Revised Income Statement (Blue Tab)

I need help interpreting the word problems 1 through 5 found underneath PEYTON APPROVED PRO FORMA INFORMATION" and on the worksheet called Milestone 2 Instructions and have adjusting journal entries performed for these word problems. I need someone to help me follow the directions found on the Hints and Tips. This way, I can figure out how to prepare the pro forma financials for 2018 using all the information found on the Financial statements from 2017 too. I am only supposed to focus on the financial statements, which are associated with "Preliminary." Alright? However, I uploaded the financial statements associated with "Revised" anyways.

The company is planning to open another location in 2018 . Prepare pro forma financials for 2018 for the new location using the above information you see at the very top of this question posting.

g 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 supplier's warehouse. At 12/31/17, Peyton-has-$200 worth of merchandise on consignment at-Bruno's House of Bacon.-0 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, 1 1.--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 supplier's warehouse. I Credito Debita $3,1750 General Journala Dated Account-Title & Explanation Post-Ref. Dec. 29, 20170 Baking Supplies (A+) Accounts Payable (L+do Customer purchased baking supplies with-freight shipping on account. O $3,1750 = Baking Supplies +-Freight-in = $3,000+ $1751 = $3,1751 2.--At-12/31/17, Peyton-has-$200 worth of merchandise on consignment-at-Bruno's House of Bacon. Credito General Journala Dated Account Title & Explanation Post-Ref. Dec. 31, 2017 Consignment inventory (A+). Merchandise-inventory (A-) Debito $2000 $2000 alg g Reclassified merchandise- inventory into consignment- inventory. 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. I Credito Debito $1,0000 $1,0000 General Journala Dated Account Title & Explanation Post-Ref. Dec. 29, 2017 Cash (A+) Customer deposit-(L+) To record cash received from a customer-before-a-service has been provided or before goods have been shipped. 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. Historical cost of mixer + Accumulated depreciation--mixer + Book value of mixer Insurance claim agreed Loss on disposal of mixer + $2,0001 -$1.2001 S-8000 -$---7001 S-1000 Loss on disposal of mixer will be recorded as an expense. Insurance claim agreed by insurance company will be received in January; therefore, the Other receivableinsurance or insurance company will be recorded as an Asset - (Receivables). I *Book value of mixer is also called Net Book value (or-Carrying value) of mixer. I Credito General Journala Dated Account Title & Explanation Post-Ref. Dec. 29, 2017 Other receivable--Insurance (A+) Accumulated-Depreciation-mixer (CA- Loss on disposal of equipment (E+)o Baking Equipment (Mixer) (A-) O To record-disposal of asset. Debito $7000 $1,2000 $1000 $2,0000 Gain/Loss on disposal =Other receivable-Insurance cash-((Plant asset (old mixer) - Accumulated-Depreciation=Plant-asset-Cold mixer)) Gain/Loss on disposal =-Other receivable-Insurance cash-Book-value of Plant asset (old mixer) Gain/Loss on disposal=($700-($2,000-$1,200) Gain Loss on disposal = ($700---($800) Gain/Loss on disposal = $700---$8001 Loss on disposal =--$1009 Milestone 2.Hints and Tips Milestone-2 Hints-Sep-30, 2020-8:52 AM 1 For Milestone-2 you will be creating pro-forma-financial statements. A Pro-forma financial statement is just another term for estimated or projected-financial-statements. I 1 Base your proforma financial statements on the-2017-financial statements in the Yellow-Tab- NOT the revised-2017-financials-from-Milestone 1-in-the-blue tabs. 1 Here are some check-figures: 1 Proforma Income-Statement-Net-Income:-$74,036.30 Proforma-Balance Sheet: Total Assets =-Total:Liabilities & Equity=-$117,534.209 As the instructions-state, you will be multiplying most of the items from the 2017-income statement-by: 8. or-0.8.1 1 The-line-items with specific instructions that should not be multiplied by: 8 are listed below. The instructions for calculating these accounts are in the Milestone-2-Instructions tab.