please provide the answer in your own words. thank u so much...

In the discussion forum, you are expected to participate often and engage in deep levels of discourse. Please post your initial response by Sunday evening and continue to participate throughout the unit. You are required to post an initial response to the question/issue presented in the Forum and then respond to at least 3 of your classmates initial posts. You should also respond to anyone who has responded to you. In Chapter 2 of the textbook (pages 90-91), there is a set of financial statements for the hypothetical firm, Cheesy Chuck's Classic Corn. Suppose you have been approached with an offer to invest in shares of the firm Based on the accounting information provided, would you invest? Why...or why not? Please explain in detail, Your Discussion should be a minimum of 250 words in length and not more than 450 words. Please include a word count. Following the APA standard, use references and in-text citations for the textbook and any other sources, 164 words Financial Statements for a Sample Company Now it is time to bake the cake (i.e., prepare the financial statements). We have all of the ingredients (elements of the financial statements) ready, so let's now return to the financial statements themselves. Let's use as an example a fictitious company named Cheesy Chuck's Classic Com. This company is a small retail store that makes and sells a variety of gourmet popcorn treats. It is an exciting time because the store opened in the current month, June. Assume that as part of your summer job with Cheesy Chuck's, the owner-you guessed it, Chuck - has asked you to take over for a former employee who graduated college and will be taking an accounting job in New York City. In addition to your duties involving making and selling popcorn at Cheesy Chuck's, part of your responsibility will be doing the accounting for the business. The owner, Chuck, heard that you are studying accounting and could really use the help, because he spends most of his time developing new popcom flavors. The former employee has done a nice job of keeping track of the accounting records, so you can focus on your first task of creating the June financial statements, which Chuck is eager to see. Eigure 2.6 shows the financial information (as of June 30) for Cheesy Chuck's CHEESY CHUCK'S CLASSIC CORN Trial Balance For the Month Ended June 30, 2018 Revenues $85,000 Expenses: Popcorn 22,800 1 10:15 PM ment, Statement of Owner's Equity, and Balance Sheet Search this book Q lum CHEESY CHUCK'S CLASSIC CORN Trial Balance For the Month Ended June 30, 2018 Revenues $85,000 Expenses: Popcorn 22,800 Toppings and seasonings 17,300 Employee wages and benefits 10,700 Lease payments 24,000 Utilities 3,200 Advertising 900 Miscellaneous 300 Cash $ 6,200 Equipment $ 12,500 Accounts Payable $ 650 Wages Payable $ 1,200 Investment by Owner $12,500 Drawings by Owner $ (1,450) Figure 2.6 Trial Balance for Cheesy Chuck's Classic Corn. Accountants record and summarize accounting information into accounts, which help to track, summarize, and care accounting information. This table is a verdation of that accountants calia Figure 2.6 Tral Balance for Cheesy Chuck's Classic Com. Accountants record and summarize accounting information into accounts, which help to track, summarize, and prepare accounting information. This table is a variation of what accountants cal atrial balance." A trial balance is a summary of accounts and aids accountants in creating financial statements, (attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) We should note that we are oversimplifying some of the things in this example. First, the amounts in the accounting records were given. We did not explain how the amounts would be derived. This process is explained starting in Analyzing and Recording Transactions. Second, we are ignoring the timing of certain cash flows such as hiring, purchases, and other startup costs. In reality, businesses must invest cash to prepare the store, train employees, and obtain the equipment and inventory necessary to open. These costs will precede the selling of goods and services. In the example to follow, for instance, we use Lease payments of $24,000, which represents lease payments for the building ($20,000) and equipment ($4,000). In practice, when companies lease items, the accountants must determine, based on accounting rules, whether or not the business "owns" the item. If it is determined the business "owns" the building or equipment, the item is listed on the balance sheet at the original cost. Accountants also take into account the building or equipment's value when the item is worn out. The difference in these two values (the original cost and the ending value) will be allocated over a relevant period of time. As an example, assume a business purchased equipment