ACC 309 Final Project ScenarioPeyton Approved
Overview
Imagine that you are working as a financial accountant for Peyton Approved, and you have been
charged with revising its financial information. The company has experienced tremendous growth in the
past three years, and it is now a well-known bakery chain for pet products. They have become a publicly
traded company and have several locations that they deliver to regionally.
You will find the company’s financial information in the Peyton Approved Balance Sheet and Income
Statement. This document will need revisions and appropriate notes added in order to prepare for the
year-end audit accordingly. In addition to ensuring that the balance sheet is ready for the year-end
audit, you will address other major areas of need, including:
Assessing tax implications
Evaluating and explaining stockholder equity
Accounting for postretirement benefits (The amounts would be determined by actuaries.)
Assessing impacts of leases
Peyton Approved Financial Information
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 adjusting entry.
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 since the 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 locations and 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 of after-tax profit. 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
Determine the impact on earnings per share for each option.
Postretirement Benefits
Peyton Approved has revised its postretirement plan. It will now provide health insurance to retired
employees. Management has requested 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 $107,041.70.
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 implicit interest rate of 5%. At the end of the 6 years, Peyton will own them.
Make any necessary adjusting entries.
Other Items
On December 31, 20XX, the company repaired a packaging machine at cost of $27,000.00. It is
expected that the repair will extend 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 1/1/20XX and provides 20 years of protection. The $50,000 amount was
incorrectly charged to Misc. Expense
Make any necessary adjusting entries.
Southern New Hampshire University
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 PROJECT (Due in Module 7)
Instructions Milestone 2
1.
Capital Leases
Instructions Final Project
1.
Calculate capital lease
obligations
2
See rubric for written portion
3
Prepare adjusting entries for:
Patent
Major repair capitalization
Pensions
Calculate pension payouts
Adjusting entries
2
3
Prepare adjusting entries for:
Capital leases
Pension payouts
See rubric for written portion
Adjusting Entries
Adjusted Trial Balance
Complete adjusted trial balance
Revised Financial
Statements
Prepare revised financial
Prepare a statement of
4
Earnings per Share
Determine the impact of
See rubric for written portion
ue in Module 7)
trial balance
Southern New Hampshire University
ACC309 – Intermediate Accounting III
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 tab)
ADJUSTING ENTRIES
Prepare adjusting entries for unrealized loss
Prepare adjusting entries for tax issues
MANAGEMENT BRIEF – Prepare in a Word document – see the rubric for milestone 1
A. Identify sources of other comprehensive income not included in net income.
B. Explain rationale for the inclusion as comprehensive income (as opposed to net income) of nondisclosure within no
C. Evaluate impacts of company goals and finances for their implications on stockholder equity, using financial informa
D. Evaluate impacts of company goals and finances for their implications on retained earnings per share, using financia
E. Explain the impact of issuing preferred stock or debt for determining changes to equity structures.
F. Assess the impact of changes to current tax structure for articulating changes relevant to the company.
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 adjusting en
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 since t
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
profit. 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
HOME
nce workbook (red tab)
of nondisclosure within notes.
uity, using financial information to support claims.
ngs per share, using financial information to support claims.
the company.
the necessary adjusting entry.
ed has been a C Corp since the beginning of
has added two storefront locations and
he next 6 months.