[ Rent Expenses Wages-Expenser Depreciation Expense Accounts Receivable Baking Supplies Merchandise Inventory Baking Equipment Accumulated-Depreciation Accounts Payable Notes Payable Retained Earnings (should-equal-net-income from your Pro-Forma Income Statement). T 7 8 INSTRUCTIONS FOR MILESTONE 2 (Due Module 5) 9 10 IMPORTANT NOTE: 11 12 Make sure to completely review the Rubric for Milestone 2 13 14 Use the data from Milestone 1 and this Milestone to finalize your final project due in Final Project (Module 7) 15 16 17 18 ITEMS TO COMPLETE FOR THIS MILESTONE (Green Tabs) : 19 20 GENERAL 21 22 Use information from Milestone 1 and the plan to open a new location (see bottom of page) for your statements 23 24 PRO FORMA FINANCIAL STATEMENTS 25 Using the Preliminary Statements as a base, prepare the following Pro Forma Financial Statements for the proposed new location (pro forma statements in this case are budgeted statements for 2018 based on the new location scenario at the bottom of the page) 26 27 28 Pro Forma Income Statement Pro Forma Balance Sheet 29 32 33 34 PEYTON APPROVED PRO FORMA INFORMATION 35 The company is planning to open another location in 2018. Prepare pro forma financials for 2018 for the new location using the following information: 36 37 38 1. Cost of leasing commercial space: $1,500 per month. 39 2. 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. 40 41 3. Cost of hiring and training new employees: three at $25,000 each for the first year. 42 43 4. Except as noted below 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 44 45 5. 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. 46 47 1 2 PEYTON APPROVED TRIAL BALANCE As of December 31, 2017 3 4 5 6 ref Unadjusted trial balance Dr Cr 67,520.04 68,519.91 Adjusting entries Dr Cr 1,000.00 ref 7 8 9 700.00 3,175.00 10 15,506.70 1,238.07 11 200.00 12 200.00 13 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 14 15 Adjusted trial balance Dr Cr 68,520.04 68,519.91 700.00 18,681.70 1,038.07 200.00 2,114.55 2,114.55 170.49 12,000.00 406.44 1,000.00 23,437.11 3,383.28 211.46 5,000.00 2,114.55 2,114.55 170.49 14,000.00 16 2,000.00 17 1,606.44 1,200.00 18 1,000.00 3,175.00 19 20 20,262.11 3,383.28 211.46 5,000.00 21 22 23 24 20,000.00 50,144.84 20,000.00 50,144.84 25 105,000.00 26 27 28 327,322.55 1,205,64 327,322.55 1,205.64 29 30 31 32 33 Common Stock Beginning Retained earnings Dividends 105,000.00 Bakery Sales Merchandise Sales Cost of Goods Sold - Baked 105,834.29 Cost of Goods Sold - Merchandise 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 34 105,834.29 859.77 24,549.19 10,670.72 3,000.46 2,045.77 1,363.84 677.86 1,091.08 1,549.74 818.31 490.98 100.00 432,111.32 35 36 37 38 39 40 100.00 6,375.00 41 429,136.32 6,375.00 432,111.32 1 Preliminary 2 3 Peyton Approved Income Statement For Year Ended 12/31/2017 4 5 6 7 $ 327,322.55 1,205.64 8 9 328,528.19 10 Bakery Sales Merchandise Sales Total Revenues Cost of Goods Sold - Baked Cost of Goods Sold - Merchandise Total Cost of Goods Sold Gross Profit 105,834.29 859.77 11 12 106,694.06 221,834.13 13 14 15 16 17 Operating Expenses: 18 19 20 Rent Expense Wages Expense Misc. Supplies Expense Business License Expense 24,549.19 10,670.72 3,000.46 2.045.77 21 22 23 24 25 Misc. Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense Total Operating Expenses: 1,363.84 677.86 1,091.08 1,549.74 818.31 490.98 26 27 28 29 46,257.95 30 31 Net Income 175,576.18 A B D E C Preliminary 1 2 3 3 4 5 4 Peyton Approved Statement of Retained Earnings For Year Ended 12/31/2017 6 7 8 Beginning Balance: plus Net Income $ 50,144.84 175,576.18 9 10 11 12 13 less Dividends: Ending Balance 105,000.00 $120,721.02 1 Preliminary 2 3 Peyton Approved Balance Sheet As of December 31, 2017 4 5 6 7 8 Liabilities and Owners' Equity Current Liabilities: Accounts Payable 20,262.11 Wages Payable 3,383.28 Interest Payable 211.46 9 Assets Current Assets: Cash Accounts Receivable Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Misc. Supplies 10 11 67,520.04 68,519.91 15,506.70 1,238.07 2,114.55 2,114.55 170.49 12 13 14 15 16 17 Total Current Assets 157,184.31 Total Current Liabilities 23,856.85 18 19 20 Long Term Liabilities: Notes Payable Total Long Term Liabilities: Long Term/Fixed Assets: Baking Equipment 5,000.00 21 14,000.00 5,000.00 22 Accumulated Depreciation Net Fixed assets -1,606.44 23 12,393.56 Total Liabilities: 28,856.85 24 25 Common Stock Retained Earnings 20,000.00 120,721.02 26 27 28 Total Equity 140,721.02 29 30 Total Assets: 169,577.87 Total Liabilities & Equity 169,577.87 1 Preliminary 2. 3 4 5 6. 2 3 4 Peyton Approved Statement of cash Flow For Year Ended 12/31/2017 5 Net Income Depreciation Expense $ 175,576.18 677.86 8 176,254.04 7 8 9 10 11 12 13 14 15 16 17 18 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 1,850.48 44.96 19 Operating Cash Flow 145,354.65 20 21 22 23 24 Cash Flow from Investments Equipment Purchases (6,000.00) 25 Cash Flow from Investments (6,000.00 Cash Flow from Financing Repayment of Note Payable Dividends Paid (10,000.00) (105,000.00) Cash Flow from Financing (115,000.00 26 27 28 29 30 31 32 33 34 35 36 37 Net Cash Flow 24,354.65 Beginning Cash 43, 165.39 Ending Cash 67,520.04 1 2 3 Peyton Approved Income Statement For Year Ended 12/31/2017 4 5 6 7 $ 327,322.55 1,205.64 00 9 328,528.19 10 Bakery Sales Merchandise Sales Total Revenues Cost of Goods Sold - Baked Cost of Goods Sold - Merchandise Total Cost of Goods Sold Gross Profit $ 105,834.29 859.77 11 12 106,694.06 $ 221,834.13 13 14 15 16 17 Operating Expenses: 18 19 20 Rent Expense Wages Expense Misc. Supplies Expense 24,549.19 10,670.72 3,000.46 21 22 23 24 25 Business License Expense Misc. Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense Gain/Loss on disposal of equipment Total Operating Expenses: 2,045.77 1,363.84 677.86 1,091.08 1,549.74 818.31 490.98 100.00 26 27 28 29 30 46,357.95 31 32 Net Income 175,476.18 A B C D E G I J K 1 2. 3 Peyton Approved Statement of Retained Earnings For Year Ended 12/31/2017 Instructions Milestone 1 4 5 6 7 8 9 10 11 12 13 8 9 Beginning Balance: plus Net Income $ 50,144.84 175,476.18 less Dividends: Ending Balance 105,000.00 $ 120,621.02 $50,144.84 + $175,476.18 - $105,000 = $120,621.02 1 2 Peyton Approved Balance Sheet As of December 31, 2017 Instructions Milestone 1 3 4 5 6 7 8 Liabilities and Owners' Equity Current Liabilities: Accounts Payable 23,437.11 Wages Payable 3,383.28 Interest Payable 211.46 Customer Deposit 1,000.00 9 10 Assets Current Assets: Cash Accounts Receivable Other receivable--Insurance Baking Supplies Merchandise Inventory Consignment Inventory Prepaid Rent Prepaid Insurance Misc. Supplies 11 12 68,520.04 68,519.91 700.00 18,681.70 1,038.07 200.00 2.114.55 2,114.55 170.49 13 15 16 17 18 19 Total Current Assets 162,059.31 Total Current Liabilities 28,031.85 20 21 22 Long Term Liabilities: Notes Payable Total Long Term Liabilities: 5,000.00 23 Long Term/Fixed Assets: Baking Equipment Accumulated Depreciation Net Fixed assets 5,000.00 12,000.00 -406.44 24 25 11,593.56 Total Liabilities: 33,031.85 26 27 Common Stock Retained Earnings 20,000.00 120,621.02 28 29 30 Total Equity 140,621.02 31 32 Total Assets: 173,652.87 Total Liabilities & Equity 173,652.87 1 2 3 Peyton Approved Statement of cash Flow For Year Ended 12/31/2017 Instructions Milestone 1 4 5 6 7 Net Income Depreciation Expense Loss on disposal of plant asset $ 175,476.18 677.86 100.00 8 9 176,254.04 10 11 12 13 14 15 16 Increase in Accounts Receivable Increase in Baking Supplies Increase in Other receivable -- Insurance Increase in Merchandise inventory Increase in Consignment 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) (11,362.84) (700.00) (243.10) (200.00) (449.55) (1,004.55) (114.99) 6,467.11 1,850.48 44.96 17 18 19 20 21 22 Increase in Customer Deposit 1,000.00 23 24 Operating Cash Flow 145,654.65 25 26 27 Cash Flow from Investments Equipment Purchases Cash receipt from sale (or disposal) of plant asset Fixed Asset Roll Forward ($6,000.00) 700.00 28 29 30 Cash Flow from Investments (5,300.00) 1/1/2017 Plus Purchases Less: Disposals 12/31/2017 $8,000.00 is Historical cost $6,000.00 is Historical cost ($2.000.00) is Historical cost $12,000.00 $8,000 + $6,000 31 32 33 Cash Flow from Financing Repayment of Note Payable Dividends Paid (10,000.00) (105,000.00) 34 35 36 Cash Flow from Financing (115,000.00) 37 Accum. Depreciation 1/1/2017 2017 Depreciation Less: Disposals 12/31/2017 $928.58 is Accumulated I $677.79 is Accumulated ($1,200.00) is Accumulated $406.37 $928,58 + $677 38 Net Cash Flow 25,354.65 39 40 Beginning Cash 43,165.39 41 42 Ending Cash 68,520.04 22 23 24 25 26 Fixed Asset Roll Forward 27 28 29 30 1/1/2017 Plus Purchases Less: Disposals 12/31/2017 $8,000.00 is Historical cost of plant asset from Balance Sheet 2016 $6.000.00 is Historical cost of Baking equipment, a plant asset, from Balance Sheet 2015 (S2,000.00) is Historical cost of Baking equpment (mixer) and is from Adjusting Entries of Trial Balance of Year Ended December 31, 2017 $12,000.00 $8,000 + $6,000 + (-2,000) or $8.000 + $6,000 - $2.000 = $12,000 31 32 33 34 35 36 37 Accum. Depreciation 1/1/2017 2017 Depreciation Less: Disposals 12/31/2017 $928.58 is Accumulated Depreciatio from Balance Sheet 2016 $677.79 is Accumulated depreciation from Balance Sheet 2015 ($1,200.00) is Accumulated depreciation, an Adjusting Entry, connected to Accumulated Deprecioation of mixer on Trial Balance of Year Ended December 31, 2017 $406.37 $928,58 + $677.79 +(-$1,200) or $928.58 +5677.79 - $1,200.00 38 39 g 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 supplier's warehouse. At 12/31/17, Peyton-has-$200 worth of merchandise on consignment at-Bruno's House of Bacon.-0 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, 1 1.--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 supplier's warehouse. I Credito Debita $3,1750 General Journala Dated Account-Title & Explanation Post-Ref. Dec. 29, 20170 Baking Supplies (A+) Accounts Payable (L+do Customer purchased baking supplies with-freight shipping on account. O $3,1750 = Baking Supplies +-Freight-in = $3,000+ $1751 = $3,1751 2.--At-12/31/17, Peyton-has-$200 worth of merchandise on consignment-at-Bruno's House of Bacon. Credito General Journala Dated Account Title & Explanation Post-Ref. Dec. 31, 2017 Consignment inventory (A+). Merchandise-inventory (A-) Debito $2000 $2000 alg g Reclassified merchandise- inventory into consignment- inventory. 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. I Credito Debito $1,0000 $1,0000 General Journala Dated Account Title & Explanation Post-Ref. Dec. 29, 2017 Cash (A+) Customer deposit-(L+) To record cash received from a customer-before-a-service has been provided or before goods have been shipped. 