading rubric before submitting your letter/report.
Save and submit your assignment using a naming convention that includes your first and last name and the
activity number (or description). Do not add punctuation or special characters.
hotos – Module 5.2 instructions.PNG
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In Module 9, you will submit a business letter/report to BluJay Aviation, Inc. In this activity, you will be a business consultant to BluJay Aviation, Inc.,
the fictional company used in the first half of the course. Ongoing throughout the second half of the course, you will be hired by BluJay to advise them
on some current operating activity issues and potential investing activities for growth opportunities. Your letter/report will outline your analyses and
recommendations. This activity will apply concepts and techniques learned in the course.
During each module, for the remaining of the course, it will be useful to continue to draft what you are going to put in the final letter/report to BluJay
that is due in Module 9. You will find it very helpful to have a working draft as you progress through the course. Reminders will be provided along the
way. Remember, the best writing is done, edited, and redone. There will be one episode for Modules 5, 6, 8, and 9 (BluJay Aviation Episodes 6-9).
Your final Letter/Report is due in Module 9
The letter/report should be submitted to BluJay Aviation, Inc. from your consulting business. Be sure to include a bill for your services; make it
appropriate for the amount of work. The letter/report should be approximately 2-4 pages, again editing and rewriting normally improves work. The
format should be a typical business letter/report style.
Remember, as a business consultant you need to make recommendations for each episode and back up your recommendations with data. You may
also make any reasonable assumptions that may be needed.
Directions
This week, choose a name for your consulting business.