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Accounting for the Future Case Competition
Transcript of Accounting for the Future Case Competition
Ali Beyrer Hamilton Southeastern High School Salmon River Inn Limited •1992 by Eileen Timmons and Fred Jones
•Company is $70,000 in debt
•Rooms should operate at 70% capacity in summer
and 40% capacity the rest of the year
•60% sales margin should be earned from restaurant sales Salmon River Inn Limited May 24-26, 2013
Weigh in at Salmon Restaurant Previous Losses... Accounts payable $54,327 including: $10,000 - Bank Overdraft
$94, 485 - Term loan balance $70, 000 is needed to pay debts and maintain operations What's Next... Income Statement Calculations... Marketing Plan Advertise in fishing shops
Print Coupons in newspaper (free appetizer at restaurant )
Run adds in northern American states and parts of Canada Balance Sheet as August 31st, 1992 $28,625 - Contractor
$5,137 - Unremitted payroll deductions
$3,240 - Unpaid Provincial sales Tax Fred Jones (763) 887-4433 $45 per person - 4 max per team 1st annual Spring Fishing Tournament Trophies 1st,2nd,3rd
Individuals and Teams •Fred and Eileen invest $70,000 more into the company to pay off outstanding accounts and bank overdraft
•Since Eileen has invested $75,000 into the company assuming a 50/50 split on the initial $100,000 invested by both, Fred would be taking on $50,000 of the additional $70,000.
•Fred has created a better living for himself with his engineer consulting business, so he has the means to take on more of this extra investment.
•With the extra investment in the company they will not have to split ownership with another investor nor just go into receivership and lose all of their initial investment.
•Once these accounts and the bank overdraft has been paid off income can start flowing easier into the Inn.