Professor: Kenneth Lavery Course: BUS 557 Financial Accounting May 19, 2013
ABSTRACT
The paper will describe my business as an Entrepreneur. The business I choose would be run as a sole proprietorship business owned and controlled by one man (myself) even though many other persons will work for me. By choosing to run my business as a sole proprietor I may use a trade name or business name other than my legal name. I will justify the legal form of being a sole proprietor and its advantages over other forms. As an entrepreneur and a sole proprietor, I can declare my business income on my personal income tax form, rather than having to file a separate tax form, (as you would have to do if you chose the corporate form of business ownership). The roles of the executive management team will be to orients staff and oversees their training. In addition, they schedule staff work hours, making sure that peak dining hours are covered. I will address whether or not I will use a board of directors and /or a board of advisors and why. Under develop the rudiments of a financial plan my financial requirements for the venture, will including the amounts needed for cash flow and profitability. A crucial part of any restaurant business plan is to estimate their future restaurant sales. One of my key expenses for my restaurant is food.
As a restaurant owner I will need to determine the quality of food purchased. I will make sure the food is being used efficiently and I would not allow it to expire. I will create a Cost Operating Report. This document serves as a report to summarize income, expenses and inventory, illustrating a restaurant's total profits and losses over a period of time.
Describe the type of business you have created including:
The business I choose is that of a restaurant. It’s name would be Lalia’s Oriental Restaurant it would be run as a sole proprietorship. I would receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. I would be able to chalk out the plan and executes them. My eyes would be on everything and everyone. My plan proposals proposal plan will include approximately 500-square-foot of outdoor patio area with 30 seats, which would bring the total number of seats available at the restaurant to 200. My 82,000-square-foot restaurant will features a 42-seat lounge, an eight-seat sushi bar; an 80-seat dining room and a 78-seat grill room. Unlike typical restaurant I will provide a unique combination of excellent food at value pricing with a fun and entertaining atmosphere One of the most important parts of owning a restaurant, understanding the cash flow, the cash flow is the amount of cash coming in versus the amount of cash going out of your business on a daily, weekly and monthly basis). If you don’t understand this basic concept of restaurant finances, you put yourself at great financial risk. Below is my estimated Monthly Chart of Account: Monthly Chart of Account for Restaurant
Based on the form of your business, analyze whether or not you will be required to use Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) accounting methods and how the IFRS / GAAP convergence will impact your business. Suggest how you will incorporate any changes into your books and records. (Note: You need to demonstrate to the lender/investor that you have recognized possible changes to GAAP that may impact the accounting and reporting of your accounting events.)
Prepare a pro forma balance sheet and income statement providing the assumptions made and support the valuations assigned.
Considering the value of assets (assigned per your balance sheet) used within your business, recommend two (2) specific internal controls that you will implement to protect your company’s assets and resources, justifying how each will provide assurances to management. (NOTE: Safeguarding assets and protecting personal data are paramount to ensuring the viability of a business. Demonstrate to the lender/investor that your assets will be safeguarded and customer information (if applicable) will be protected.)
Based on the internal control recommendations that you made, suggest how you will implement each within your business environment, indicating how challenges or resistances will be overcome.
Evaluate the impact of the regulatory environment, including the Sarbanes-Oxley Act and other regulatory requirements, on your business venture, giving considering to how you intend to comply with the requirements and the general impact to decision making within your business.
