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Jogging Buddy

$20.00 $15.00

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Description

This report has been prepared to address Alisha Flores’ inquiries on the financial reporting situation at the Jogging Buddy. She seeks to find out whether the figures the bookkeeper provides her with are accurate.  Among her major worries, is whether the advice her bookkeeper is providing is the best there can be and if not, what the other alternatives are. Depending on the feedback given, she also seeks to know whether it is advisable to continue keeping her or to replace her with someone else.

Albeit the two alternatives having both their advantages and shortcomings, it is evident that alternative 2, not using the previous year’s operating expenses is way better compared to the current situation whereby the calculated expected operating expense is different from the actual operating expense. However, the change calls for a more expensive approach but it will give a more comprehensive and clear picture and can even be used to request for funding from banks.  I hereby recommend adoption of the second alternative which also calls for replacement of the current bookkeeper.

Introduction

Investments can be quite a tasking issue especially when the investor is uncertain about the returns the business is able to wreck in. Financial accounts for the investment provide a reflection of the business regarding how well or poorly it is doing. It is in line with this therefore that this proposal as requested by Alisha Flores gives a comprehensive analysis of the current financial reporting situation.  The proposal aims to find out whether the advice being dispensed to Flores by the bookkeeper is the best as well as give other alternatives that can be used. It also aims to evaluate the accuracy of the financial calculations and eventually, provide recommendations on the way forward and in specific, the future off the book keeper.

Background Information

Jogging Buddy is an online based retailer for GPS watches for running exercises.  The watches record distance, heart rate, speed, time among several other health related statistics. The company basically does sell the watches but does not manufacture them.  It purchases them from a manufacturer in China and then sells them at a profit. The company has been in operation for two financial years and has in the two years made some operating incomes and also has seen an increase in the quantity of their sales.

Alternatives

Flores current bookkeeper calculates her expected operating expenses based on the previous financial year’s cost per unit. In her projection calculations for the year 2016, the company expects approximate expenses of 137,500 US dollars but the actual expenses for the year total to 125,000 US dollars. However this is a good figure, Flore has to make a decision on whether to rely on the bookkeeper’s calculation of basing o the previous year’s financial cost per unit or to calculate independently