Overview For Milestone One, which is due in Module Three, you will create adjusting entries for various situations, prepare annual financial reports, calculate ratios, and develop a brief report for management explaining accounting ratios and the effects of interest rates on the future value of money You will build on this milestone in subsequent modules leading up to the final project Prompt First, review the Final Project Scenario document and the accompanying workbook 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 brief Note Milestone One is a draft of some critical elements of the final project Note that the management analysis brief corresponds to the management analysis memo in the final project Specifically, the following critical elements must be addressed I Accounting Workbook Your accounting workbook must include appropriate calculations, ratios, and notes A Create adjusting entries for financial statement preparation B Create an adjusted trial balance for financial statement preparation C Prepare financial statements for determining the companys financial position D Calculate ratios for determining the companys financial health II Management Analysis Brief Your management analysis brief should explain financial information to management Provide evidence from your accounting workbook to support your ideas when applicable A Assess the companys financial health based on ratio analyses presented in the accounting workbook B Compare ratio analysis to trends in financial ratios over time for illustrating their impact, providing examples to support your claims C Summarize the effects of different compounding periods and interest rates on future value of money ACC 308 Final Project Scenario Overview You just began a position as a financial accountant at Peyton Approved In this role, your first task is to prepare the companys 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 A supplier shipped $3,000 of ingredients on 12 29 17 Peyton receives an invoice for $3,175 for the goods and freight of $175, all dated 12 29 17 Goods were shipped FOB suppliers warehouse At 12 31 17, Peyton has $200 worth of merchandise on consignment at Brunos House of Bacon 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 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 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 Cost of leasing commercial space $1,500 per month Cost of new equipment $15,000, purchased with a long term note Use straight line depreciation assuming a seven year life, no residual value Use full years depreciation for the first year Equipment purchase was financed with a long term note Cost of hiring and training new employees three at $25,000 each for the first year Except as noted in 1, 2, 3, and 5, assets, current liabilities, sales, costs, and expenses are expected to be 80 of the existing store (from preliminary statements) except no stock Retained earnings net income Cash $7,000 Accounts receivable amount to 4 0 turns (accounts receivable turnover will be 4 0) inventory amount to show 3 0 turns (inventory turnover will be 3 0) No stock will be issued Retained earnings are to equal net income Additional financing of $5,000 will be long term Add remaining amount needed to balance into accounts payable For notes to the financial statements and Management Analysis Memo, consider the following 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 companys financial obligations 6 interest note payable was made on Jan 31, 2017, and is due Feb 1, 2019 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 PEYTON APPROVED TRIAL BALANCE As of December 31, 2017 Inst Mils Unadjusted trial balance Adjusted trial balance Adjusting entries Dr Cr Dr Cr ref ref Dr Cr 67,520 04 68,519 91 15,506 70 1,238 07 2,114 55 2,114 55 170 49 14,000 00 1,606 44 1,606 44 Cash 67,520 04 Accounts Receivable 68,519 91 Other Receivable Insurance Baking Supplies 15,506 70 Merchandise Inventory 1,238 07 Consignment Inventory Prepaid Rent 2,114 55 Prepaid Insurance 2,114 55 Misc Supplies 170 49 Baking Equipment 14,000 00 Accumulated Depreciation Customer Deposit Accounts Payable Wages Payable Interest Payable Notes Payable Common Stock Beginning Retained earnings Dividends 105,000 00 Bakery Sales Merchandise Sales Cost of Goods Sold Baked 1 05,834 29 Cost of Goods Sold Merchandis 859 77 Rent Expense 24,549 19 Wages Expense 10,670 72 Misc Supplies Expense 3,000 46 Business License Expense 2,045 77 Misc Expense 1,363 84 Depreciation Expense 677 86 Insurance Expense 1,091 08 Advertising Expense 1,549 74 Interest Expense 818 31 Telephone Expense 490 98 Gain Loss on disposal of equipment 429, 136 32 20,262 11 3,383 28 211 46 5,000 00 20,000 00 50,144 84 20,262 11 3,383 28 211 46 5,000 00 20,000 00 50,144 84 105,000 00 327,322 55 1,205 64 327,322 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 32 429,136 32 429,136 32

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Overview: For Milestone One, which is due in Module Three, you will create adjusting entries for various situations, prepare annual financial reports, calculate ratios, and

Overview: For Milestone One, which is due in Module Three, you will create adjusting entries for various situations, prepare annual financial reports, calculate ratios, and develop a brief report for management explaining accounting ratios and the effects of interest rates on the future value of money. You will build on this milestone in subsequent modules leading up to the final project. Prompt: First, review the Final Project Scenario document and the accompanying workbook. 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 brief. Note: Milestone One is a draft of some critical elements of the final project. Note that the management analysis brief corresponds to the management analysis memo in the final project. Specifically, the following critical elements must be addressed: I. Accounting Workbook: Your accounting workbook must include appropriate calculations, ratios, and notes: A. Create adjusting entries for financial statement preparation. B. Create an adjusted trial balance for financial statement preparation. C. Prepare financial statements for determining the companys financial position. D. Calculate ratios for determining the companys financial health. II. Management Analysis Brief: Your management analysis brief should explain financial information to management. Provide evidence from your accounting workbook to support your ideas when applicable. A. Assess the companys financial health based on ratio analyses presented in the accounting workbook. B. Compare ratio analysis to trends in financial ratios over time for illustrating their impact, providing examples to support your claims. C. Summarize the effects of different compounding periods and interest rates on future value of money

ACC 308 Final Project Scenario

Overview: You just began a position as a financial accountant at Peyton Approved. In this role, your first task is to prepare the companys 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.

A supplier shipped $3,000 of ingredients on 12/29/17. Peyton receives an invoice for $3,175 for the goods and freight of $175, all dated 12/29/17. Goods were shipped FOB suppliers warehouse.

At 12/31/17, Peyton has $200 worth of merchandise on consignment at Brunos House of Bacon.

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.

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 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:

Cost of leasing commercial space: $1,500 per month.

Cost of new equipment: $15,000, purchased with a long-term note. Use straight line depreciation assuming a seven-year life, no residual value. Use full years depreciation for the first year. Equipment purchase was financed with a long-term note.

Cost of hiring and training new employees: three at $25,000 each for the first year.

Except as noted in 1, 2, 3, and 5, assets, current liabilities, sales, costs, and expenses are expected to be 80% of the existing store (from preliminary statements) except no stock. Retained earnings = net income.

Cash: $7,000. Accounts receivable amount to 4.0 turns (accounts receivable turnover will be 4.0); inventory amount to show 3.0 turns (inventory turnover will be 3.0). No stock will be issued. Retained earnings are to equal net income. Additional financing of $5,000 will be long-term. Add remaining amount needed to balance into accounts payable.

For notes to the financial statements and Management Analysis Memo, consider the following:

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 companys financial obligations:

6% interest note payable was made on Jan 31, 2017, and is due Feb 1, 2019.
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

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PEYTON APPROVED TRIAL BALANCE As of December 31, 2017 Inst Mils Unadjusted trial balance Adjusted trial balance Adjusting entries Dr Cr Dr Cr ref ref Dr Cr 67,520.04 68,519.91 15,506.70 1,238.07 2,114.55 2,114.55 170.49 14,000.00 1,606.44 1,606.44 Cash 67,520.04 Accounts Receivable 68,519.91 Other Receivable - Insurance Baking Supplies 15,506.70 Merchandise Inventory 1,238.07 Consignment Inventory Prepaid Rent 2,114.55 Prepaid Insurance 2,114.55 Misc. Supplies 170.49 Baking Equipment 14,000.00 Accumulated Depreciation Customer Deposit Accounts Payable Wages Payable Interest Payable Notes Payable Common Stock Beginning Retained earnings Dividends 105,000.00 Bakery Sales Merchandise Sales Cost of Goods Sold - Baked 1 05,834.29 Cost of Goods Sold - Merchandis 859.77 Rent Expense 24,549.19 Wages Expense 10,670.72 Misc. Supplies Expense 3,000.46 Business License Expense 2,045.77 Misc. Expense 1,363.84 Depreciation Expense 677.86 Insurance Expense 1,091.08 Advertising Expense 1,549.74 Interest Expense 818.31 Telephone Expense 490.98 Gain/Loss on disposal of equipment 429, 136.32 20,262.11 3,383.28 211.46 5,000.00 20,000.00 50,144.84 20,262.11 3,383.28 211.46 5,000.00 20,000.00 50,144.84 105,000.00 327,322.55 1,205.64 327,322.55 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 1,549.74 818.31 490.98 429,136.32 429,136.32 429,136.32