I need the whole workbook done.
ACC309 – Intermediate Accounting III
MILESTONE 1 (Due in Module 3)
MILESTONE 2 (Due in Module 5)
Instructions Milestone 1
1.
Adjusting entries
Prepare adjusting entries for:
Unrealized loss
tax issues
FINAL PROJE
Instructions Milestone 2
1.
Capital Leases
1.
Calculate capital lease
obligations
2
See rubric for written portion
of milestone 1
Pensions
Calculate pension payouts
3
2
Adjusting entries
3
Prepare adjusting entries for:
Capital leases
Pension payouts
See rubric for written portion
of milestone 2
4
FINAL PROJECT (Due in Module 7)
Instructions Final Project
Adjusting Entries
Prepare adjusting entries for:
Patent
Major repair capitalization
Adjusted Trial Balance
Complete adjusted trial balance
Revised Financial
Statements
Prepare revised financial
statements
Prepare a statement of
comprehensive income include on the revised income
statement
Earnings per Share
Determine the impact of
expansion options on earnings
per share
See rubric for written portion
of the final project
INSTRUCTIONS FOR MILESTONE 1 (Due Week 3)
IMPORTANT NOTE:
Make sure to completely review the Rubric for Milestone 1
Use the data from this Milestone and begin working on your final presentation due in Week 7
ITEMS TO COMPLETE FOR THIS MILESTONE:
GENERAL
In preparation of the annual audit, prepare appropriate adjusting entries and post to the trial balance workbook (red t
ADJUSTING ENTRIES
Prepare adjusting entries for unrealized loss
Prepare adjusting entries for tax issues
FINANCIAL INFORMATION FOR THIS MILESTONE
Comprehensive income items
• Marketable securities on the balance sheet at a cost of $5,500,000 are available-for-sale
• Market value at the balance sheet date is $5,235,00
• Prepare the adjusting entry to record the unrealized loss and include in comprehensive income
Tax information and implications
• $1,500 in meal and entertainment expenses show as a permanent difference for tax. Prepare the necessary adjus
• The company uses straight line depreciation for book and MACRS depreciation for the tax return
• MACRS depreciation was $209,301 higher than book. Prepare the adjusting entry for the deferred tax.
• There have been recent tax structure changes the could impact the company. Peyton Approved has been a C Corp
beginning of these changes. Peyton provides for taxes at 25% of pretax income (20% Federal, 5% state).
Stockholder Equity
Peyton Approved prides itself on transparency with shareholders and investors. The company has added two storefront lo
launched a new marketing campaign, which is estimated to bring in 20,000 new customers over the next 6 months.
The company expects this expansion will require an additional $1,000,000 of capital and generate an additional $600,000
The options are:
1) Issuing an additional $1,000,000 of 10%, 100-par convertible preferred stock (same class as is currently outstanding)
2) Issue an additional $1,000,000 of 8% convertible bonds (same terms as the existing issue)
3) $500,000 each of preferred stock and bonds
l balance workbook (red tab)
epare the necessary adjusting entry.
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e deferred tax.
pproved has been a C Corp since the
l, 5% state).
as added two storefront locations and
e next 6 months.
te an additional $600,000 of after-tax profit.
is currently outstanding)
Cash
Marketable Securities
Accounts Receivable
Baking Supplies
Merchandise Inventory
Prepaid Rent
Prepaid Insurance
Misc. Supplies
Land
Building
Baking Equipment
PEYTON APPROVED
TRIAL BALANCE
As of December 31, 2017
Dr
Cr
1,488,999.34
5,500,000.00
7,092,495.88
1,605,098.52
128,152.63
71,877.07
207,834.14
17,647.42
250,000.00
1,250,000.00
2,254,140.00
Accumulated Depreciation
Patent
Accounts Payable
Wages Payable
Interest Payable
Current Portion of Bonds Payable
Income Taxes Currently Payable
Accrued Pension Liability
Accrued Employees Health Insurance
Lease Liability
Deferred Tax Liability
Bonds Payable
Preferred Stock
Common Stock
Beginning Retained earnings
Dividends – Preferred
50,000.00
Dividends – Common
5,250,000.00
Bakery Sales
Merchandise Sales
Cost of Goods Sold – Baked
10,954,907.36
Cost of Goods Sold – Merchandise
88,994.79
Rent Expense
1,576,731.95
Wages Expense
2,604,526.23
Misc. Supplies Expense
263,224.56
Repairs and Maintenance
47,353.05
Business License Expense
211,757.65
Misc. Expense
141,171.08
328,282.00
1,555,212.85
250,203.31
21,888.22
1,000,000.00
1,042,118.16
4,000,000.00
500,000.00
1,750,000.00
2,213,122.59
33,881,157.15
124,795.80
Depreciation Expense
Insurance Expense
Advertising Expense
Interest Expense
Telephone Expense
Pension Expense
Retired Employees Health Ins.
