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Student Introduction to Studio Live Accounting

Page history last edited by Lynda_Cannedy 13 years, 10 months ago

One thing that all successful businesses have in common is a good system of accounting. 

All businesses need accurate measurements of income and expenses

as well as reliable numerical data showing what the business is worth at any particular point in time.


Watch this clip about one of your favorite places to eat, Chik-Fil-A, and hear what the founder, S. Truett Cathy, has to say.

 

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Now take a look at this article about the success of Chik-Fil-A. 

QSRWeb Chik-fil-A Flying High

How many consecutive yearly sales increases has the company had since 1967?

How did they determine those numbers? 

What does it mean for a company to go "public"?  


Over the next few months, you will see what is like to be an accountant for an accounting firm called Rider & Co.

You will be deciding how several businesses should be organized including Rider & Co.

You will also be working with your classmates to set up an accounting system for our client, Studio Live. 

 

Studio Live is a small business recently started by Bella Martin, a college student.  Bella is renting studio space for $500 per month and charging customers $50 per hour to rent the recording studio.  She wants to purchase some more equipment to record with but the bank requires financial statements from her before they will process her loan application.  She has set up a separate bank account for her business but has no accounting system in place.

She has come to us for help.


We will need to determine what type of business organization she needs, set up an accounting system for her, and complete the accounting cycle for her so we can produce the financial statements she will need.  We will present the financial information using power points to some local CPAs for feedback.  You will need to be able to justify your numbers. We will then work with some local bankers to help her apply for the loan and see if it would meet approval. We will also be looking at interest rates and the economics of what determines the going rate of interest paid on a loan.


I am looking forward to working with you as you work with each other to solve this problem.

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