Planet Popcorn Memo
To: CEO, Planet Popcorn
From: [Your full name and job title]
Date: 27/10/2023
Subject: Key Financial and Operational Issues for Planet Popcorn
Greetings, I hope you are well. The information in this memo sets out to explain various financial and operational issues identified in the video “Planet Popcorn.” Essentially, the discussion is framed in line with the best accounting practices that are generally acceptable in the modern-day business world. Thus, the case of Planet Popcorn is evaluated based on the best accounting practices that can be adopted to address the current financial and operational issues that the business is facing. Specifically, three issues will be discussed in light of the case of Planet Popcorn. The three include the need for proper cash management, the need to maintain proper accounting records, and the need for auditing financial records.
The case of Planet Popcorn highlights a scenario where no proper cash management is not given priority. The owner takes money from the cash for personal use without any recording. As indicated in the video, a significant amount of profit reaches a tune of $390,000 that is missing. Notably, this points out the lack of better business practices regarding cash management. According to Salas-Molina et al. (2021), the best practice for cash management entails forecasting, mobilizing, and managing cash flow, investing surplus cash, and maintaining banking relations. The functions can be achieved when a business maintains a cash management system that can be used to record all cash transactions and accurately account for them in the books of account. However, this is not the case for Planet Popcorn, as there is no cash management system. It is the reason why the owner of the business can take cash from the cash tills for personal use without anyone questioning. Further, this is why the owner of the business can use the cash for causes that are not related to the business. However, it is important to understand that using business cash in that manner threatens the long-term survival of the business.
Another key concern regarding Planet Popcorn is the lack of proper accounting records. It is highlighted in the video that the company’s balance sheet was not true and realistic as there were forged figures to reflect what the owner wanted. However, this is against the best accounting business practice that requires business entities to maintain proper books of account. Information from the books of account should be true and as accurate as possible because it informs important decisions by various business stakeholders (Putra, 2019). For the case of Planet Popcorn, the recorded balance for cash, which is $390,000, is realized to be understated by about $80,000. Further, the equivalent of that cash in the bank account is missing. It connotes a case of “cooked” books of account that cannot be relied upon.
The last aspect of concern for Planet Popcorn relates to the lack of external audits of business processes. Various faults were identified when an external auditor was requested to review the company’s business activities. An example of such an issue was the untrue recording of financial transactions. As a best business practice, a company’s accounting records and business processes should be audited from time to time, and a report that is true and fair about the business should be given (Venter et al., 2018). Planet Popcorn falls short of this as its books have never been audited. As a result, there is a need to merge the best business practice of auditing business activities for better business performance.
Considering the three issues identified above, it is evident that Planet Popcorn is facing many issues that threaten its long-term existence. The business is facing issues due to paying no attention to best business practices regarding appropriate accounting. There is a deficiency in how cash management is handled; as a result, the business stands a chance of failing to meet its obligations, such as paying staff, suppliers, and bills. There is a case of incomplete and untrue accounting records that require attention. Improper accounting records can result in misleading information. Lastly, there is a case of non-compliance whereby the business is not audited regarding its business process. Notably, this can result in repercussions such as legal cases and fines.
Overall, Planet Popcorn has the potential to excel like other participants in the sector. However, the issues identified above have to be fully addressed. The business must merge the industry’s and accounting best practices. In that light, there is a need for the business to set up a suitable and effective accounting system that will manage all cash flows for the business and highlight all issues regarding cash. Further, the business should adopt a consistent check for its preparation and reporting in the books of account to achieve completeness and accuracy. Essentially, this will assist in pointing out issues and making the necessary corrections. Lastly, there is a need for the business to periodically contact external auditors, such as tax experts and accounting record auditors, to evaluate the compliance of the business regarding notable best practices in the industry.
I appreciate your time and look forward to your reply and thoughts about the identified financial and operational issues.
References
Putra, Y. M. (2019). Analysis of factors affecting the interests of SMEs using accounting applications. Journal of Economics and Business, 2(3).
Salas-Molina, F., Rodriguez-Aguilar, J. A., Pla-Santamaria, D., & García-Bernabeu, A. (2021). On the formal foundations of cash management systems. Operational Research, 21, 1081-1095.
Venter, E. R., Gordon, E. A., & Street, D. L. (2018). The role of accounting and accountancy profession in economic development: A research agenda. Journal of International Financial Management & Accounting, 29(2), 195-218.
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Question 
Planet Popcorn Memo
Please view the video “Planet Popcorn” ( located in the week 1 tab).
Assume you have just graduated with your degree in Accounting and you have been given the job to help restructure this company; identify what you think are the key financial and operational issues and what recommendations you have for addressing them. Your report should be addressed to the Owner/CEO and should be two to three pages.
Please use and identify relevant references.
Guide for “Planet Popcorn” Writing Assignment:
Make sure you understand the topic and the assignment before you begin writing your paper:
1. Assess the topic by analyzing all the relevant issues
2. Once the issues are identified, it is vital to pinpoint cause and effects along with essential weaknesses, implications associated with these weaknesses, and influences of these weaknesses on the business
A. I. Introduction: Special attention should be given to this section of your paper because it provides a concise description of the issues you are addressing as well as your thesis (or purpose) for your paper.
Framing a convincing thesis statement: It is important to include a solid thesis statement to clarify the purpose and point of your writing along with supporting the focus on arguments that are listed in the body of your paper. Also, the thesis statement should also grad the reader’s attention
B. Body: Thorough research should be done to ensure that you can support your recommendations with factual data and information from appropriate sources. One such sources which is often ignore is the information contained in the reading or case itself. Just be sure to cite your sources appropriately.
a. Writing your detailed discussion: It must include all necessary points which are placed in a logical order wherein the issues are backed with solid reasoning moving to the central argument. All the evidence and facts should be related and synched with the main arguments
C. Conclusion: Synthesize, but don’t summarize! In this section, don’t simply restate the issues and your thesis. Instead, show how your thesis or your arguments are tied to the supporting evidence or examples you provided.
**etextbook: Warren, C., & Jones, J. (2020). Corporate Financial Accounting. (16th ed). Cengage.