Assignment 2: You Are an Entrepreneur!
Due Week 6 and worth 280 points
Student life does not generally afford a great deal of free time to pursue your personal interests; however, at one point, you may have considered turning a personal interest or hobby into an official enterprise. Today, you have finally decided to turn that hobby into a business but have realized that you need start-up capital from a lender or investor.
To obtain funding, you need to convince a lender / investor that your business is more than a hobby. You need to demonstrate that you have a firm grasp of your business, the accounting practices that impact your business, the controls needed to safeguard assets, and which accounting system will produce accurate and relevant financial information.
Write a six to eight (6-8) page business plan in which you:
1. Describe the type of business you have created including:
a. The product or service, and general staffing plan. Provide a rationale for your plan.
b. The form of your business and the benefits it offers your particular business,
c. A chart of accounts specific to your business, including a rationale as to the selection of each account. (Note: The chart of accounts is a blueprint of your business for the lender/investor. It should report the expected resources that you will consume in your business (assets), the sources of those resources (liabilities and equity), the sources of revenue, and expenditures that you expect to incur to earn those revenues. You may build a detailed chart that includes business units, divisions, product lines, etc.)
2. Based on the form of your business, analyze whether or not you will be required to use Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) accounting methods and how the IFRS / GAAP convergence will impact your business. Suggest how you will incorporate any changes into your books and records. (Note: You need to demonstrate to the lender/investor that you have recognized possible changes to GAAP that may impact the accounting and reporting of your accounting events.)
3. Prepare a pro forma balance sheet and income statement providing the assumptions made and support the valuations assigned.
4. Considering the value of assets (assigned per your balance sheet) used within your business, recommend two (2) specific internal controls that you will implement to protect your company’s assets and resources, justifying how each will provide assurances to management. (NOTE: Safeguarding assets and protecting personal data are paramount to ensuring the viability of a business. Demonstrate to the lender/investor that your assets will be safeguarded and customer information (if applicable) will be protected.)
5. Based on the internal control recommendations that you made, suggest how you will implement each within your business environment, indicating how challenges or resistances will be overcome.
6. Evaluate the impact of the regulatory environment, including the Sarbanes-Oxley Act and other regulatory requirements, on your business venture, giving considering to how you intend to comply with the requirements and the general impact to decision making within your business.
7. Use at least four (4) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
You must use EbscoHost and other databases for your reference material.
Don’t use questions as headers.
Please use a couple of direct quotes. Even a block quote would be okay.
Note: A hobby or personal interest of mine is a Restaurant/Bar, Music.
You need to really pay attention to that and the other instructions I already gave you.
The instructor gave us a few pointers as to what she will be looking for.
Need to answer the questions first and foremost.
Assignment two: The following corresponds with each question.
1. Include a name for the business, I will come up with a name if I don’t agree with yours.
Why do you think this is a good business to start.
Are you a LLC, Inc., etc. and why
Why do you need each account you list : look at chart of accounts in the front of the book.
1. If the business falls below the GAAP threshold, include what that threshold is.
2. Pro forma is an estimate and assign dollar figures to 1 c.
3. Include two internal controls
4. What systems would be implemented to back up the internal controls.
5. Go to Sarbanes and jump to 404
Note: Our book is Financial Accounting 8th ed. Weygandt, Kimmel & Kieso
Note: answer the questions in your own words and then use academic research to support.
Only use .govs or .orgs or databases for reference material.
Please let me know if all is okay and you want to do it. Keep in mind it is due Friday 8/8/2014