Patent Amortization
634,520.00
112,937.69
160,413.49
484,703.27
50,821.34
Unrealized Gain/(Loss) on Marketable Securities Held for Sale
Income Taxes
Deferred tax Expense
4,168,472.62
46,666,780.08
46,666,780.08
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
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Adjusting entries
Dr
Cr
Dr
1,488,999.34
5,500,000.00
7,092,495.88
1,605,098.52
128,152.63
71,877.07
207,834.14
17,647.42
250,000.00
1,250,000.00
2,254,140.00
Cr
328,282.00
1,555,212.85
250,203.31
21,888.22
1,000,000.00
1,042,118.16
4,000,000.00
500,000.00
1,750,000.00
2,213,122.59
50,000.00
5,250,000.00
33,881,157.15
124,795.80
10,954,907.36
88,994.79
1,576,731.95
2,604,526.23
263,224.56
47,353.05
211,757.65
141,171.08
634,520.00
112,937.69
160,413.49
484,703.27
50,821.34
4,168,472.62
–
–
46,666,780.08
46,666,780.08
milestone 1
milestone 1
milestone 1
milestone 2
milestone 2
milestone 2
final
final
INSTRUCTIONS FOR MILESTONE 2 (Due Week 5)
IMPORTANT NOTE:
Make sure to completely review the Rubric for Milestone 2
Use the data from this Milestone and begin working on your final presentation due in Week 7
ITEMS TO COMPLETE FOR THIS MILESTONE:
GENERAL
In preparation of the annual audit, make calculations (green tab) and prepare appropriate adjusting entries and post to t
workbook (red tab)
CAPITAL LEASES
Calculate capital lease obligations
Prepare appropriate adjusting entries
PENSION PAYOUTS
Calculate pension liability
Calculate health insurance liability
ADJUSTING ENTRIES
Prepare adjusting entries for capital lease obligations
Prepare adjusting entries for pension payouts
FINANCIAL INFORMATION FOR THIS MILESTONE
Postretirement Benefits
Peyton Approved has revised its postretirement plan. It will now provide health insurance to retired employees. Managem
that you report the short- and long-term financial implications of this.
• The company is currently employing 60, and actuaries estimate that the company has a pension liability of $107,04
• The estimated cost of retired employees’ health insurance is $43,718.91.
• Prepare adjusting entries for the pension liability and the health insurance liability
Leases
• Six ovens were rented on December 31, with $20,000 charged to rent expense. The lease runs for 6 years with an i
rate of 5%. At the end of the 6 years, Peyton will own them. Make any necessary adjusting entries.
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usting entries and post to the trial balance
red employees. Management has requested
pension liability of $107,041.70.
e runs for 6 years with an implicit interest
entries.
Capital Leases
Pension payouts
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ACC309 – Intermediate Accounting III
INSTRUCTIONS FOR FINAL (Due Week 7)
IMPORTANT NOTE:
Make sure to completely review the Rubric for Final Project
This page contains new information the must be included in the final project but has not been in milestone 1 or milestone
ITEMS TO COMPLETE FOR THIS MILESTONE:
GENERAL
In preparation of the annual audit, prepare appropriate adjusting entries and post to the trial balance workbook (red tab
adjusted trial balance and the preliminary 2017 statements (yellow tabs) to prepare revised financial statements that are aud
the impact on earnings per share that the expansion options will cause. (Orange tabs)
ADJUSTING ENTRIES
Prepare appropriate adjusting entries for patent
Prepare appropriate adjusting entries for capitalization of machine repair
ADJUSTED TRIAL BALANCE
Prepare the adjusted trial balance
REVISED FINANCIAL STATEMENTS
Prepare a revised income statement – include comprehensive income
Prepare a revised retained earnings statement
Prepare a revised balance sheet
EARNINGS PER SHARE
Determine the impact on earnings per share caused by each expansion plan option
NOTES TO THE FINANCIAL STATEMENTS – Prepare in a Word document – see the rubric for final project
A. Compose appropriate footnotes within a statement of comprehensive income in accordance with applicable accoun
such as GAAP, International Financial Reporting Standards, and SEC, as applicable.
