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ACC 315 Final Project Scenario

Background
You met Jill, the owner of Peyton Approved Bakery, a couple of years ago when she first started her
business. You recall how much help she needed with starting her business, organizing her financial
transactions, preparing financial statements for potential stakeholders, and making decisions related to
growth and expansion. Jill has now approached you regarding her desire to expand the business. Since
you have kept Peyton’s books since its inception, you are familiar with her business transactions;
however, you realize that for Jill to grow her business, she must transition from her current manual way
of doing business into a more automated mode of operations.

The first step, you believe, is to automate her accounting information system. Although you are familiar
with Jill’s numbers, you have no idea how her day-to-day operations occur. After looking over her
financial transactions, you understand the business activities that Peyton Approved Bakery is primarily
involved in: sales, accounts receivable, purchasing, inventory, and payroll. To get a better feel for how
Jill actually operates the business, you schedule a meeting with her to discuss how these transactions
occur.

Initial Meeting
During the meeting, you ask Jill to tell you more about her goals for the business. She indicates that she
wants to provide quality treats for pets all over the country at a reasonable price. Jill states that since
her business has grown so quickly, she thinks it is time to expand. She’s sure she can sell her products
online and maybe even open another store in a different location, perhaps another state. You ask Jill to
detail her current processes, and she tells you the following:

BUSINESS ENVIRONMENT
I pride myself in making delicious, freshly baked treats for pets of all kinds. We make everything from
cakes and donuts to cookies and candy! We are truly unique. As you know, I hired two part-time
employees to keep up with the orders. One employee, Pierre, bakes most of the items, and the other
employee, Renee, is my “go-to ga”’! She does everything from taking orders, collecting payments,
ordering supplies, and delivering products to keeping up with the inventory. With your help, I was able
to secure a loan from my bank to help really establish the business; I would like to go back to them for
additional financing. My parents also think that I should expand the business and are willing to invest in
the expansion!

SALES CYCLE
A small percentage or our sales are purchased off the shelf; most of our business is special order. We sell
half of our products through phone orders; the rest of our products are sold to customers who walk into
our shop. Besides pastries, we also sell other related merchandise such as pet party accessories, pet
dishware, pet toys and gifts, and so on. Both Renee and I handle the sales that occur in the shop.

When a customer places an order, we write the order by hand. We jot down the customer’s name and
address, phone number, and the details of the order, including:

 The type of pastries

 The quantity of each pastry desired

 The date of the order

 The date the customer wants to pick up the order

We immediately calculate the cost of the order by using a price sheet, and we include the price of the
order on the customer order sheet. If it’s a walk-in order, we give the customer a copy of the customer
order. The financial information from the customer order is then copied to a duplicate sales order form;
one copy goes with the customer order, and the other is placed in a folder of outstanding orders. The
customer order is picked out of the folder by Pierre or me to process.

After we bake the items, we sign the customer order as complete. When the customer receives the
product, a copy of the sales order is given to the customer with a receipt of purchase. If the sale was a
credit sale, Renee creates an invoice by hand and gives it to the customer; the second sales order is
signed as complete and forwarded to you for accounting.

ACCOUNTS RECEIVABLE CYCLE
We do both cash and credit sales; I give the OK to customers who purchase on credit. Since I have
known most of our credit customers for a long time, I don’t have many problems with collecting from
them. We also do cash sales in the shop. Sales that are generated in the shop are cash only; I don’t
extend credit to walk-ins. All credit sales customers receive a copy of the sales order when they pick up
the order with a copy of the invoice. We give customers 15 days to pay the account in full; we do not
give sales discounts for early payment.

We can only receive payments in person in the shop; customers can pay with cash, check, or credit card.
Either Renee or I will collect the payment and issue the customer a receipt of payment. We use a cash
register and credit card reader to record payment. Cash is deposited daily. I review the register tape and
credit card receipts at the end of each day. We staple the receipt of payment to the invoice and send all
invoices to you, paid or unpaid, at the end of the week. Customers that do not pay within 15 days are
sent a reminder letter. We have very few issues with non-payment.

INVENTORY CYCLE
We only bake items after we receive a customer order and sales order. We price our baking inventory by
the job; we charge an overhead fee of 25% of the materials and labor costs. Pastry inventory does not
last long in our shop. We do our best to bake only what is needed, so there is very little waste in our
shop. When we need baking supplies to make our pastries, we simply get what we need from the
inventory room; we don’t fill out a form when we get or use baking supplies. We make a certain amount
of pastries for walk-ins; these pastries cannot stay on our shelves for more than 24 hours. Pastries older
than 24 hours are thrown out.