ate an additional $600,000 of after-tax
as 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
46,010,216.08
milestone 1
(1)
milestone 1
(2)
milestone 1
(3)
(4)
(5)
(6)
(7)
(8)
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Adjusting entries
Dr
Cr
265,000.00
106,590.00
27,000.00
Dr
1,488,999.34
5,235,000.00
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
2,387,730.00
Cr
(328,282.00)
50,000.00
2,500.00
47,500.00
1,555,212.85
250,203.31
21,888.22
1,000,000.00
1,042,493.16
107,041.70
43,718.91
106,590.00
52,325.25
4,000,000.00
500,000.00
1,750,000.00
2,213,122.59
375.00
107,041.70
43,718.91
106,590.00
52,325.25
50,000.00
5,250,000.00
33,881,157.15
124,795.80
20,000.00
27,000.00
50,000.00
10,954,907.36
88,994.79
1,556,731.95
2,604,526.23
263,224.56
20,353.05
211,757.65
91,171.08
20,000.00
654,520.00
112,937.69
160,413.49
484,703.27
50,821.34
107,041.70
43,718.91
2,500.00
265,000.00
4,168,847.62
52,325.25
107,041.70
43,718.91
2,500.00
265,000.00
375.00
52,325.25
674,550.86
674,550.86
46,976,830.94
46,320,266.94
Unrealized loss on Marketable Securities: Held for sale
Marketable Securities: Held for sale
Income Taxes
Income Taxed currently Payable
Deferred Tax Liabilities
Deferred Tax Expense
265,000.00
375.00
52,325.25
milestone 2
milestone 2
final
final
265,000.00
375.00
52,325.25
Southern New Hampshire University
HOME
ACC309 – Intermediate Accounting III
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 the trial balance
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
MANAGEMENT BRIEF – Prepare in a Word document – see the rubric for milestone 2
A. Explain the implications of capital lease based on how it relates to the company’s equipment usage.
B. Explain how postretirement plans will impact the company financially in the short and long term, using examples from the
accounting workbook to support claims.
FINANCIAL INFORMATION FOR THIS MILESTONE
Postretirement Benefits
Peyton Approved has revised its postretirement plan. It will now provide health insurance to retired employees. Management has
requested 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 $107,041.70.
· 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 implicit interest rate of
5%. At the end of the 6 years, Peyton will own them. Make any necessary adjusting entries.
Capital Leases
Pension payouts
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Southern New Hampshire University
HOME
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 2
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). Use the
adjusted trial balance and the preliminary 2017 statements (yellow tabs) to prepare revised financial statements that are audit ready.
Calculate 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 accounting standards, 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 used.
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 locations and
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 of after-tax
profit. 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 repair will extend 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 1/1/20XX and
provides 20 years of protection. The $50,000 amount was incorrectly charged to Misc. Expense
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:
HOME
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
HOME
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
HOME
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
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
Total Current Assets
Long Term/Fixed Assets:
Land
Building
Baking Equipment
Accumulated Depreciation
Net Fixed assets
Patent Net of Amortization
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 Assets:
Total Liabilities & Equity
ties and Owners’ Equity
h Insurance
m Liabilities:
authorized,
00 par value)
00 shares
ssued, $1 par)
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Peyton Approved
Earnings per Share
For Year Ended 12/31/20XX
HOME
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 share
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
ACC 309 Final Project Guidelines and Rubric
Overview
In the accounting field, you will often be expected to both enter calculations accurately and articulate what this information means to internal and external
stakeholders. In addition, you will be expected to propose financial solutions when a company is faced with a policy change, or when the company’s regulations
change. For this project, imagine that you have just started in a new role as a financial accountant preparing for a year-end audit. In addition, you are charged
with showing the financial impacts of the company’s recent initiatives. You will revise year-end financial statements to reflect these changes, compose notes to
the financial statements, and compose an executive summary to explain the impacts to stakeholders. You will create these documents based on information in
the Final Project Scenario and Final Project Workbook.
In this assignment, you will demonstrate your mastery of the following course competencies:
ACC-309-01: Revise financial statements in accordance with applicable rules and regulations
ACC-309-02: Analyze the financial impact of changes to an organization by internal and external factors
ACC-309-03: Demonstrate ethical conduct in the process of correcting accounting records
Prompt
Specifically, the following critical elements must be addressed. Most of the critical elements align with a particular course competency (shown in brackets).
I.
Workbook: Calculate relevant ratios, payouts, obligations, and prepare appropriate adjusting entries and revised financial statements. Be sure to
complete all tabs in the spreadsheet.