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. Historical cost of mixer + Accumulated depreciation--mixer + Book value of mixer Insurance claim agreed Loss on disposal of mixer + $2,0001 -$1.2001 S-8000 -$---7001 S-1000 Loss on disposal of mixer will be recorded as an expense. Insurance claim agreed by insurance company will be received in January; therefore, the Other receivableinsurance or insurance company will be recorded as an Asset - (Receivables). I *Book value of mixer is also called Net Book value (or-Carrying value) of mixer. I Credito General Journala Dated Account Title & Explanation Post-Ref. Dec. 29, 2017 Other receivable--Insurance (A+) Accumulated-Depreciation-mixer (CA- Loss on disposal of equipment (E+)o Baking Equipment (Mixer) (A-) O To record-disposal of asset. Debito $7000 $1,2000 $1000 $2,0000 Gain/Loss on disposal =Other receivable-Insurance cash-((Plant asset (old mixer) - Accumulated-Depreciation=Plant-asset-Cold mixer)) Gain/Loss on disposal =-Other receivable-Insurance cash-Book-value of Plant asset (old mixer) Gain/Loss on disposal=($700-($2,000-$1,200) Gain Loss on disposal = ($700---($800) Gain/Loss on disposal = $700---$8001 Loss on disposal =--$1009 Milestone 2.Hints and Tips Milestone-2 Hints-Sep-30, 2020-8:52 AM 1 For Milestone-2 you will be creating pro-forma-financial statements. A Pro-forma financial statement is just another term for estimated or projected-financial-statements. I 1 Base your proforma financial statements on the-2017-financial statements in the Yellow-Tab- NOT the revised-2017-financials-from-Milestone 1-in-the-blue tabs. 1 Here are some check-figures: 1 Proforma Income-Statement-Net-Income:-$74,036.30 Proforma-Balance Sheet: Total Assets =-Total:Liabilities & Equity=-$117,534.209 As the instructions-state, you will be multiplying most of the items from the 2017-income statement-by: 8. or-0.8.1 1 The-line-items with specific instructions that should not be multiplied by: 8 are listed below. The instructions for calculating these accounts are in the Milestone-2-Instructions tab.[ Rent Expenses Wages-Expenser Depreciation Expense Accounts Receivable Baking Supplies Merchandise Inventory Baking Equipment Accumulated-Depreciation Accounts Payable Notes Payable Retained Earnings (should-equal-net-income from your Pro-Forma Income Statement). T 7 8 INSTRUCTIONS FOR MILESTONE 2 (Due Module 5) 9 10 IMPORTANT NOTE: 11 12 Make sure to completely review the Rubric for Milestone 2 13 14 Use the data from Milestone 1 and this Milestone to finalize your final project due in Final Project (Module 7) 15 16 17 18 ITEMS TO COMPLETE FOR THIS MILESTONE (Green Tabs) : 19 20 GENERAL 21 22 Use information from Milestone 1 and the plan to open a new location (see bottom of page) for your statements 23 24 PRO FORMA FINANCIAL STATEMENTS 25 Using the Preliminary Statements as a base, prepare the following Pro Forma Financial Statements for the proposed new location (pro forma statements in this case are budgeted statements for 2018 based on the new location scenario at the bottom of the page) 26 27 28 Pro Forma Income Statement Pro Forma Balance Sheet 29 32 33 34 PEYTON APPROVED PRO FORMA INFORMATION 35 The company is planning to open another location in 2018. Prepare pro forma financials for 2018 for the new location using the following information: 36 37 38 1. Cost of leasing commercial space: $1,500 per month. 39 2. 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. 40 41 3. Cost of hiring and training new employees: three at $25,000 each for the first year. 42 43 4. Except as noted below 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 44 45 5. 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. 