Kim Fuller Essay Example for Free

Kim chuck-full EssayIn the early fall of 2002, Kim cram full was employed as a district sales engineer for a large chemical firm. During a routine tidings with plant chemists, congested learned that the company had developed a use for the recycled material, in pulverized form, do from fictile soda pop bottles. Because the state had mandatory deposits all beverage bottles. Fuller realized that a ready supply of this material was available. All that was needed was an organization to tap that bottle supply, grind the bottles, and hold the pulverized plastic to the chemical company. It was an opportunity Fuller had long awaiteda chance to excoriation a business. In November 2002 Fuller began checking into the costs involved in setting up a plastic bottle grinding business. A used truck and three trailers were acquired to pick up the empty bottles. Fuller purchased one used grinding machine notwithstanding had to buy a second one juvenileSupplies and pans necessary to run a nd maintain the machines were also purchased.Fuller also purchased a personal computer with the purpose of using it to keep company records. These items used $65,000 of the $75,000 Fuller had saved and invested in the company. A warehouse cost $162,000 was found in an excellent location for the business. Fuller was able to interest family members enough in this labor movement that three of them, two sisters and a brother, invested $30, 000 each. These funds gave Fuller the$50,000 down payment on the warehouse. The bank canonical a mortgage for the sleep on the building. In granting the mortgage, however, the bank 0fficial suggested that Fuller start from the source with fit accounting records. He said these records would help not only with future bank dealings but also with tax returns and general management of the company.He suggested Fuller find a good accountant to provide assistance from the start, to get things going on the right foot. Fullers neighbor, Marion pedestria n, was an accountant with a local firm. When they sit down to talk about the new business, Fuller explained, I k at one time little about belongings proper records. Zimmer suggested Fuller should buy an off-the-shelf accounting system software package from a local office supply retailer. Zimmer promised to help Fuller select and install the package as well as learn how to use it. In order to select the fight package for Fullers needs, Zimmer asked Fuller to list all of the items purchased for the business, a11 of the debts incurred, and the information Fullerwould need to manage the business. Zimmer explained that not al l of this information would be captured by the accounting records and displayed in financial statements.Based on what Fuller told Zimmer, Zimmer promised to create files to accommodate accounting and non-accounting information that Fuller could access through the companys personal computer. As Fullers first lesson in accounting, Zimmer gave Fuller a brief lecture o n the nature of the balance sheet and income statement and suggested Fuller draw up an opening balance sheet for the company. Confident now that the venture was starting on solid ground, Kim Fuller opened the warehouse, signed contracts with two local bottling companies, and employ two grinding machine workers and a truck driver. By February 2003 the new firm was making continual deliveries to Fullers former employer.Questions1. What information will Fuller need to manage the business? Classify this information in two categories accounting information and non-accounting information. 2. See what you can do to draw up a beginning of business list of the assets and 1iabilities of Fullers company making any assumptions you consider useful. How should Fuller go about displace a value on the companys assets? Using your values, what is the companys opening owners equity? 3. Now that Fuller has started to make sales, what information is needed to determine profit and loss? What should be the general construction of a profit and loss analytic thinking for Fullers business? How frequently should Fuller do such all analysis? 4. What other kinds of changes in assets, 1iabilities, and owners claims will need careful recording and reporting if Fuller is to keep in control of the business?