for $18,000 and the equipment will be worth $2,000 after four years, giving an estimated decline in value (due to usage) of $16,000 ($18,000 - $2,000). The business will allocate $4,000 of the equipment cost over each of the four years ($18,000 minus $2,000 over four years). This is called depreciation and is one of the topics that is covered in Long-Term Assets. Also, the Equipment with a value of $12,500 in the financial information provided was purchased at the end of the first accounting period. It is an asset that will be depreciated in the future, but no depreciation expense is allocated in our example. Income Statement Let's prepare the income statement so we can inform how Cheesy Chuck's performed for the month of June (remember, an income statement is for a period of time). Our first step is to determine the value of goods and services that the organization sold or provided for a given period of time. These are the inflows to the business, and because the inflows relate to the primary purpose of the business (making and selling popcorn), we classify those items as Revenues, Sales, or Fees Earned. For this example, we use Revenue. The revenue for Cheesy Chuck's for the month of June is $85,000. Next, we need to show the total expenses for Cheesy Chuck's. Because Cheesy Chuck's tracks different types of expenses, we need to add the amounts to calculate total expenses. If you added correctly, you get total expenses for the month of June of $79,200. The final step to create the income statement is to determine the amount of net income or net loss for Cheesy Chuck's. Since revenues ($85,000) are greater than expenses ($79,200), Cheesy Chuck's has a net income of $5,800 for the month of June. Eigure 2.7 displays the June income statement for Cheesy Chuck's Classic Corn. CHEESY CHUCK'S CLASSIC CORN Income Statement For the Month Ended June 30, 2018 Revenues Expenses: Popcorn $22,800 Tannine anderin $85,000 ent of Owner's Equity, and Balance Sheet Search this book a My highlights CHEESY CHUCK'S CLASSIC CORN Income Statement For the Month Ended June 30, 2018 Revenues $85,000 Expenses: Popcorn $22,800 Toppings and seasonings 17.300 Employee wages and benefits 10,700 Lease payments 24,000 Utilities 3,200 Advertising 900 Miscellaneous 300 Total Expenses $79,200 Net Income $ 5,800 To be used in Statement of Owner's Equity Figure 2.7 Income Statement for Cheesy Chuck's Classic Corn. The income statement for Cheesy Chuck's shows the business had Net Income of $5,800 for the month ended June 30. This amount will be used to prepare the next financial statement, the statement of owner's equity. (attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) cial statements are created using numerous standard conventions or practices. The standa nventions provide consis elp assure financial statement users the information is presented in a similar or regardless of the organization canin Financial statements are created using numerous standard conventions or practices. The standard conventions provide consistency and help assure financial statement users the information is presented in a similar manner, regardless of the organization issuing the financial statement. Let's look at the standard conventions shown in the Cheesy Chuck's income statement: The heading of the income statement includes three lines. The first line lists the business name. The middle line indicates the financial statement that is being presented. The last line indicates the time frame of the financial statement. Do not forget the income statement is for a period of time (the month of June in our example) There are three columns o Going from left to right, the first column is the category heading or account The second column is used when there are numerous accounts in a particular category (Expenses, in our example) The third column is a total column. In this illustration, it is the column where subtotals are listed and net income is determined (subtracting Expenses from Revenues). Subtotals are indicated by a single underline, while totals are indicated by a double underline. Notice the amount of Miscellaneous Expense ($300) is formatted with a single underline to indicate that a subtotal will follow. Similarly, the amount of "Net Income" ($5,800) is formatted with a double underline to indicate that it is the final value/total of the financial statement. There are no gains or losses for Cheesy Chuck's. Gains and losses are not unusual transactions for businesses, but gains and losses may be infrequent for some, especially small businesses. ate the financial statements. It is important to note that financia statements are discussed in the order in which the statements are presented. Elements of the Financial Statements When thinking of the relationship between the elements and the financial statements, we might think of a baking analogy: the elements represent the ingredients, and the financial statements represent the finished product. As with baking a cake (see Figure 2.5), knowing the ingredients (elements, and how each ingredient relates to the final product (financial statements) is vital to the study of accounting. TAIT O BE 9:41 AM 9/4/2020 Chp ts (a) (b) Figure 2.5 Baking requires an understanding of the different ingredients, how the ingredients are used, and how the ingredients will impact the final product (a). It used correctly, the final product will be beautiful and more importantly, delicious, like the cake shown in (b). In a similar manner the study of accounting requires an understanding of how the accounting elements relate to the final product--the financial statements. (credit (a: modification of *U.S. Navy Culinary Specialist Seaman Robert Fritschie mixes cake batter aboard the amphibious command ship USS Blue Ridge (LCC 19) Aug 7, 2013, while underway in the Solomon Sea 130007.N.NN332-044" by MC3 Jarred Harral/Wikimedia Commons Public Domain credit (b): modification of "Easter Cake with Colortu. Topping" by Kaboompics.com/Pexels, CCO) ent, ent of Noncurrent urrent .es, and tement, Equity, and To help accountants prepare and users better understand financial statements, the profession has outlined what is referred to as elements of the financial statements, which are those categones or accounts that accountants use to record transactions and prepare financial statements. There are ten elements of the financial statements, and we have already discussed most of them. Revenue-value of goods and services the organization sold or provided. Expenses-costs of providing the goods or services for which the organization earns revenue. Gains-gains are similar to revenue but relate to "incidental or peripheral activities of the organization Losses-losses are similar to expenses but related to incidental or peripheral activities of the organization, Assets - items the organization owns, controls, or has a claim to Liabilities-amounts the organization owes to others (also called creditors). Equity-the net worth (or net assets) of the organization Investment by owners-cash or other assets provided to the organization in exchange for an ownership interest. Distribution to owners-cash, other assets, or ownership interest (equity) provided to owners. Comprehensive income-defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources" (SFAC NO. 6. p. 21). While further discussion of comprehensive income is reserved for intermediate and advanced studies in accounting, it is worth noting that comprehensive income has 9:41 AM O E Search this book Q My highlights BP - Revenue-value of goods and services the organization sold or provided. - Expenses-costs of providing the goods or services for which the organization earns revenue. Gains-gains are similar to revenue but relate to "incidental or peripheral" activities of the organization. Losses-losses are similar to expenses but related to "incidental or peripheral activities of the organization. Assets-items the organization owns, controls, or has a claim to. Liabilities-amounts the organization owes to others (also called creditors). Equity-the net worth (or net assets) of the organization. Investment by owners-cash or other assets provided to the organization in exchange for an ownership interest. Distribution to owners-cash, other assets, or ownership interest (equity) provided to owners. Comprehensive income-defined as the "change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources" (SFAC No. 6, p. 21). While further discussion of comprehensive income is reserved for intermediate and advanced studies in accounting, it is worth noting that comprehensive income has four components, focusing on activities related to foreign currency, derivatives, investments, and pensions. Financial Statements for a Sample Company Now it is time to bake the cake (i.e., prepare the financial statements). We have all of the ingredients (elements of the financial statements) ready, so let's now return to the financial statements themselves. Let's use as an example a fictitious company named Cheesy Chuck's Classic Corn. This company is a small retail store that makes and sells a variety of gourmet popcorn treats. It is an exciting time because the store opened in the current month, June. Assume that as part of your summer job with Cheesy Chuck's, the owner --you guessed it, Chuck-has asked you to take over for a former employee who graduated college and will be taking an accounting job in New York City. In addition to your duties involving making and selling popcorn at Cheesy Chuck's, part of your responsibility will be doing the accounting for the business. The owner, Chuck, heard that you are studying accounting and could really use the help, because he spends most of his time developing new popcorn flavors. 