Overview: For Milestone One, which is due in Module Three, you will develop a portion of the workbook and a brief memo to management explaining the impacts to stockholder equity and the impact of tax structures. You will build on this milestone in subsequent modules to create the balance sheet and executive summary portions of your final project. Prompt: First, review the Final Project Scenario document. Using your review of the scenario, begin your workbook and discuss the impacts in your management brief, including impacts on stockholder equity and impacts based on changes to tax structure. Note: Milestone One is a draft of some of the critical elements of the final project. Specifically, the following critical elements must be addressed: I. Workbook A. Prepare adjusting entries for unrealized loss and tax issues.First, view the Student Workbook file (excel file), the tabs named Prel-Balance-Sheet-2017, Prel-Income-Statement-2017, and Prel-Retained Earnings.2017 are the tabs that contain the beginning financial statements...these tabs are yellow in color. T Then, go to the Instructions for Milestone-1, Blue tab. You will essentially have to make-3- adjustments in the trial-Balance for Milestone-1, red-tab:f -One adjustment for the unrealized losses on marketable securities (See Chapter-13, prior- class) 1 -One adjustment for the tax expense/tax payable for-25% of the-$1,500 permanent difference on meals and entertainment (See Chapter-18)1 -One adjustment for the-deferred tax-MACRS versus book as given, the tax effect, 25% (See- Chapter-18)1 Note that the trial-balance (red-tab) shows the unadjusted trial-balance, then the adjustments (debit/credit) and the adjusted-trial-balance total. So, essentially, you are to fill in the. adjustment columns for the-3 items.I noted earlier. --For example-(this is not one of the- adjustments but merely an example), let's say that the company shows $40,000 in the marketable securities-debit, unadjusted-trial-balance. --If the adjustment to be done is a credit. of $1,000, enter this amount in the related credit field of the adjustments...the debit should be. to Unrealized Gain/(Loss) on-Marketable-Securities Held for Sale (Chapter 13)...this is as an- example.I The-3 -adjustments noted above is all that needs to be done in the Excel file for-Milestone-1. TYou will find the company's financial information in the Peyton Approved Balance Sheet and Income Statement. This document will need revisions and appropriate notes added in order to prepare for the year-end audit accordingly. In addition to ensuring that the balance sheet is ready for the year-end audit, you will address other major areas of need, including: Assessing tax implications Evaluating and explaining stockholder equity Accounting for postretirement benefits (The amounts would be determined by actuaries.) Assessing impacts of leases Peyton Approved Financial InformationComprehensive income items Marketable securities on the balance sheet at a cost of $5,500,000 are available-for-sale Market value at the balance sheet date is $5,235,000 Prepare the adjusting entry to record the unrealized loss and include in comprehensive income Tax information and implications $1,500 in meal and entertainment expenses show as a permanent difference for tax. Prepare the necessary adjusting entry. The company uses straight line depreciation for book and MACRS depreciation for the tax return MACRS depreciation was $209,301 higher than book. Prepare the adjusting entry for the deferred tax. There have been recent tax structure changes that could impact the company. Peyton Approved has been a C Corp since the beginning of these changes. Peyton provides for taxes at 25% of pretax income (20% Federal, 5% state).A B C D E F G H I K L M N PEYTON APPROVED IN TRIAL BALANCE W As of December 31, 2017 Adjusting entries UI A Dr Cr Dr Cr Dr Cr Cash 1,488,999.34 1,488,999.34 Marketable Securities 5,500,000.00 5,500,000.00 Accounts Receivable 7,092,495.88 7,092,495.88 8 Baking Supplies 1,605,098.52 1,605,098.52 9 Merchandise Inventory 128, 152.63 128, 152.63 10 Prepaid Rent 71,877.07 71,877.07 11 Prepaid Insurance 207,834.14 207,834.14 12 Misc. Supplies 17,647.42 17,647.42 13 Land 250,000.00 250,000.00 14 Building 1,250,000.00 15 Baking Equipment 1,250,000.00 2,254, 140.00 2,254, 140.00 16 17 Accumulated Depreciation 328,282.00 328,282.00 18 Patent 19 Accounts Payable 1,555,212.85 1,555,212.85 20 Wages Payable 250,203.31 21 Interest Payable 250,203.31 21,888.22 21,888.2222 Current Portion of Bonds Payable 1,000,000.00 1,000,000.00 23 Income Taxes Currently Payable 1,042, 118.16 1,042, 118.16 24 Accrued Pension Liability 25 Accrued Employees Health Insurance 26 Lease Liability 27 28 Deferred Tax Liability 29 Bonds Payable 4,000,000.00 4,000,000.00 30 Preferred Stock 500,000.00 500,000.00 31 Common Stock 1,750,000.00 1,750,000.00 32 Beginning Retained earnings 2,213, 122.59 33 Dividends - Preferred 2,213, 122.59 50,000.00 50,000.00 34 Dividends - Common 5,250,000.00 5,250,000.00 35 Bakery Sales 33,881,157.15 33,881,157.15 36 Merchandise Sales 124,795.80 124,795.80 37 Cost of Goods Sold - Baker 10,954,907.36 10,954,907.36 38 Cost of Goods Sold - Merch 88,994.79 88,994.79 39 Rent Expense 1,576,731.95 1,576,731.95 40 Wages Expense 2,604,526.23 2,604,526.23 41 Misc. Supplies Expense 263,224.56 263,224.56 42 Repairs and Maintenance 47,353.05 47,353.0543 Business License Expense 211,757.65 211,757.65 44 Misc. Expense 141, 171.08 141, 171.08 45 Depreciation Expense 634,520.00 634,520.00 46 Insurance Expense 112,937.69 112,937.69 47 Advertising Expense 160,413.49 160,413.49 48 Interest Expense 484,703.27 484,703.27 49 Telephone Expense 50,821.34 50,821.34 50 Pension Expense 51 Retired Employees Health Ins. 52 Patent Amortization 53 54 Unrealized Gain/(Loss) on Marketable Securities Held for Sale 55 56 Income Taxes 4, 168,472.62 4,168,472.62 57 58 59 46,666,780.08 46,666,780.08 46,666,780.08 46,666,780.08 60 61 (1) milestone 1 62 (2) milestone 1 63