Renee reviews the merchandise and supply inventory weekly and keeps track of the supplies that need
to be purchased. I sometimes tell Renee what to order; however, she is good with keeping adequate
baking and merchandise supplies on hand. When we need supplies, Renee can just pick up the phone
and place an order for what we need. To speed up the process and keep costs down, Renee picks up the
supplies on a weekly basis. If we run out of something, she may do another pickup during the week.
Merchandise and baking supply inventory is kept in a room in the back, which we all have access to.

ACCOUNTS PAYABLE CYCLE
In the middle of the month, we request an “open” purchase order of baking supplies on account. We
have good relationships with several vendors, so they let us buy our supplies on revolving credit. Since

we don’t have much space to store supplies, our vendors let us keep an “open tab” and pick up items as
needed. Each vendor hands Renee an invoice for the supplies she picks up. We can get a 1% discount if
we pay the invoice in 10 days; otherwise, we have 30 days to pay the bill. Renee pays most of the items
over the phone or on the computer. Our vendors email us receipts of payment. Renee staples the proof
of payment to the vendor invoices. We send all invoices, paid or unpaid, to you at the end of the week.

PAYROLL CYCLE
Renee and Pierre work various hours throughout the week and do not have a set schedule. Neither
punch a time card; however, they write down the number of hours they work each day. I review the
hours they write down at the end of each week to make sure they are reasonable. Since Renee uses her
own car to deliver orders and pick up supplies, I reimburse her for mileage on her car. Renee gives me a
mileage report each week. I use the rates you gave me to calculate the reimbursement for mileage, and
I add the reimbursement to her weekly pay. I pay both Renee and Pierre weekly by company check that I
personally write out and sign. I forward the time sheets, reimbursement calculation, and check register
to you weekly.

“So, that’s the story of my business,” Jill says. You thank Jill for her time and all the information she gave
you. You tell her that you will go through the information and come back to her in a week or two with
thoughts about potential next steps.

After considering Jill’s goals and hearing her processes, you are convinced that you need to do a
thorough analysis of Peyton Approved Bakery to assess the feasibility of an automated AIS, how it would
impact Jill’s current processes, and how it could enhance her ability to reach her goal of expansion.

ACC 315 Milestone One Guidelines and Rubric

Overview: The final project for this course is the creation of a client recommendation that includes flowcharts, diagrams, tables, narrative, and an executive
summary presentation. The final product represents an authentic demonstration of competency because you will analyze a real-world scenario with the goal of
making recommendations for an accounting information system.

In this milestone, you will create a data-flow diagram, a system flowchart, an entity-relation diagram, and a brief paper describing the accounting environment

Prompt: For this project, you will assume the role of a consultant responsible for assessing a client’s business operations and making recommendations for an
accounting information system. To complete this project, review the Final Project Scenario document.

Specifically, you must address the following critical elements:

I. Client Recommendation: Prepare a written recommendation for the automation of a client’s accounting system. Address the following elements in
detail:

a) Describe the current accounting environment and the stakeholders of a business.
b) Map one accounting cycle (sales, accounts receivable, accounts payable, inventory, or payroll) using a data-flow diagram and system flowchart.
c) Use an REA diagram to identify the pertinent resources, events, and agents within the chosen accounting cycle.

Rubric

Guidelines for Submission: The completed milestone should be as a 4- to 5-page document (excluding title and reference pages). Use double-spacing and 12-
point Times New Roman font. Use APA formatting to cite any sources you use.

Critical Elements Proficient (100%) Needs Improvement (70%) Not Evident (0%) Value

Accounting
Environment and

Stakeholders

Accurately describes the accounting
environment and the stakeholders of
a business

Describes the accounting
environment and the stakeholders of
a business, but description contains
inaccuracies or lacks detail

Doesn’t describe the accounting
environment or the stakeholders of a
business

30

Map Accounting Cycle Accurately maps one of the
accounting cycles using a data-flow
diagram and system flowchart

Maps one of the accounting cycles
using a data-flow diagram and
system flowchart, but the mapping
lacks detail or contains inaccuracies

Doesn’t map one of the accounting
cycles using a data-flow diagram and
system flowchart

30

REA Diagram Uses an REA diagram to correctly
identify the pertinent resources,
agents, and entities within the
chosen cycle

Uses an REA diagram to identify the
pertinent elements within the
selected cycle, but diagram contains
inaccuracies

Doesn’t use an REA diagram to
correctly identify the pertinent
resources, agents, and entities within
the chosen cycle

30

Critical Elements Proficient (100%) Needs Improvement (70%) Not Evident (0%) Value

Articulation of
Response

Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization

Submission has major errors related
to citations, grammar, spelling,
syntax, or organization that
negatively impact readability and
articulation of main ideas

Submission has critical errors related
to citations, grammar, spelling,
syntax, or organization that prevent
understanding of ideas

10

Total 100%

  • ACC 315 Milestone One Guidelines and Rubric
    • Rubric