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.

ITEMS TO COMPLETE FOR THIS MILESTONE (Blue Tabs): GENERAL 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. TRIAL BALANCE 2017 TAB Using the Peyton Approved financial data (see bottom of page): Create the necessary adjusting journal entries. Use the REF column to reference the entry to each event Complete the adjusted trial balance REVISED FINANCIAL STATEMENTS Using the preliminary financial statements (yellow tabs) and the Trial Balance 2017, prepare the following statements: Balance Sheet (BS 2017 Revised tab) Income Statement (IS 2017 Revised tab) Retained Earnings Statement (RE 2017 Revised tab) Statement of Cash Flows (CF 2017 Revised tab) RATIO ANALYSIS Using the revised 2017 financial statements, 2016 financial statements (orange tabs), and 2015 financial statements (orange tabs), prepare a ratio analysis with the following ratios: Current Ratio (Working Capital) Quick Ratio A/R Turnover Inventory Turnover Gross margin Return on Sales Return on Equity Return on Assets 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 $3,175 for the goods and freight of $175, all dated 12/29/17. Goods were shipped FOB supplier's warehouse. 2. At 12/31/17, Peyton has $200 worth of merchandise on consignment at Bruno's House of Bacon. 3. On 12/23/17, Peyton received a $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 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. PEYTON APPROVED TRIAL BALANCE As of December 31, 2017 Adjusting entries Dr Cr ref ref Unadjusted trial balance Dr Cr 67,520.04 68,519.91 Adjusted trial balance Dr Cr 67,520.04 68,519.91 15,506.70 1,238.07 15,506.70 1,238.07 2,114.55 2,114.55 170.49 14,000.00 2,114.55 2,114.55 170.49 14,000.00 1,606.44 1,606.44 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 Rent Expense Wages Expense Misc. Supplies Expense Business License Expense Misc. Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense Gain/Loss on disposal of equipment 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 50,144.84 105,000.00 105,000.00 327,322.55 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 1,549.74 818.31 490.98 105,834.29 859.77 24,549.19 10,670.72 3,000.46 2,045.77 1,363.84 677.86 1,091.08 1,549.74 818.31 490.98 429,136.32 429,136.32 429,136.32 429,136.32 Preliminary Peyton Approved Income Statement For Year Ended 12/31/2017 $ 327,322.55 1,205.64 328,528.19 Bakery Sales Merchandise Sales Total Revenues Cost of Goods Sold - Baked Cost of Goods Sold - Merchandise Total Cost of Goods Sold Gross Profit 105,834.29 859.77 106,694.06 221,834.13 Operating Expenses: Rent Expense Wages Expense Misc. Supplies Expense Business License Expense Misc. Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense Total Operating Expenses: 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 46,257.95 Net Income 175,576.18 Preliminary Peyton Approved Statement of Retained Earnings For Year Ended 12/31/2017 Beginning Balance: plus Net Income $ 50,144.84 175,576.18 less Dividends: Ending Balance 105,000.00 $ 120,721.02 Preliminary 1 Peyton Approved Statement of cash Flow For Year Ended 12/31/2017 Net Income Depreciation Expense $ 175,576.18 677.86 176,254.04 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 1,850.48 44.96 Operating Cash Flow 145,354.65 Cash Flow from Investments Equipment Purchases (6,000.00) 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) Net Cash Flow 24,354.65 Beginning Cash 43,165.39 Ending Cash 67,520.04 Peyton Approved Balance Sheet As of December 31, 2015 Assets Current Assets: Cash Accounts Receivable Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Misc. Supplies Liabilities and Owners' Equity Current Liabilities: Accounts Payable 15086.84 Wages Payable 1118.83 Interest Payable 121.53 31507.58 35118.97 8042.23 580.27 1215.32 810.21 40.51 Total Current Assets 77,315.09 Total Current Liabilities 16,327.20 Long Term/Fixed Assets: Baking Equipment Accumulated Deprecia Net Fixed assets Long Term Liabilities: Notes Payable 10,000.00 Total Long Term Liabilities: 6000 -677.79 10,000.00 5,322.21 Total Liabilities: 26,327.20 Common Stock Retained Earnings 20,000.00 36,310.10 Total Equity 56,310.10 Total Assets: 82,637.30 Total Liabilities & Equity 82,637.30 Peyton Approved Balance Sheet As of December 31, 2016 Assets Current Assets: Cash Accounts Receivable Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Misc. Supplies Liabilities and Owners' Equity Current Liabilities: Accounts Payable 16,970.00 Wages Payable 1,532.80 Interest Payable 166.50 43,165.39 42,633.00 7,318.86 794.97 1,665.00 1,110.00 55.50 Total Current Assets 96,742.72 Total Current Liabilities 18,669.30 Long Term Liabilities: Notes Payable Total Long Term Liabilities: 15,000.00 15,000.00 Long Term/Fixed Assets: Baking Equipment Accumulated Depreciation Net Fixed assets 8,000.00 -928.58 7,071.42 Total Liabilities: 33,669.30 Common Stock Retained Earnings 20,000.00 50,144.84 Total Equity 70,144.84 Total Assets: 103,814.14 Total Liabilities & Equity 103,814.14 Peyton Approved Income Statement For Year Ended 12/31/2016 214,256.48 770.76 215,027.24 Bakery Sales Merchandise Sales Total Revenues Cost of Goods Sold - Baked Cost of Goods Sold - Merchandise Total Cost of Goods Sold Gross Profit 73,159.59 549.64 73,709.23 141,818.01 Operating Expenses: Rent Expense Wages Expense Misc. Supplies Expense Business License Expense Misc. Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense Total Operating Expenses: 15,694.23 6,821.76 1,668.18 1,307.85 871.9 433.36 697.52 740.74 523.14 313.88 29,072.56 Net Income 112,745.45 2017 2016 Current Ratio (Working Capital ) Quick Ratio A/R Turnover Inventory Turnover Gross margin Return on Sales Return on Equity Return on Assets