Milestone One Workbook Instructions Revised Peyton Approved Statement of Cash Flow for Year Ended 12/31/2017 prepare the company's financials for the year-end audit. Additionally, the company is interested in expanding its business within the next year. They would like your support in assessing their ability to meet their goals. Refer to the data below and use the Final Project Workbook that includes the income statement, balance sheet, retained earnings statement, and cash flow statement to complete the final project and associated milestones. Peyton Approved Financial Data: Preliminary financial statements have already been prepared (2017 statements in the Final Project Workbook). Final adjusting entries have not yet been made. See table for possible adjustments that indicate what will be recorded at 12/31/17 (fiscal year end). Use the following to complete year-to-year documentation and notes for managing depreciation, inventory, and long-term debt: 1. A supplier shipped $3,000 of ingredients on 12/29/17. Peyton receives an invoice for $3,175 goods of $3,000 and freight of $175 all dated 12/29/17. Goods were shipped FOB supplier's warehouse. 2. At 12/31/17, Peyton has $200 worth of merchandise on consignment at Bruno's House of Bacon. 3. On 12/23/17, Peyton received $1,000 deposit from Pet Globe for product to be shipped by Peyton in the second week of January. 4. On 12/03/2017, a mixer with a cost of $2,000, accumulated depreciation $1,200, was destroyed by a forklift. As of 12/23/17, insurance company has agreed to pay $700 in January, 2018 , for accidental destruction. The company uses the following common ratios: Current Ratio Current Assets/Current Liabilities Quick Ratio Liquid Assets (cash, accounts receivable, marketable securities)/Current Liabilities Account Receivable Turnover Total Revenue/Average Accounts Receivable Inventory Turnover Total Cost of Goods Sold/Average Inventory Gross Margin Gross Profit/Total Revenue Return on Sales Net Income/Total Sales Return on Equity Net Income/Total Equity Return of Assets Net Income/Total Assets Peyton Approved uses the following accounting practices: - Inventory: Periodic, LIFO for both baking and merchandise - Equipment: Straight line method used for equipment Business financing information: Use this information to calculate interest rates and insurance information and to assess their impact on the company's financial obligations: - The 5-year loan was made on June 1, 2016. Terms are 7.5\% annual rate, interest only until due date. - Insurance: Annual policy covers 12 months, purchased in February, covering March 2017 to February 2018. No monthly adjustments have been made. TRIAL BALANCE As of Decembel 31, 2017 Cash Accounts 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 earnings Dividends Bakery Sales Merchandise Sales Cost of Goods Sold - Baked Cost of Goods Sold - Merchandise Rent Expense Wages Expense Misc. Supplies Expense Business License Expense Misc. Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense Gain/Loss on disposal of equipment Unadjusted trial balance Dr 67,520.04 68,519.91 15,506.70 1,238.07 2,114.55 Cr 2,114.55 170.49 14,000.00 1,606.44 20,262.11 3,383.28 211.46 5,000.00 20,000.00 50,144.84 Adjusting entries ref Dr 1,000.00 700.00 3,175.00 200.00 327,322.55 1,205.64 105,834.29 859.77 24,549.19 10,670.72 3,000.46 2,045.77 1,363.84 677.86 1,091.08 1,549.74 818.31 490.98 429,136.32 Cr ref Adjusted trial balance Dr 68,520.04 68,519.91 700.00 15,506.70 4,413.07 200.00 2,114.55 2,114.55 170.49 12,000.00 2,000.00 1,000.00 3,175.00 Cr 1,200.00 105,000.00 406.44 1,000.00 23,437.11 3,383.28 211.46 5,000.00 20,000.00 50,144.84 105,000.00 327,322.55 105,834.29 200.00 659.77 24,549.19 10,670.72 3,000.46 2,045.77 1,363.84 677.86 1,091.08 1,549.74 818.31 490.98 100.00 429,136.32 \begin{tabular}{|l|l|} \hline 6,375.00 & 6,375.00 \\ \hline \end{tabular} 432,011.32 432,111.32 432,111.32 10 Peyton Approved Statement of Retained Earnings for Year Ended 12/31/2017 Beginning Balance: plus Net Income less Dividends: Ending Balance $50,144.84 175,576.18 105,000.00 $120,721.02 \begin{tabular}{|l|r|r|} \hline \multicolumn{2}{|c|}{ Peyton Approved } \\ \hline \multicolumn{1}{|c|}{ Income Statement } \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline MilestoneOneWorkbookInstructions & Revised \\ \hline & Peyton Approved \\ \hline & Balance Sheet \\ \hline & As of December 31, 2017 \\ \hline & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} Milestone One Workbook Instructions Revised Peyton Approved Income Statement for Year Ended 12/31/2017 The company is planning to open another location in 2018 . Using the preliminary statements as a base, prepare pro forma (budgeted) financials for 2018 for the new location using the following information: Milestone One Workbook Instructions Revised Peyton Approved Statement of Retained Earnings for Year Ended 12/31/2017 Preliminary