ACC 550 - Week 1 Profession Standards and Reporting You...

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Week 1: Profession, Standards, and Reporting - You Decide Print This   Page   Scenario Smackey Dog Foods, Inc - Scenario Summary Smackey Dog Foods, Inc. started in the kitchen of Sarah, Kim, and Jillian’s family home in the suburbs of  Chicago.  The three sisters initially bought the ingredients for their natural dog food recipes from the local  grocery store. They used their dogs and the neighborhood dogs as their taste testers.  Their dog food  products were so good, the local kennels and veterinary offices were glad to distribute  the sisters' products to their customers.   Local demand increased significantly.  Local pet stores and small grocery stores discovered the products  and became distributors.  The sisters moved the expanding business into a larger facility and hired a few  more workers.  While their competitors’ sales were flat or declining, Smackey Dog Food, Inc.’s sales were  on a vertical climb!   Sales were so good last year, that the sisters opened a boutique division named Best Boy Gourmet,  specializing in freshly manufactured, one-serving packages meant for consumption no later than 3 days  after production.  They sell this product at 3 times the cost of their other products and by special order  only through their new website.  Demand is high, but waste has been an issue.  Sarah is the president and general manager of the operation. Sarah has been very proactive in growing  the business. She has met with her banker to discuss expanding the facilities and equipment with another  $150,000 loan.  Their first loan for $150,000 was secured by the industrial size, food production  equipment purchased with the loan. The banker now demands an audit of the corporate financial  statements before releasing another loan to the company.  Sarah has offered to place the corporate  account receivables up as collateral to secure the second loan.  Based on revenue projections by her 
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This note was uploaded on 07/31/2011 for the course ACCT 550 taught by Professor Log during the Spring '11 term at Abu Dhabi University.

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ACC 550 - Week 1 Profession Standards and Reporting You...

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