Week 5 Discussion — Earned, Kept, or in the Bank? — Traditional alternative (no AI)
Instructors: publish this instead of the adaptive version if you prefer, and unpublish or delete the adaptive one.
Hook
The bicycle shop (illustrative) finished Month 1 with net income of $1,400, ending Retained Earnings of $900 after a $500 dividend, and $17,100 in Cash. Three numbers, three different questions, and a founder could easily grab the wrong one. This week you prepared the income statement, the statement of retained earnings, and a classified balance sheet, in that order, and closed the books.
Your discussion question — choose Option A or Option B; they carry the same weight and the same rubric, and you say which you picked.
Option A: A founder wants to pay a larger dividend in Month 2 and says, "We have $17,100 in the bank, so we can afford it." Which of the shop's Month 1 figures should the founders look at before deciding, net income, ending Retained Earnings, or Cash, and why? Use net income, the statement of retained earnings, and the difference between what a business earns and the cash it holds.
Option B: A parts supplier is deciding whether to let the shop buy on account. Which group on the shop's classified balance sheet tells that supplier the most, and what could the grouping hide? Use current assets, current liabilities, and at least one specific account, such as Prepaid Insurance or Unearned Revenue, in your answer.
There is no single right answer. The rules are not in question here: the statements are prepared in order, a dividend is a distribution to owners and never an expense, and the shop's balance sheet balances at $32,500. What is open is which figure answers which question, and what each statement leaves out.
Expectations
Activity format: one initial post followed by two substantive peer replies. Plan on about 45 minutes across the two deadlines; your instructor sets both due dates in Canvas.
Working on your own: this version of the discussion is written entirely from your own reasoning, in your own words.
Your initial post — by the first due date (early in the module week):
- Say which option you chose.
- For Option A, say which figure the founders should look at before a larger dividend, net income, ending Retained Earnings, or Cash, and why; for Option B, say which balance sheet group tells a parts supplier the most, and name one thing that grouping could hide.
- Keep the documented rules plain: the statements are prepared in order, net income is not cash, and a dividend is a distribution to owners, never an expense. Use only the shop's figures from Chapter 5, and state no real company's figures.
- Give your judgment, with a reason.
- Length: roughly 150–250 words if written. You may instead record your post as audio or video (about two minutes) and attach a transcript; both forms are scored by the same rubric.
Your replies — by the second due date (the end of the module week):
- Reply substantively to at least two classmates.
- A substantive reply does more than agree: offer the strongest case for the other view, point out a term or figure a classmate misstated, or name a statement line that would test their claim. "Nice point!" on its own does not count.
What a strong post looks like:
I chose Option A and think the founders should look at ending Retained Earnings first, not Cash. The shop has $17,100 in Cash, but most of it came from the founders' own $30,000 investment, which is not revenue. Retained Earnings shows that the shop has earned and kept only $900 so far, after the $500 dividend. The weak spot in my view is that Retained Earnings is not cash either, so I would still check that the bank balance can cover the payment.
Notice how it names specific statement lines and their figures, keeps net income, Retained Earnings, and Cash apart, and admits what its own view leaves open. That is the bar.
Participation rubric
This discussion is worth 10 points. The three criteria below look at your initial post and your peer replies.
| Criterion | Strong | Developing | Missing |
|---|---|---|---|
| Quality of the initial post (4 pts) | A clear position on Option A or B, supported by a specific statement line or account with its figure stated accurately | A position is present, but the support is general, or a figure is misstated | Missing, off-topic, or no position taken |
| Use of course concepts (3 pts) | Uses net income, retained earnings, current assets, or current liabilities precisely, and keeps net income apart from Cash and dividends apart from expenses | Uses a term loosely, or treats net income as cash on hand | No course terms, or used incorrectly |
| Engagement with peers (3 pts) | Two or more substantive replies that extend or challenge a classmate's reasoning | One substantive reply, or replies that only agree | No replies, or "I agree" with nothing added |
Post early if you can — the best threads happen when people have time to reply before the second due date.
Built with The Course Maker · samples.thecoursemaker.com