A. Calculate capital lease obligations for determining debt and depreciation. [ACC-309-02]
B. Calculate pension payouts to determine the company’s financial obligations. [ACC-309-01]
C. Prepare appropriate adjusting entries. [ACC-309-01]
D. Complete the Adjusted Trial Balance. [ACC-309-01]
E. Prepare revised financial statements for year-end audit that flow logically within the document. [ACC-309-01]
F. Prepare a statement of comprehensive income to ensure alignment with applicable rules and regulations. [ACC-309-01]
G. Determine the impact on earnings per share [ACC-309-02]
H. Prepare financial statements for year-end audit with appropriate changes that flow logically within the document. [ACC-309-01]
1
II.
Notes to the Financial Statements
A. Compose appropriate footnotes within a statement of comprehensive income in accordance with applicable accounting standards, such as
GAAP, International Financial Reporting Standards, and SEC, as applicable. [ACC-309-03]
III.
Executive Summary: Compose a report that appropriately communicates the impact of revisions to stakeholders.
A. Identify sources of other comprehensive income not included in net income. [ACC-309-01]
B. Explain rationale for inclusion as comprehensive income (as opposed to net income) of nondisclosure within notes. [ACC-309-02]
C. Evaluate impacts of company goals and finances for their implications on stockholder equity, using financial information to support claims.
[ACC-309-02]
D. Evaluate impacts of company goals and finances for their implications on retained earnings per share, using financial information to support
claims. [ACC-309-02]
E. Explain the impact of issuing preferred stock or debt for determining changes to equity structures. [ACC-309-02]
F. Assess the impact of changes to current tax structure for articulating changes relevant to the company. [ACC-309-02]
G. Explain the implications of capital lease based on how it relates to the company’s equipment usage. [ACC-30-02]
H. Explain how postretirement plans will impact the company financially in the short and long term, using examples from the workbook to support
claims. [ACC-309-02]
I. Evaluate the company’s current performance based on the outcomes of relevant ratio analysis. [ACC-309-02]
J. Discuss types of accounting changes encountered and when retrospective and prospective approaches should be used. [ACC-309-02]
K. Predict the impact of new credit policies or a change in product or markets based on relevant ratio analysis. [ACC-309-02]
L. Discuss relevant accounting standards for informing the company’s financial reporting strategies. [ACC-309-03]
M. Explain how the four-step process was used for effectively correcting and reporting errors in the revision process. [ACC-309-03]
Milestones
Milestone One
In Module Three, you will develop a portion of the workbook and a brief memo to management explaining the impacts to stockholder equity and the impact of
tax structures. This milestone will be graded with the Milestone One Rubric.
Milestone Two
In Module Five, you will develop a portion of the workbook and a brief memo to management explaining the impacts of accounting for postretirement benefits
and revision processes. This milestone will be graded with the Milestone Two Rubric.
Final Project Submission: Workbook, Notes to the Financial Statements, and Executive Summary
In Module Seven, you will submit your final project. It should be a complete, polished artifact containing all of the critical elements of the final product. It should
reflect the incorporation of feedback gained throughout the course. This submission will be graded with the Final Project Rubric.
2
In addition to revising your milestone work, make sure that you include the following elements from the prompt above, which were not included in the
milestones:
I.
Workbook
A. Prepare appropriate adjusting entries and complete the Adjusted Trial Balance. [ACC-309-01]
B. Prepare revised financial statements for year-end audit that flow logically within the document. [ACC-309-01]
C. Determine the impact on earnings per share [ACC-309-02]
II.
Notes to the Financial Statements
A. Compose appropriate footnotes within a statement of comprehensive income in accordance with applicable accounting standards, such as
GAAP, International Financial Reporting Standards, and SEC, as applicable. [ACC-309-03]
III.