9:42 AM In the discussion forum, you are expected to participate often and engage in deep levels of discourse. Please post your initial response by Sunday evening and continue to participate throughout the unit. You are required to post an initial response to the question/issue presented in the Forum and then respond to at least 3 of your classmates initial posts. You should also respond to anyone who has responded to you. In Chapter 2 of the textbook (pages 90-91), there is a set of financial statements for the hypothetical firm, Cheesy Chuck's Classic Corn. Suppose you have been approached with an offer to invest in shares of the firm Based on the accounting information provided, would you invest? Why...or why not? Please explain in detail, Your Discussion should be a minimum of 250 words in length and not more than 450 words. Please include a word count. Following the APA standard, use references and in-text citations for the textbook and any other sources, 164 words Financial Statements for a Sample Company Now it is time to bake the cake (i.e., prepare the financial statements). We have all of the ingredients (elements of the financial statements) ready, so let's now return to the financial statements themselves. Let's use as an example a fictitious company named Cheesy Chuck's Classic Com. This company is a small retail store that makes and sells a variety of gourmet popcorn treats. It is an exciting time because the store opened in the current month, June. Assume that as part of your summer job with Cheesy Chuck's, the owner-you guessed it, Chuck - has asked you to take over for a former employee who graduated college and will be taking an accounting job in New York City. In addition to your duties involving making and selling popcorn at Cheesy Chuck's, part of your responsibility will be doing the accounting for the business. The owner, Chuck, heard that you are studying accounting and could really use the help, because he spends most of his time developing new popcom flavors. The former employee has done a nice job of keeping track of the accounting records, so you can focus on your first task of creating the June financial statements, which Chuck is eager to see. Eigure 2.6 shows the financial information (as of June 30) for Cheesy Chuck's CHEESY CHUCK'S CLASSIC CORN Trial Balance For the Month Ended June 30, 2018 Revenues $85,000 Expenses: Popcorn 22,800 1 10:15 PM ment, Statement of Owner's Equity, and Balance Sheet Search this book Q lum CHEESY CHUCK'S CLASSIC CORN Trial Balance For the Month Ended June 30, 2018 Revenues $85,000 Expenses: Popcorn 22,800 Toppings and seasonings 17,300 Employee wages and benefits 10,700 Lease payments 24,000 Utilities 3,200 Advertising 900 Miscellaneous 300 Cash $ 6,200 Equipment $ 12,500 Accounts Payable $ 650 Wages Payable $ 1,200 Investment by Owner $12,500 Drawings by Owner $ (1,450) Figure 2.6 Trial Balance for Cheesy Chuck's Classic Corn. Accountants record and summarize accounting information into accounts, which help to track, summarize, and care accounting information. This table is a verdation of that accountants calia Figure 2.6 Tral Balance for Cheesy Chuck's Classic Com. Accountants record and summarize accounting information into accounts, which help to track, summarize, and prepare accounting information. This table is a variation of what accountants cal atrial balance." A trial balance is a summary of accounts and aids accountants in creating financial statements, (attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) We should note that we are oversimplifying some of the things in this example. First, the amounts in the accounting records were given. We did not explain how the amounts would be derived. This process is explained starting in Analyzing and Recording Transactions. Second, we are ignoring the timing of certain cash flows such as hiring, purchases, and other startup costs. In reality, businesses must invest cash to prepare the store, train employees, and obtain the equipment and inventory necessary to open. These costs will precede the selling of goods and services. In the example to follow, for instance, we use Lease payments of $24,000, which represents lease payments for the building ($20,000) and equipment ($4,000). In practice, when companies lease items, the accountants must determine, based on accounting rules, whether or not the business "owns" the item. If it is determined the business "owns" the building or equipment, the item is listed on the balance sheet at the original cost. Accountants also take into account the building or equipment's value when the item is worn out. The difference in these two values (the original cost and the ending value) will be allocated over a relevant period of time. As an example, assume a business purchased equipment for $18,000 and the equipment will