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SOLD Inc In class case.docx

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Ryerson University
ACC 110
Bradley Mc Master

SOLD Inc. Required: Not known. Role: To make recommendations with regards to the preparation of SOLD Inc’s next annual financial statements and to review the statements once they are prepared. Stakeholders: Sonya(Primary Stakeholder), Sonya’s Parents (they hold a notes payable), Bank (critical), Adele Tan Stakeholder Objectives: Sonya to minimize net income. CIBC accurate reporting. Warehouse accurate. *conflict. Facts:  Changes business model.  Private Corporation that is fully owned by Sonya.  Previously owned by parents. Transfer of all common shares to Sonya is to be paid out of the company’s future profits.  The company executed a 5-year lease for the warehouse.  Borrowed 300,000 from CIBC.  Previous lease full amount paid. How to account for it?  Hired friend as a VP of Marketing for a below-market salary and a bonus equal to 5% of the annual growth in revenue. Constraints:  Terms of the loan. Limit loans and dividends.  GAAPS Issues:  Revenue Recognition  Notes Payable for shares Sonya bought from her parents *personal and business transactions separate. Economic entity.  When is the inventory considered ours?  How to respond to restrictions?  Website assets or exp. Who are the stakeholders? Are there any constraints (regulatory or otherwise) on preparing financial information? Why / when do such constraints exist (think common language, common purpose?) Read some of the earlier discussion by students on this Discussion Boar
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