The Garden Place
3 Pages Posted: 21 Oct 2008
Revised version of UVA-C-0736. This case uses projected transactions for the first day and first year of a start-up business as a basis for preparing journal entries, T-accounts, and projected financial statements. There is sufficient information included to calculate a sales breakdown point. This is a start-up business, so no opportunity is provided to ask what additional information is needed to prepare more realistic statements.
Rev. Aug. 1, 2012
THE GARDEN PLACE
In January 2006, Mary Jane Bowers was reviewing her plans for the April 1 opening of a garden center in Lynchburg, Virginia. She had selected Lynchburg as the town for a new home, after deciding to leave the large, northern city where she and her husband, John, had both worked for the past 10 years. Mary Jane had a degree in horticulture and had worked for a large chemical company in its agricultural-herbicide division. Along with the decision to move, she had decided to change her work status as well. She wanted to devote her working days to something she enjoyed and was passionate about. Thus, she decided to go into business for herself, starting a retail garden store selling plants, trees, and shrubs.
Mary Jane accumulated information on upscale retail garden stores from a number of sources, talked to suppliers, looked at potential locations, and established a banking relationship with the Campbell National Bank. She wanted to make sure she had enough money to get the business off to a good start. Mary Jane had heard stories about many small businesses that failed because they were undercapitalized.
After careful study and analysis, Mary Jane made the following projections for the first year of operations of the Garden Place, Inc.:
. . .
Keywords: accounting methods, financial assessment, start-up
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