Training Case : A Good Reputation Of Customized Boats

864 Words Sep 19th, 2016 4 Pages
Training Case #1
Bronwyn Boats Limited engaged in the yacht-building business for years and has earned a good reputation of customized boats. In the case circumstances, I was hired as a company accountant to prepare the annual finical report by Bob, who is the company owner and my friend. Whether as an employee or a friend, I should find a suitable way to help him. In addition, the annual statement will be used not only as a financial summary for Bob, but also as a reference of business loan for bank. So, my responsibility is to measure the revenue and cost without biases.
In this case, Bob have promised an ASPE formwork. So, the statement should be constrained by the recommendation of ASPE. The key fact in this circumstance is the debt to equity ratio. Bob wants a better financial situation on statement so that the bank will provide him the fund he needs. Meanwhile, bank needs a credible statement to make sure their investment. I need to keep my professional reputation and the bank’s reliance.
The reason for Bob to looking for a business loan is because he stripped all the excess cash for his dream cottage. In addition, he agreed to pledge his cottage as security. The money demand is because of business development requirement. Therefore, the liabilities of the company should be healthy.
D/E is a debt ratio used to explain how much asset in the company is under liabilities. It depends on the whole company’s financial situation.
Bob never had any…
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