46 47 1 2 PEYTON APPROVED TRIAL BALANCE As of December 31, 2017 3 4 5 6 ref Unadjusted trial balance Dr Cr 67,520.04 68,519.91 Adjusting entries Dr Cr 1,000.00 ref 7 8 9 700.00 3,175.00 10 15,506.70 1,238.07 11 200.00 12 200.00 13 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 14 15 Adjusted trial balance Dr Cr 68,520.04 68,519.91 700.00 18,681.70 1,038.07 200.00 2,114.55 2,114.55 170.49 12,000.00 406.44 1,000.00 23,437.11 3,383.28 211.46 5,000.00 2,114.55 2,114.55 170.49 14,000.00 16 2,000.00 17 1,606.44 1,200.00 18 1,000.00 3,175.00 19 20 20,262.11 3,383.28 211.46 5,000.00 21 22 23 24 20,000.00 50,144.84 20,000.00 50,144.84 25 105,000.00 26 27 28 327,322.55 1,205,64 327,322.55 1,205.64 29 30 31 32 33 Common Stock Beginning Retained earnings Dividends 105,000.00 Bakery Sales Merchandise Sales Cost of Goods Sold - Baked 105,834.29 Cost of Goods Sold - Merchandise 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 34 105,834.29 859.77 24,549.19 10,670.72 3,000.46 2,045.77 1,363.84 677.86 1,091.08 1,549.74 818.31 490.98 100.00 432,111.32 35 36 37 38 39 40 100.00 6,375.00 41 429,136.32 6,375.00 432,111.32 1 Preliminary 2 3 Peyton Approved Income Statement For Year Ended 12/31/2017 4 5 6 7 $ 327,322.55 1,205.64 8 9 328,528.19 10 Bakery Sales Merchandise Sales Total Revenues Cost of Goods Sold - Baked Cost of Goods Sold - Merchandise Total Cost of Goods Sold Gross Profit 105,834.29 859.77 11 12 106,694.06 221,834.13 13 14 15 16 17 Operating Expenses: 18 19 20 Rent Expense Wages Expense Misc. Supplies Expense Business License Expense 24,549.19 10,670.72 3,000.46 2.045.77 21 22 23 24 25 Misc. Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense Total Operating Expenses: 1,363.84 677.86 1,091.08 1,549.74 818.31 490.98 26 27 28 29 46,257.95 30 31 Net Income 175,576.18 A B D E C Preliminary 1 2 3 3 4 5 4 Peyton Approved Statement of Retained Earnings For Year Ended 12/31/2017 6 7 8 Beginning Balance: plus Net Income $ 50,144.84 175,576.18 9 10 11 12 13 less Dividends: Ending Balance 105,000.00 $120,721.02 1 Preliminary 2 3 Peyton Approved Balance Sheet As of December 31, 2017 4 5 6 7 8 Liabilities and Owners' Equity Current Liabilities: Accounts Payable 20,262.11 Wages Payable 3,383.28 Interest Payable 211.46 9 Assets Current Assets: Cash Accounts Receivable Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Misc. Supplies 10 11 67,520.04 68,519.91 15,506.70 1,238.07 2,114.55 2,114.55 170.49 12 13 14 15 16 17 Total Current Assets 157,184.31 Total Current Liabilities 23,856.85 18 19 20 Long Term Liabilities: Notes Payable Total Long Term Liabilities: Long Term/Fixed Assets: Baking Equipment 5,000.00 21 14,000.00 5,000.00 22 Accumulated Depreciation Net Fixed assets -1,606.44 23 12,393.56 Total Liabilities: 28,856.85 24 25 Common Stock Retained Earnings 20,000.00 120,721.02 26 27 28 Total Equity 140,721.02 29 30 Total Assets: 169,577.87 Total Liabilities & Equity 169,577.87 1 Preliminary 2. 3 4 5 6. 2 3 4 Peyton Approved Statement of cash Flow For Year Ended 12/31/2017 5 Net Income Depreciation Expense $ 175,576.18 677.86 8 176,254.04 7 8 9 10 11 12 13 14 15 16 17 18 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 1,850.48 44.96 19 Operating Cash Flow 145,354.65 20 21 22 23 24 Cash Flow from Investments Equipment Purchases (6,000.00) 25 Cash Flow from Investments (6,000.00 Cash Flow from Financing Repayment of Note Payable Dividends Paid (10,000.00) (105,000.00) Cash Flow from Financing (115,000.00 26 27 28 29 30 31 32 33 34 35 36 37 Net Cash Flow 24,354.65 Beginning Cash 43, 165.39 Ending Cash 67,520.04 1 2 3 Peyton Approved Income Statement For Year Ended 12/31/2017 4 5 6 7 $ 327,322.55 1,205.64 00 9 328,528.19 10 Bakery Sales Merchandise Sales Total Revenues Cost of Goods Sold - Baked Cost of Goods Sold - Merchandise Total Cost of Goods Sold Gross Profit $ 105,834.29 859.77 11 12 106,694.06 $ 221,834.13 13 14 15 16 17 Operating Expenses: 18 19 20 Rent Expense Wages Expense Misc. Supplies Expense 24,549.19 10,670.72 3,000.46 21 22 23 24 25 Business License Expense Misc. Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense Gain/Loss on disposal of equipment Total Operating Expenses: 2,045.77 1,363.84 677.86 1,091.08 1,549.74 818.31 490.98 100.00 26 27 28 29 30 46,357.95 31 32 Net Income 175,476.18 A B C D E G I J K 1 2. 3 Peyton Approved Statement of Retained Earnings For Year Ended 12/31/2017 Instructions Milestone 1 4 5 6 7 8 9 10 11 12 13 8 9 Beginning Balance: plus Net Income $ 50,144.84 175,476.18 less Dividends: Ending Balance 105,000.00 $ 120,621.02 $50,144.84 + $175,476.18 - $105,000 = $120,621.02 1 2 Peyton Approved Balance Sheet As of December 31, 2017 Instructions Milestone 1 3 4 5 6 7 8 Liabilities and Owners' Equity Current Liabilities: Accounts Payable 23,437.11 Wages Payable 3,383.28 Interest Payable 211.46 Customer Deposit 1,000.00 9 10 Assets Current Assets: Cash Accounts Receivable Other receivable--Insurance Baking Supplies Merchandise Inventory Consignment Inventory Prepaid Rent Prepaid Insurance Misc. Supplies 11 12 68,520.04 68,519.91 700.00 18,681.70 1,038.07 200.00 2.114.55 2,114.55 170.49 13 15 16 17 18 19 Total Current Assets 162,059.31 Total Current Liabilities 28,031.85 20 21 22 Long Term Liabilities: Notes Payable Total Long Term Liabilities: 5,000.00 23 Long Term/Fixed Assets: Baking Equipment Accumulated Depreciation Net Fixed assets 5,000.00 12,000.00 -406.44 24 25 11,593.56 Total Liabilities: 33,031.85 26 27 Common Stock Retained Earnings 20,000.00 120,621.02 28 29 30 Total Equity 140,621.02 31 32 Total Assets: 173,652.87 Total Liabilities & Equity 173,652.87 1 2 3 Peyton Approved Statement of cash Flow For Year Ended 12/31/2017 Instructions Milestone 1 4 5 6 7 Net Income Depreciation Expense Loss on disposal of plant asset $ 175,476.18 677.86 100.00 8 9 176,254.04 10 11 12 13 14 15 16 Increase in Accounts Receivable Increase in Baking Supplies Increase in Other receivable -- Insurance Increase in Merchandise inventory Increase in Consignment 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) (11,362.84) (700.00) (243.10) (200.00) (449.55) (1,004.55) (114.99) 6,467.11 1,850.48 44.96 17 18 19 20 21 22 Increase in Customer Deposit 1,000.00 23 24 Operating Cash Flow 145,654.65 25 26 27 Cash Flow from Investments Equipment Purchases Cash receipt from sale (or disposal) of plant asset Fixed Asset Roll Forward ($6,000.00) 700.00 28 29 30 Cash Flow from Investments (5,300.00) 1/1/2017 Plus Purchases Less: Disposals 12/31/2017 $8,000.00 is Historical cost $6,000.00 is Historical cost ($2.000.00) is Historical cost $12,000.00 $8,000 + $6,000 31 32 33 Cash Flow from Financing Repayment of Note Payable Dividends Paid (10,000.00) (105,000.00) 34 35 36 Cash Flow from Financing (115,000.00) 37 Accum. Depreciation 1/1/2017 2017 Depreciation Less: Disposals 12/31/2017 $928.58 is Accumulated I $677.79 is Accumulated ($1,200.00) is Accumulated $406.37 $928,58 + $677 38 Net Cash Flow 25,354.65 39 40 Beginning Cash 43,165.39 41 42 Ending Cash 68,520.04 22 23 24 25 26 Fixed Asset Roll Forward 27 28 29 30 1/1/2017 Plus Purchases Less: Disposals 12/31/2017 $8,000.00 is Historical cost of plant asset from Balance Sheet 2016 $6.000.00 is Historical cost of Baking equipment, a plant asset, from Balance Sheet 2015 (S2,000.00) is Historical cost of Baking equpment (mixer) and is from Adjusting Entries of Trial Balance of Year Ended December 31, 2017 $12,000.00 $8,000 + $6,000 + (-2,000) or $8.000 + $6,000 - $2.000 = $12,000 31 32 33 34 35 36 37 Accum. Depreciation 1/1/2017 2017 Depreciation Less: Disposals 12/31/2017 $928.58 is Accumulated Depreciatio from Balance Sheet 2016 $677.79 is Accumulated depreciation from Balance Sheet 2015 ($1,200.00) is Accumulated depreciation, an Adjusting Entry, connected to Accumulated Deprecioation of mixer on Trial Balance of Year Ended December 31, 2017 $406.37 $928,58 + $677.79 +(-$1,200) or $928.58 +5677.79 - $1,200.00 38 39