MANAGEMENT BRIEF – Prepare in a Word document – see the rubric for final project
I. Evaluate the company’s current performance based on the outcomes of relevant ratio analysis.
J. Discuss types of accounting changes encountered and when retrospective and prospective approaches should be us
K. Predict the impact of new credit policies or a change in product or markets based on relevant ratio analysis.
L. Discuss relevant accounting standards for informing the company’s financial reporting strategies.
M. Explain how the four-step process was used for effectively correcting and reporting errors in the revision process.
FINANCIAL INFORMATION FOR THIS MILESTONE
Stockholder Equity / Earnings per share
Peyton Approved prides itself on transparency with shareholders and investors. The company has added two storefront lo
launched a new marketing campaign, which is estimated to bring in 20,000 new customers over the next 6 months.
The company expects this expansion will require an additional $1,000,000 of capital and generate an additional $600,000 o
The options are:
1) Issuing an additional $1,000,000 of 10%, 100-par convertible preferred stock (same class as is currently outstanding
2) Issue an additional $1,000,000 of 8% convertible bonds (same terms as the existing issue)
3) $500,000 each of preferred stock and bonds
Other Items
• On December 31, 20XX, the company repaired a packaging machine at cost of $27,000.00. It is expected that the r
the life of the machine by four years. No depreciation is necessary this year.
• The company spent $50,000 to obtain and defend a patent for its formula for dog treats. The patent took effect on
provides 20 years of protection. The $50,000 amount was incorrectly charged to Misc. Expense
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n milestone 1 or milestone 2
balance workbook (red tab). Use the
al statements that are audit ready. Calculate
nce with applicable accounting standards,
approaches should be used.
ant ratio analysis.
in the revision process.
s added two storefront locations and
e next 6 months.
e an additional $600,000 of after-tax profit.
as is currently outstanding)
0. It is expected that the repair will extend
The patent took effect on 1/1/20XX and
nse
Peyton Approved
Balance Sheet
As of December 31, 20XX
Assets
Current Assets:
Cash
Marketable Securities
Accounts Receivable
Baking Supplies
Merchandise Inventory
Prepaid Rent
Prepaid Insurance
Misc. Supplies
Long Term/Fixed Assets:
Land
Building
Baking Equipment
Accumulated Depreciation
Net Fixed assets
Liabilities and Owners’ Equity
Current Liabilities:
Accounts Payable
1,555,212.85
Wages Payable
250,203.31
Interest Payable
21,888.22
Current Portion of Bonds Payable
1,000,000.00
Income taxes currently payable
1,042,118.16
1,488,999.34
5,500,000.00
7,092,495.88
1,605,098.52
128,152.63
71,877.07
207,834.14
17,647.42
Total Current Assets
16,112,105.00
Total Current Liabilities
Long Term Liabilities:
Bonds Payable 10%, 20 year
250,000.00
1,250,000.00
2,254,140.00
-328,282.00
3,425,858.00
19,537,963.00
3,869,422.54
4,000,000.00
Total Long Term Liabilities:
4,000,000.00
Total Liabilities:
7,869,422.54
Preferred Stock – (10,000 authorized,
5,000 issued, 10%, $100 par value)
Common Stock – (2,000,000 shares
authorized, 1,750,000 issued, $1 par)
Retained Earnings
Total Assets:
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500,000.00
1,750,000.00
9,418,540.46
Total Equity
11,668,540.46
Total Liabilities & Equity
19,537,963.00
Peyton Approved
Income Statement
For Year Ended 12/31/20XX
Bakery Sales
Merchandise Sales
Total Revenues
Cost of Goods Sold – Baked
Cost of Goods Sold – Merchandise
Total Cost of Goods Sold
Gross Profit
$ 33,881,157.15
124,795.80
34,005,952.95
10,954,907.36
88,994.79
11,043,902.15
22,962,050.80
Operating Expenses:
Rent Expense
Wages Expense
Misc. Supplies Expense
Repairs and Maintenance
Business License Expense
Misc. Expense
Depreciation Expense
Insurance Expense
Advertising Expense
Interest Expense
Telephone Expense
Total Operating Expenses:
Earnings before Income Tax
Income Taxes
Net Income
1,576,731.95
2,604,526.23
263,224.56
47,353.05
211,757.65
141,171.08
634,520.00
112,937.69
160,413.49
484,703.27
50,821.34
6,288,160.31
16,673,890.49
4,168,472.62
12,505,417.87
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16,675,390.49
4,168,847.62
Peyton Approved
Statement of Retained Earnings
For Year Ended 12/31/20XX
Beginning Balance:
plus Net Income
$ 2,213,122.59
12,505,417.87
less Dividends: Preferred
50,000.00
Common
5,250,000.00
Ending Balance
$ 9,418,540.46
$
9,418,540.46
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Peyton Approved
Income Statement
For Year Ended 12/31/20XX
Bakery Sales
Merchandise Sales
Total Revenues
Cost of Goods Sold – Baked
Cost of Goods Sold – Merchandise
Total Cost of Goods Sold
Gross Profit
Operating Expenses:
Rent Expense
Wages Expense
Misc. Supplies Expense
Repairs and Maintenance
Business License Expense
Misc. Expense
Depreciation Expense
Insurance Expense
Advertising Expense
Interest Expense
Telephone Expense
Pension Expense
Retired Employees Health Ins.
Patent Amortization
Total Operating Expenses:
Operating Income
Income Taxes
Deferred tax Expense
Total Tax Expense
Net Income
Unrealized Gain/(Loss) on Marketable Securities Held for Sale
Comprehensive Income
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Peyton Approved
Statement of Retained Earnings
For Year Ended 12/31/20XX
Beginning Balance:
plus Comprehensive Income
less Dividends: Preferred
Common
Ending Balance
0
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Peyton Approved
Balance Sheet
As of December 31, 20XX
Assets
Current Assets:
Cash
Marketable Securities
Accounts Receivable
Baking Supplies
Merchandise Inventory
Prepaid Rent
Prepaid Insurance
Misc. Supplies
Li
Accounts Payable
Wages Payable
Interest Payable
Current Portion of Bo
Income taxes current
Accrued Pension Liab
Accrued Employees H
Lease Liability
Contingent Liability Deferred Tax Liability
Total Current Assets
Long Term/Fixed Assets:
Land
Building
Baking Equipment
Accumulated Depreciation
Net Fixed assets
Bonds Payable 10%,
Patent Net of Amortization
Preferred Stock – (10
5,000 issued, 10%
Common Stock – (2,0
authorized, 1,750,0
Retained Earnings
Total Assets:
ved
et
1, 20XX
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Liabilities and Owners’ Equity
Current Liabilities:
Accounts Payable
Wages Payable
Interest Payable
Current Portion of Bonds Payable
Income taxes currently payable
Accrued Pension Liability
Accrued Employees Health Insurance
Lease Liability
Contingent Liability – Lawsuit
Deferred Tax Liability
Total Current Liabilities
Long Term Liabilities:
Bonds Payable 10%, 20 year
Total Long Term Liabilities:
Total Liabilities:
Preferred Stock – (10,000 authorized,
5,000 issued, 10%, $100 par value)
Common Stock – (2,000,000 shares
authorized, 1,750,000 issued, $1 par)
Retained Earnings
Total Equity
Total Liabilities & Equity
Peyton Approved
Earnings per Share
For Year Ended 12/31/20XX
Net Income
Less: Preferred Dividends
Earnings Available to Common Shareholders
Common Shares Outstanding
Basic EPS
If all preferred shares are converted:
Net Income
Additional Common Shares
Common Shares Outstanding after conversion
EPS if preferred shares converted
Preferred shares are antidilutive
If all bonds are converted:
Net Income
Less: Preferred Dividends
Add back interest on bonds, net of income tax
Earnings Available to Common Shareholders
Additional Common Shares
Common Shares Outstanding after conversion
Fully diluted EPS
Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate
that it will enable them to earn an additional $600,000 after tax. What would be the impact on
earnings per share if the raise the $1,000,000 by:
a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where shar
can be coverted into 10 shares of Peyton common stock?
b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can be converted into
5 shares of Peyton common stock?
c) $500,000 of each of the above?
Net Income
Less: Preferred Dividends
Earnings Available to Common Shareholders
Common Shares Outstanding
Basic EPS
a
If all preferred shares are converted:
Net Income
Additional Common Shares
Common Shares Outstanding after conversion
EPS if preferred shares converted
Preferred shares are antidilutive
b
If all bonds are converted:
Net Income
Less: Preferred Dividends
Add back interest on bonds, net of income tax
Earnings Available to Common Shareholders
Additional Common Shares
Common Shares Outstanding after conversion
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