Overview: You just began a position as a financial accountant at Peyton Approved. In this role, your first task is to 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 Workbo. $7k$ k$).$ 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 $$3,000$ of ingredients on $\frac{12}{29}\frac{?}{17}.$ Peyton receives an invoice for $$3,175-$goods of $$3,000$ and freight of $$175-$all dated $\frac{12}{29}\frac{?}{17}.$ Goods were shipped FOB supplier's warehouse.

At $\frac{12}{31}\frac{?}{17},$ Peyton has $$200$ worth of merchandise on consignment at Bruno's House of Bacon.

On $\frac{12}{23}\frac{?}{17},$ Peyton received $$1,000$ deposit from Pet Globe for product to be shipped by Peyton in the second week of January.

On $\frac{12}{03}\frac{?}{2017},$ a mixer with a cost of $$2,000,$ accumulated depreciation $$1,200,$ was destroyed by a forklift. As of $\frac{12}{23}\frac{?}{17},$ 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

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 year's 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.

Cash: $$7,000.$ Accounts receivable amount to $4\mathrm{.}0$ turns $($accounts receivable turnover will be $4\mathrm{.}0)$; inventory amount to show $3\mathrm{.}0$ turns $($inventory turnover will be $3\mathrm{.}0).$ No stock will be issued. Retained earnings are to equal net income. Additional financing of $$5,000$ will be long term. Add remaining amount needed to balance into accounts payable.

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