The entire assignment must be submitted in the Assignments section on Blackboard as ONE document.



Assignment #1 – 7.5% of your Final Grade



Submission Requirements

·         The entire assignment must be submitted in the Assignments section on Blackboard as ONE document.

o   Emailed assignments will not be accepted.

·         Late assignments will not be accepted.

·         PDF’s will not be accepted.

·         Solutions must be in MS Word.  Handwritten work will not be accepted.

·         All financial statements must be in chart form (in Word).  Images (jpeg, gif etc. will not be accepted.




You have just been hired as the Marketing Manager for a midsized bicycle and biking apparel company. 


The owners Strider & Candace Wheeler would like to develop a plan to expand into the growing electric bike market, particularly within urban markets like Toronto.


You have been hired by the children to:

1.       Review the current finances of the company.

2.       Analyze how the company has performed over the past few years.

3.       Prepare a cash budget for the new organic line of business.   

4.       Determine if the new line makes any financial sense.


To address this scenario, and to prepare you for your future as a senior member of the team, you will perform the following actions.  For this assignment 1 you are to perform Actions 1-3.




Relevant Resources / Chapters





1.         Review the Company’s accounts.

Week 2 PPT & Handouts

Assignment #1

2.         Create 3 key financial statements.

PPT & Handouts

3.         Analyze the Company’s performance.

Chapter 2 & 3

4.         Evaluate receivable & payment Terms

Chapter 20

Assignment #2

5.         Review cash & operating cycles.

Chapter 18

6.         Create a basic cash budget for the expansion.

Chapter 18

7.         Identify any borrowing / financing requirements.

Chapter 18

8.         Determine the viability of the expansion through a # of methods.

Chapters 5, 6 & 9

Assignment #3

9.         Report your findings to the CEO.











Question #1 – (30 marks)

The last few years the owners (Strider & Candace Wheeler) have not been the best at keeping accurate financial statements, their accountant is as old as they are.


From their disastrous financial records you have gathered the information in the Chart of Accounts below. 


Create the Income Statement and Balance Sheet for both 2018 & 2019. 

·         Use the templates provided for how they should look. 

o   Ensure you include all the accounts (do not just put totals). Example, there should be no Net Fixed Assets etc.

·         Do not create a Statement of Changes of Equity. It is not needed for this assignment.

·         Company’s tax rate is 35%. 

·         Also note that the Retained Earnings are beginning balances, as of January 1st each year. You will have to calculate their ending balances. 


Chart of Accounts

BikesAreBetter Inc.




























 $   1,250,000



 $   1,757,438


Accounts Receivable

 $      950,000



 $   1,021,250


Office Supplies

 $        75,000



 $        78,750


Manufacturing Equipment

 $   4,500,000



 $   4,500,000



 $   1,750,000



 $   1,925,000


Acc. Depreciation Equipment


 $   3,150,000



 $   3,600,000

Accounts Payable


 $      925,000



 $   1,040,625

Interest Payable


 $        93,750



 $        75,000

Income Taxes Payable


 $      387,188



 $      366,713

Long-term Notes Payable


 $   1,250,000



 $   1,000,000

Common Stock


 $   1,500,000



 $   1,500,000

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