(Solution) BUS 1102 Discussion 1: External Use of Financial Statements

COURSE

BUS 1102 – Basic Accounting

In Chapter 2 of the textbook (pages 90-91), there is a set of financial statements for the hypothetical firm, Cheesy Chuck’s Classic Corn. Suppose you have been approached with an offer to invest in shares of the firm.

  • Based on the accounting information provided, would you invest? Why…or why not? Please explain in detail.

SOLUTION  

Financial statements provide investors with crucial data for company valuation and credit research purposes. For this reason, learning the fundamentals of corporate accounting and the rules that should be followed while constructing a company’s financial statements is essential. An investor’s ability to assess assets, trace a company’s origin, calculate profits, and gauge the risks inherent in a balance sheet is enhanced by familiarity with accounting practices. After carefully considering all I’ve heard about Cheesy Chuck’s Classic Corn, I’ve decided to put money into the firm. …..please click the icon below to purchase the solution at $10