Francine Shelly is a business consultant. Her specialties are human resources operations and improving

efficiency. For complex accounting and finance issues, she refers to other consultants who specialize in

financial analysis. Francine has encountered an especially tricky client, Jumbo Playgrounds Ltd$.$ Jumbo$$s

management hired her last week, stressing urgent help on cash flow concerns.

Jumbo Playgrounds is in the business of creating and installing outdoor playgrounds and indoor play

structures for children. Specific elements in each play area can vary, depending on what the customer

prefers, the age group of the children who will play there, and the weather elements of the region $($for

outdoor contracts only$).$ Jumbo$$s goal is to secure lucrative contracts for big projects, but some smaller

jobs are also accepted.

Mike Norton started Jumbo Playgrounds after a very successful career as a hedge fund manager. Despite

having retired at age $45,$ he didn$$t feel great about making millions of dollars by short$-$selling companies.

Also, sitting at home watching TV got boring in a real hurry. Creating an innovative company which built

great playgrounds for kids was an awesome way to give back to society!

Unfortunately, Mike had grown bored again after a couple years working on his new business. He has

been overseas since March, on one of Paul Allen$$s cruise ships with no plans to return to Vancouver

anytime soon. He occasionally answers phone calls, but hasn$$t replied to an email for weeks now.

Mike had declined to hire a Chief Financial Officer from the very start, saying $$What do I need a CFO for?

I$$m a superstar with numbers!$$ Unfortunately, Mike hadn$$t anticipated how dull accounting operations

could be compared to the exciting world of finance he was accustomed to$.$ The accounting functions

quickly took a back seat as he got absorbed in the hustle and bustle of securing new contracts, attending

charity events, and interviewing with local media.

Jumbo$$s accounting clerk, Lisa, had been hired straight out of community college, while still earning her

accounting diploma. She frequently complained about feeling lost and uncertain about the company$$s

accounting policies. Mike reassured her the same way every time$-$ with a quick glance over her work and

a pat on the back. $$Everything looks great$-$ keep up the good work! Don$$t worry about the little things.

Timmy will fix $$em right up when we file taxes!$$

Tim Mahomes had been Jumbo$$s tax accountant last year but dropped the client this year out of

frustration. He complained that the company needed better accounting policy, so that the tax

preparation wasn$$t such a chore each year. Tim has now blocked Jumbo$$s number and his secretary isn$$t

allowing any of Jumbo$$s employees in$.$

Without foreseeable access to Mike or Tim, Francine is forced to heavily rely on Lisa$$s numbers. Francine

first asks for written accounting policies, but Lisa has never seen anything of the sort. Remembering the

company$$s cash flow issue, Francine glances through the most recent bank statement. In the process of

purchasing all the necessary assets, Jumbo has racked up $$3,000,000$ in debt at $6\mathrm{.}50\%$ p$.$a$.($interest is

payable monthly$).$

Francine then requests the full sales data for the company since inception. Lisa cautions that the data

might not be $100\%$ accurate because reading Mike$$s scribbles can be tough, and he usually ignores

follow$-$ups since getting new sales is the bigger priority. The recording process has been much easier

lately, with Mike gone. The sales manager, Jeff, writes neater, more detailed explanations.

Case $3$: Jumbo Playgrounds

Date Amount Customer Description

$2019$

Apr $21$ $$19,500$ McDonald$$s

$($location #$44213)$

Indoor playpen reno; gave $$500$ disc. for paying

upfront

June $14$ $$50,000$ City of Surrey

$($park on $452084$th

Ave$)$

Big outdoor waterpark; $2\%$ disc. for payment by Aug

$31$st

Aug $18$ $$12,000$ Jill Orton

$($her backyard$)$

New tube slide, climber set, swings, rocking horse,

sand box; half$-$pay now

Sept $3$ $$75,000$ Jurassic ventures Dinosaur theme park$-$ lots of toys needed $($price

might go up by the time it$$s finished ~March$).$ For

now, pay $$25$k x $3-2020$ months

Sept $27$ $$4,000$ Judy Sandbox & swings$-$ will pay when she has money

Oct $10$ $$10,000$ Jamie Klassen:

$604-855-9032$

#$425700$ Cherry

Pine St$.$ Chilliwack

Construction of new indoor playpen with a ball pit,

wrestling ring, and shadow wall. Customer will pay

$$5,000$ on Oct $31$ and $$5,000$ on Dec $31.$

Oct $28$ $$800$ Ms$.$ Cramer Repainted old playpen$-$ paid

Nov $15$ $$22,500$ Sacred Heart Co$.$ Outdoor b$-$ball court for hosp. Pay half now and half

later

Nov $28$ $$2,200$ Tasha George:

$778-835-3302$

$41$ Ash St$.$ N$.$Van

Repaired an old swing set by replacing rusty chain

and cracked seats, also refilled sandbox.

$3/15,$ n$/30$ terms

Dec $11$ $$9,000$ Greg Adams New gig for $2020-$ Off for Xmas now

$2020$

Jan $18$ $$3,000$ Judy Built a playhouse$-$ will pay later

Jan $27$ $$40,000$ City of Abbotsford $3$ rock climbing walls in rec c