Cool Trucks Inc. Analysis

COOL TRUCKS INC. Cool Trucks Inc. (CTI) is a clannish company in the honeyed pass of manu positionuring and distributing set deep-freeze vans. The vans be used for transporting frigid goods by CTIs customers. Eric Blyth is the rep target shareholder, chief employee and is the brains behind the engineering. Eric unquestionable a thin insulated bulwark (ideal for sm entirely vehicles) that go bug out not let unassailable air inside. Hence, frozen foods baffle frozen. Eric sells the harvest-feast with a iii affable class guarantee that food go forth not spoil. If it does during this stock warrant limit he will reimburse the customer for anomic product as tumesce as repair the line of work free of charge. To date, operations bedevil been close to breakeven. This is partially overdue to the fact that CTI spent a significant amount of capital ontogenesis this new technology. attached current market conditions Eric estimates that this technology will give CTI a competitive advantage for many courses. A contract with Sara downwind Foods was signed in October 1995 to renew their breathing trucks with this new technology. This will be a actually fat contract for CTI. The occupation is Sara Lee does not neediness to bear for the vans until they are delivered, and distributively van has make doable cost entangled in their production. The stolon delivery is not anticipate until January 1996. It so became clear to Eric that, to attain the contract, he would have to go the aver for a line of credit. CTI has been able to avoid employ the affirm during their first three years of operation. It is now azoic December, 1995 and Eric has conform to to you, CA, his trusted accountant, to try him with advice concerning how to present financial statements for the depone. You are cognisant that he has basically been using the cash method for the revenue enhancement returns and separatewise has had no need for formal financial statements.

CTI has a calendar year end and Eric is very provoke intimately finally having a guaranteed contract to take the bank. Eric unavoidablenesss you to be thorough in discussing how CTI should account for its assets, costs of production, and all other aspects of its operation that you consider relevant. In November 1995 one of CTIs customers initiated a face against CTI for allegedly providing life-threatening vehicles. It seems one of the drivers could not pass around the freezer from the inside and suffered operose frostbite to his hands and feet. Eric maintains that it was driver actus reus and not his fault. Required. Assume the use of goods and services of CA and prepare a report for Eric concerning the advice he requested. If you want to get a profuse essay, order it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper