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.

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

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

5. Note about later borrowing - financials will show loan from parents repaid and use of bank financing.

The company is planning to open another location in 2018. Prepare pro forma 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.

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

Except as noted below, 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.

PLEASE HELP ME WITH THE CASH FLOWS WORKSHEET.

Statement of cash Flow For Year Ended 12/31/2017 Statement of cash Flow For Year Ended 12/31/2017 Net Income $ 175,576.18 677.86 Net Income Depreciation Expense Depreciation Expense 176,254.04 Increase in Accounts Receivable Increase in Baking Supplies Increase in Merchandise inventory Increase in Prepaid Rent Increase in Prepaid Insurance Increase in Misc Supplies Increase in Accounts Payable Increase in Wages Payable Increase in Interest Payable (25,886.91) (8,187.84) (443.10) 449.55) (1,004.55) (114.99) 3,292.11 1850.48 44.96 Increase in Accounts Receivable Increase in Baking Supplies Increase in Merchandise i Increase in Prepaid Rent Increase in Prepaid Insurance Increase in Misc. Supplies Increase in Accounts Payable Increase in Wages Payable Increase in Interest Payable Operating Cash Flow 145,354.65 Operating Cash Flow Cash Flow from Investments Equipment Purchases Cash Flow from Investments Equipment Purchases (6,000.00) Cash Flow from Investments (6,00000) Cash Flow from Investments Cash Flow from Financing Repayment of Note Payable Dividends Paid (10,000.00) 105,000.00) Cash Flow from Financing Repayment of Note Payable Dividends Paid Cash Flow from Financing 115,000 00) 24,354 65 43,165 39 67,52004 Cash Flow from Financing Net Cash Flow Net Cash Flow Beginning Cash Beginning Cash Ending Cash Ending Cash PEYTON APPROVED TRIAL BALANCE As of December 31, 2017 Unadjusted trial balance Adjusting entries Cr Adjusted trial balance Cr Cr 67,520.04 68,519.91 68,520.04 68,519.91 700.00 18,506.70 1,038.07 200.00 2,114.55 2,114.55 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 1,000.00 700.00 3,000.00 15,506.70 1,238.07 200.00 200.00 2,11455 2,114.55 4,000.00 2,000.00 12,000.00 1,606.44 1,200.00 20,262.11 3,383.28 1,000.00 3,175.00 1,000.00 23,437.11 3,383.28 5,000.00 20,000.00 50,144.84 5,000.00 20,000.00 50,144.84 105,000.00 105,000.00 327,322.55 327,322.55 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 1,549.74 818.31 105,834.29 859.77 24,549.19 10,670.72 3,000.46 2,045.77 1,538.84 677.86 ,091.08 1,549.74 818.31 Misc. Supplies Expense Business License Expense se 175.00 Depreciation Expense Insurance Expense Advertising Expense Interest Expense elephone Expense Gain/Loss on disposal of equipment 100.00 6,375.00 100.00 432,111.32 429,136.32 429,136.32 6,375.00 432,111.32 Statement of cash Flow For Year Ended 12/31/2017 Statement of cash Flow For Year Ended 12/31/2017 Net Income $ 175,576.18 677.86 Net Income Depreciation Expense Depreciation Expense 176,254.04 Increase in Accounts Receivable Increase in Baking Supplies Increase in Merchandise inventory Increase in Prepaid Rent Increase in Prepaid Insurance Increase in Misc Supplies Increase in Accounts Payable Increase in Wages Payable Increase in Interest Payable (25,886.91) (8,187.84) (443.10) 449.55) (1,004.55) (114.99) 3,292.11 1850.48 44.96 Increase in Accounts Receivable Increase in Baking Supplies Increase in Merchandise i Increase in Prepaid Rent Increase in Prepaid Insurance Increase in Misc. Supplies Increase in Accounts Payable Increase in Wages Payable Increase in Interest Payable Operating Cash Flow 145,354.65 Operating Cash Flow Cash Flow from Investments Equipment Purchases Cash Flow from Investments Equipment Purchases (6,000.00) Cash Flow from Investments (6,00000) Cash Flow from Investments Cash Flow from Financing Repayment of Note Payable Dividends Paid (10,000.00) 105,000.00) Cash Flow from Financing Repayment of Note Payable Dividends Paid Cash Flow from Financing 115,000 00) 24,354 65 43,165 39 67,52004 Cash Flow from Financing Net Cash Flow Net Cash Flow Beginning Cash Beginning Cash Ending Cash Ending Cash PEYTON APPROVED TRIAL BALANCE As of December 31, 2017 Unadjusted trial balance Adjusting entries Cr Adjusted trial balance Cr Cr 67,520.04 68,519.91 68,520.04 68,519.91 700.00 18,506.70 1,038.07 200.00 2,114.55 2,114.55 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 1,000.00 700.00 3,000.00 15,506.70 1,238.07 200.00 200.00 2,11455 2,114.55 4,000.00 2,000.00 12,000.00 1,606.44 1,200.00 20,262.11 3,383.28 1,000.00 3,175.00 1,000.00 23,437.11 3,383.28 5,000.00 20,000.00 50,144.84 5,000.00 20,000.00 50,144.84 105,000.00 105,000.00 327,322.55 327,322.55 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 1,549.74 818.31 105,834.29 859.77 24,549.19 10,670.72 3,000.46 2,045.77 1,538.84 677.86 ,091.08 1,549.74 818.31 Misc. Supplies Expense Business License Expense se 175.00 Depreciation Expense Insurance Expense Advertising Expense Interest Expense elephone Expense Gain/Loss on disposal of equipment 100.00 6,375.00 100.00 432,111.32 429,136.32 429,136.32 6,375.00 432,111.32