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Bates Boatyard

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Bates Boatyard

Table of Content

i. Issues Pg 3

ii. Facts Pg 4

iii Analysis Pg 5

iv Conclusions Pg 6

Issues

1. (a) What would you tell Bates concerning her accounting needs?

b) What businesses are being operated in the boatyard?

c) What is the accounting impact of those businesses?

2. Future - What kind if accounting system is needed for the growth of the boatyard?

Facts

• Bates bought the boatyard using her savings and also a private mortgage

• Bates realized the need for and adequate accounting system

• Record on show just cash receipts and disbursements only

• Balance sheets and profit and lost statements had only been prepared for tax purposes

• There were several other business on property, not just boat manufacturing.

• There is a large shed for storage of boats for the winter time

• Large outdoor space for boats storage as well

• Bates also get hired for hauling the boats to storage

• There is a large shed with capacity to built up to 40 boat at a time

• A store located on the property sold marine hardware and supply.

• The wharf is also equipped with a gas pump

• There are no other yacht clubs in down
Analysis

1.(a) Bate needs to put a job order cost system in place so that she can know what her cost for manufacturing a boat is her job order. Once this system is in place she can determine the price point where she can make a profit after paying her debt.
Bates did not have any proper accounting system; Bates only has record for cash disbursement and cash receipts. Bates should use the cost accounting system. This system is suitable for her as she can identify and assign the cost to each department. Bates should implement segmental reporting for each of the department so that she can assess the contribution and profitability of different departments by comparing the revenues and costs that they generate. Based on the segmental...
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