Executive Summary
A. Evaluate the company’s current performance based on the outcomes of relevant ratio analysis. [ACC-309-02]
B. Discuss types of accounting changes encountered and when retrospective and prospective approaches should be used. [ACC-309-02]
C. Predict the impact of new credit policies or a change in product or markets based on relevant ratio analysis. [ACC-309-02]
D. Discuss relevant accounting standards for informing the company’s financial reporting strategies. [ACC-309-03]
E. Explain how the four-step process was used for effectively correcting and reporting errors in the revision process. [ACC-309-03]
Final Project Rubric
Guidelines for Submission: Your workbook must be submitted as a MS Excel Document, and your Executive Summary must be 2-3 pages in length and must be
written in APA format. Use double spacing, 12-point Times New Roman font, and one-inch margins.
Critical Elements
Exemplary
Proficient
Needs Improvement
Not Evident
Value
Workbook: Capital
Lease Obligations
[ACC-309-02]
Calculate capital lease
obligations for determining debt
and depreciation (100%)
Calculates capital lease
obligations, but calculations are
inaccurate or incomplete (55%)
Does not identify sources of
other comprehensive income not
included in net income (0%)
3.12
Workbook: Pension
Payouts
[ACC-309-01]
Calculates pension payouts for
determining the company’s
financial obligations (100%)
Calculates pension payouts, but
calculations are inaccurate or
incomplete (55%)
Does not calculate pension
payouts (0%)
5.28
Workbook: Adjusting
Entries
[ACC-309-01]
Prepare appropriate adjusting
entries (100%)
Prepares appropriate adjusting
entries, but calculations are
inaccurate or incomplete (55%)
Does prepare adjusting entries
(0%)
5.28
3
Workbook: Adjusted
Trial Balance
[ACC-309-01]
Completes the Adjusted Trial
Balance (100%)
Completes the Adjusted Trial
Balance, but calculations are
inaccurate or incomplete (55%)
Does not complete adjusted trial
balance (0%)
5.28
Workbook: Revised
Financial Statements
[ACC-309-01]
Prepares revised financial
statements for year-end audit
that flow logically within the
document. (100%)
Prepares revised financial
Does not prepare revised
statements for year-end audit,
financial statements for yearend
but the statements do not flow audit (0%)
logically within the document, or
revisions contain inaccuracies
(55%)
5.28
Workbook: Statement
of Comprehensive
Income
[ACC-309-01]
Prepares a statement of
comprehensive income to ensure
alignment with applicable rules
and regulations (100%)
Prepares a statement of
Does not prepare a statement of
comprehensive income, but
comprehensive income (0%)
statement does not align with
applicable rules and regulations,
contains inaccuracies or is
missing key elements (55%)
5.28
Determines the impact on
earnings per share (100%)
Determines the impact on
earnings per share, but
calculations are inaccurate or
incomplete (55%)
Does not determine the impact
on earnings per share (0%)
3.12
Workbook:
Earnings per Share
[ACC-309-02]
Notes to Financial
Statements:
Footnotes
[ACC-309-03]
Meets proficient criteria and
footnotes included demonstrate
a keen grasp of applicable
accounting standards (100%)
Composes appropriate footnotes
within a statement of
comprehensive income in
accordance with applicable
accounting standards, such as
GAAP, International Financial
Reporting Standards, and SEC, as
applicable (85%)
Composes appropriate footnotes Does not compose appropriate
within a statement of
footnotes within a statement of
comprehensive income in
comprehensive income (0%)
accordance with applicable
accounting standards, such as
GAAP, International Financial
Reporting Standards, and SEC, as
applicable, but footnotes lack
detail, are illogical or are missing
key elements (55%)
10.56
Executive Summary:
Comprehensive
Income
[ACC-309-01]
Meets proficient criteria, and
explanation demonstrates a
sophisticated awareness of topic
(100%)
Explains rationale for inclusion as
comprehensive income or other
comprehensive income (as
opposed to net income) of
nondisclosure within notes (85%)
Explains rationale for inclusion as Does not explain rationale for
comprehensive income (as
inclusion as comprehensive
opposed to net income) of
income (0%)
nondisclosure within notes, but
notes are inaccurate or missing
key elements (55%)
5.28
4
