a Overview for Milestone Two, which is due in Module Flve, you will create pro forma financial statements, notes to the financial statements, and develop a report for management explaining the impact of proforma financial statements on the company's expansion plans, implications of inventory costing, contingent liabilities, and revenue recognition in your management analysis brief, you will also identify potential issues in interpreting financial statements Prompt: First, review the Final Project Scenario document and the accompanying Final Project Workbook Follow the instructions below and complete the workbook with the information provided in the scenario. Using your review of the scenario, develop a management analysis brief that addresses the critical elements indicated below. Use Information from your accounting workbook to support your claims in the management analysis briet. Note: Milestone Two is a craft of some critical elements of the final project. Note that the management analysis brief informs the management analysis memo in the final project Specifically, the following critical elements must be addressed: 1 Accounting Workbook: Your accounting workbook must include appropriate calculations and statements: A. Create pro forma financial statements for predicting ability to meet future expansion goals. Pro Forma Statements are "what if statements. If the company opens the second location, what will the budgeted income statement and budgeted balance sheets be? Notes to the Financial Statements: You will find an example for how to format these notes located in the module resources. Your notes must contain the following: A. Create appropriate notes as year-to-year documentation for managing depreciation, supplies, and inventory. B. Create appropriate notes for long-term debt Il Management Analysis Brief: Your management analysis brief should explain financial information to management. Provide evidence from your accounting workbook to support your ideas where applicable. A Discuss the impact of the pro forma financial statements for predicting ability to meet future expansion goals. B. Describe the implications of inventory costing, contingent liabilities, and revenue recognition C. Identify potential issues in interpretation of financial information, providing examples to support your ideas. M 0 H PEYTON APPROVED TRIAL BALANCE As of December 31, 2017 ref Usadjusted trial balance Dr Cr 67,520.04 68.519.31 Adjusting entries DI Cr 1,000.00 ref 700.00 3,175.00 15,506.70 1,238.07 200.00 200.00 2,114.55 2,114.55 170.49 14,000.00 2,000.00 1606.44 1,200.00 1,000.00 3,175.00 Cash Accounto Receivable Other Receivable - Insurance Baking Supplies Merchandise Inventory Consignment Inventory Prepaid Rent Prepaid Insurance Misc. Supplies Baking Equipment Accumulated Depreciation Customer Deposit Accounts Payable Wages Payable Interest Payable Notes Payable Common Stock Beginning Retained earning Dividendo Bakery Sales Merchandise Sales Cost of Goods Sold - Baked Cost of Goods Sold - Merchandise Rent Expense Wages Expense Misc. Supplies Expenda Business License Expense Micc. Expense Depreciation Expense Insurance Expence Advertising Expense Interest Expense Telephone Expense Gain/Logs on disposal of equipment 20.262.11 3,383.28 211.46 5,000.00 20,000.00 50,144.84 Adjusted trial balance Dr Cr 68,520.04 68,519.31 T00.00 18,681.70 1,038.07 200.00 2.114.55 2,114,55 170.49 12,000.00 406.44 1,000.00 23,437.11 3,383.28 211.46 5,000.00 20,000.00 50,144.84 105,000.00 327,322.55 1,205.64 105,834.23 859.77 24,549.19 10,670.12 3,000.46 2,045.77 1,363.84 677.86 1,091,08 1,543.74 818.31 490.98 100.00 432,111.32 432,111.32 105,000.00 327,322.55 1,205,64 105,834.29 859.77 24,549.13 10,670.72 3,000.46 2,045.77 1,363.84 677.86 1091.08 1,549.74 818.31 490.98 100.00 6,375.00 423,136.32 429,136.32 6,375.00