be worth $2,000 after four years, giving an estimated decline in value (due to usage) of $16,000 ($18,000 - $2,000). The business will allocate $4,000 of the equipment cost over each of the four years ($18,000 minus $2,000 over four years). This is called depreciation and is one of the topics that is covered in Long-Term Assets. Also, the Equipment with a value of $12,500 in the financial information provided was purchased at the end of the first accounting period. It is an asset that will be depreciated in the future, but no depreciation expense is allocated in our example. Income Statement Let's prepare the income statement so we can inform how Cheesy Chuck's performed for the month of June (remember, an income statement is for a period of time). Our first step is to determine the value of goods and services that the organization sold or provided for a given period of time. These are the inflows to the business, and because the inflows relate to the primary purpose of the business (making and selling popcorn), we classify those items as Revenues, Sales, or Fees Earned. For this example, we use Revenue. The revenue for Cheesy Chuck's for the month of June is $85,000. Next, we need to show the total expenses for Cheesy Chuck's. Because Cheesy Chuck's tracks different types of expenses, we need to add the amounts to calculate total expenses. If you added correctly, you get total expenses for the month of June of $79,200. The final step to create the income statement is to determine the amount of net income or net loss for Cheesy Chuck's. Since revenues ($85,000) are greater than expenses ($79,200), Cheesy Chuck's has a net income of $5,800 for the month of June. Eigure 2.7 displays the June income statement for Cheesy Chuck's Classic Corn. CHEESY CHUCK'S CLASSIC CORN Income Statement For the Month Ended June 30, 2018 Revenues Expenses: Popcorn $22,800 Tannine anderin $85,000 ent of Owner's Equity, and Balance Sheet Search this book a My highlights CHEESY CHUCK'S CLASSIC CORN Income Statement For the Month Ended June 30, 2018 Revenues $85,000 Expenses: Popcorn $22,800 Toppings and seasonings 17.300 Employee wages and benefits 10,700 Lease payments 24,000 Utilities 3,200 Advertising 900 Miscellaneous 300 Total Expenses $79,200 Net Income $ 5,800 To be used in Statement of Owner's Equity Figure 2.7 Income Statement for Cheesy Chuck's Classic Corn. The income statement for Cheesy Chuck's shows the business had Net Income of $5,800 for the month ended June 30. This amount will be used to prepare the next financial statement, the statement of owner's equity. (attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) cial statements are created using numerous standard conventions or practices. The standa nventions provide consis elp assure financial statement users the information is presented in a similar or regardless of the organization canin Financial statements are created using numerous standard conventions or practices. The standard conventions provide consistency and help assure financial statement users the information is presented in a similar manner, regardless of the organization issuing the financial statement. Let's look at the standard conventions shown in the Cheesy Chuck's income statement: The heading of the income statement includes three lines. The first line lists the business name. The middle line indicates the financial statement that is being presented. The last line indicates the time frame of the financial statement. Do not forget the income statement is for a period of time (the month of June in our example) There are three columns o Going from left to right, the first column is the category heading or account The second column is used when there are numerous accounts in a particular category (Expenses, in our example) The third column is a total column. In this illustration, it is the column where subtotals are listed and net income is determined (subtracting Expenses from Revenues). Subtotals are indicated by a single underline, while totals are indicated by a double underline. Notice the amount of Miscellaneous Expense ($300) is formatted with a single underline to indicate that a subtotal will follow. Similarly, the amount of "Net Income" ($5,800) is formatted with a double underline to indicate that it is the final value/total of the financial statement. There are no gains or losses for Cheesy Chuck's. Gains and losses are not unusual transactions for businesses, but gains and losses may be infrequent for some, especially small businesses. ate the financial statements. It is important to note that financia statements are discussed in the order in which the statements are presented. Elements of the Financial Statements When thinking of the relationship between the elements and the financial statements, we might think of a baking analogy: the elements represent the ingredients, and the financial statements represent the finished product. As with baking a cake (see Figure 2.5), knowing the ingredients (elements, and how each ingredient relates to the final product (financial statements) is vital to the study of accounting. TAIT O BE 9:41 AM 9/4/2020 Chp ts (a) (b) Figure 2.5 Baking requires an understanding of the different ingredients, how the ingredients are used, and how the ingredients will impact the final product (a). It used correctly, the final product will be beautiful and more importantly, delicious, like the cake shown in (b). In a similar manner the study of accounting requires an understanding of how the accounting elements relate to the final product--the financial statements. (credit (a: modification of *U.S. Navy Culinary Specialist Seaman Robert Fritschie mixes cake batter aboard the amphibious command ship USS Blue Ridge (LCC 19) Aug 7, 2013, while underway in the Solomon Sea 130007.N.NN332-044" by MC3 Jarred Harral/Wikimedia Commons Public Domain credit (b): modification of "Easter Cake with Colortu. Topping" by Kaboompics.com/Pexels, CCO) ent, ent of Noncurrent urrent .es, and tement, Equity, and To help accountants prepare and users better understand financial statements, the profession has outlined what is referred to as elements of the financial statements, which are those categones or accounts that accountants use to record transactions and prepare financial statements. There are ten elements of the financial statements, and we have already discussed most of them. Revenue-value of goods and services the organization sold or provided. Expenses-costs of providing the goods or services for which the organization earns revenue. Gains-gains are similar to revenue but relate to "incidental or peripheral activities of the organization Losses-losses are similar to expenses but related to incidental or peripheral activities of the organization, Assets - items the organization owns, controls, or has a claim to Liabilities-amounts the organization owes to others (also called creditors). Equity-the net worth (or net assets) of the organization Investment by owners-cash or other assets provided to the organization in exchange for an ownership interest. Distribution to owners-cash, other assets, or ownership interest (equity) provided to owners. Comprehensive income-defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources" (SFAC NO. 6. p. 21). While further discussion of comprehensive income is reserved for intermediate and advanced studies in accounting, it is worth noting that comprehensive income has 9:41 AM O E Search this book Q My highlights BP - Revenue-value of goods and services the organization sold or provided. - Expenses-costs of providing the goods or services for which the organization earns revenue. Gains-gains are similar to revenue but relate to "incidental or peripheral" activities of the organization. Losses-losses are similar to expenses but related to "incidental or peripheral activities of the organization. Assets-items the organization owns, controls, or has a claim to. Liabilities-amounts the organization owes to others (also called creditors). Equity-the net worth (or net assets) of the organization. Investment by owners-cash or other assets provided to the organization in exchange for an ownership interest. Distribution to owners-cash, other assets, or ownership interest (equity) provided to owners. Comprehensive income-defined as the "change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources" (SFAC No. 6, p. 21). While further discussion of comprehensive income is reserved for intermediate and advanced studies in accounting, it is worth noting that comprehensive income has four components, focusing on activities related to foreign currency, derivatives, investments, and pensions. Financial Statements for a Sample Company Now it is time to bake the cake (i.e., prepare the financial statements). We have all of the ingredients (elements of the financial statements) ready, so let's now return to the financial statements themselves. Let's use as an example a fictitious company named Cheesy Chuck's Classic Corn. This company is a small retail store that makes and sells a variety of gourmet popcorn treats. It is an exciting time because the store opened in the current month, June. Assume that as part of your summer job with Cheesy Chuck's, the owner --you guessed it, Chuck-has asked you to take over for a former employee who graduated college and will be taking an accounting job in New York City. In addition to your duties involving making and selling popcorn at Cheesy Chuck's, part of your responsibility will be doing the accounting for the business. The owner, Chuck, heard that you are studying accounting and could really use the help, because he spends most of his time developing new popcorn flavors. 9:42 AM