This week, you’ll assume the role of Senior Accountant with SunsTruck Sunglasses.
For the last six months, SunsTruck has partnered with the discount retail store to run a pop-up sunglasses stand in their stores for a big summer promotion. Due to the high customer purchase rate, the store has requested stock for five additional stores. SunsTruck needs to increase its capacity to meet the additional demand. In order to do so, SunsTruck needs additional money.
In this assignment, you will need to help determine which type of financing option is best for your company and train your junior accountants on the accounting cycle and financial statements.
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 options. Based on this report:
- Identify which financing option you think is the best option for SunsTruck to pursue given Shaun’s constraints. Explain the rationale for your decision.
- Equity Financing
- Debt Financing
- Self-financing (or internal-financing)
The following link will allow you to watch video for this assignment: