What needs to be done/established?

Course of Business:

Wahoo! Has a premier online search engine for customers browsing the internet. The company makes revenues by selling advertisements on its web pages and key search results.

Forecasted Revenues:

Tomorrow, Wahoo! Will be signing contracts with customers totaling $47,000 that are set to earn the company revenues of $35,000 in fiscal year 2021. On those revenues, the company's expected to earn $12,000 in net income and $13,000 in operating cash flows.

Current Business Outlook:

Wahoo! Operates in a highly competitive industry and so the board of directors' primary focus is on increasing the use base, which can in turn allow the company to charger higher revenues for each advertisement on its websites.

Current Balance Sheet:

Assets	Liabilities
Cash	$10,000	Accounts Payable	$1,000
Accounts Receivable	$1,000	Owners Equity
		Capital Stock	$10,000
Total Assets	$11,000	Total L & OE	$11,000

Strategic Decision #1

1. Asset Purchase - Pay an independent contractor $6,000 to build/update your company's website (The amount billed by the contractor will be classified as an asset.)

The CFO should prepare all journal entries necessary to record the strategic decisions of the business and describe how this transaction impacts the company's Accounting Equation. The CFO should then prepare an adjusted Balance Sheet for the company immediately following the transaction as well as a year over year trend for future revenues and net incomes for the following two years (be sure to include why).

Strategic Decision #2

2. Assume Liability -Take out a $50,000 loan from potential creditor B with $50,000 due in 4 years and $2,000 in interest payments due each year until the loan is fully paid.

The CFO should prepare all journal entries necessary to record the strategic decisions of the business and describe how this transaction impacts the company's Accounting Equation. The CFO should then prepare an adjusted Balance Sheet for the company immediately following the transaction as well as a year over year trend for future revenues and net incomes for the following two years (be sure to include why).

Strategic Decision #3 3. Equity Transaction - sell 25% of business for $40,000 as mentioned in the first decision this would help us pay off our loan and get our company a higher valuation.

The CFO should prepare all journal entries necessary to record the strategic decisions of the business and describe how this transaction impacts the company's Accounting Equation. The CFO should then prepare an adjusted Balance Sheet for the company immediately following the transaction as well as a year over year trend for future revenues and net incomes for the following two years (be sure to include why).