Executive Summary:
Stockholder Equity
[ACC-309-02]
Meets proficient criteria, and
financial information used to
support claims demonstrates a
complex grasp of implications on
stockholder equity and retained
earnings per share (100%)
Describes impacts of company
goals and finances for their
implications on stockholder
equity, including retained
earnings per share, using
financial information to support
claims (85%)
Describes impacts of company
goals and finances for their
implications on stockholder
equity, but explanation or
information used to support
claims is illogical or contains
inaccuracies (55%)
Does not evaluate impacts of
company goals and finances for
their implications on stockholder
equity (0%)
3.12
Executive Summary:
Preferred Stock or
Debt
[ACC-309-02]
Meets proficient criteria and
explanation demonstrates a
sophisticated awareness of the
impact of issuing preferred stock
or debt for determining changes
to equity structures (100%)
Explains the impact of issuing
preferred stock or debt for
determining changes to equity
structures (85%)
Explains the impact of issuing
preferred stock or debt for
determining changes to equity
structures, but explanation is
cursory or illogical (55%)
Does not explain the impact of
issuing preferred stock or debt
(0%)
3.12
Executive Summary: Meets proficient criteria and
Current Tax Structure assessment of relevant changes
[ACC-309-02]
demonstrates a sophisticated
awareness of taxation impacts
(100%)
Assesses the impact of changes
to current tax structure for
articulating changes relevant to
the company (85%)
Assesses the impact of changes
to current tax structure for
articulating changes relevant to
the company, but assessment is
cursory or illogical (55%)
Does not assess the impact of
changes to current tax structure
(0%)
3.12
Executive Summary:
Capital Lease
[ACC-309-02]
Explains the implications of
capital lease based on how it
relates to the company’s
equipment usage (85%)
Explains the implications of
Does not explain the implications
capital lease based on how it
of capital lease (0%)
relates to the company’s
equipment usage, but
explanation is cursory or illogical
(55%)
3.12
Executive Summary: Meets proficient criteria and
Post-retirement Plans examples used to support ideas
[ACC-309-02]
demonstrate a nuanced
understanding of how post
retirement plans will impact the
company financially (100%)
Explains how post-retirement
plans will impact the company
financially short and long-term,
using examples from the balance
sheet to support claims (85%)
Explains how post retirement
plans will impact the company
financially, but examples
provided are cursory or illogical
(55%)
3.12
Executive Summary: Meets proficient criteria and
Current Performance evaluation and supporting
[ACC-309-02]
information demonstrates a
nuanced understanding of topics
(100%)
Evaluates the company’s current
performance based on the
outcomes of relevant ratio
analysis (85%)
Evaluates the company’s current Does not evaluate the company’s
performance, but use of relevant current performance (0%)
ratio analysis to support
evaluation is cursory, illogical or
inaccurate (55%)
Meets proficient criteria and
explanation demonstrates a
sophisticated awareness of the
implications of capital lease
(100%)
5
Does not explain how postretirement plans will impact the
company (0%)
3.12
Executive Summary:
Retrospective and
Prospective
Approaches
[ACC-309-02]
Meets proficient criteria and
discussion of changes
encountered and retrospective
and prospective approaches
demonstrates a nuanced
understanding of accounting
approaches (100%)
Discusses types of accounting
changes encountered for
informing when retrospective
and prospective approaches
should be used (85%)
Discusses types of accounting
changes encountered, but
explanation of when
retrospective and prospective
approaches should be used is
cursory, illogical or contains
inaccuracies (55%)
Executive Summary:
New Credit Policies
[ACC-309-02]
Meets proficient criteria and
relevant ratio analysis used
demonstrates a sophisticated
awareness of impacts on credit
policies, and change in product
or markets (100%)
Predicts the impact of new credit
policies, change in product or
markets based on relevant ratio
analysis (85%)
Predicts the impact of new credit Does not predict the impact of
policies, change in product or
new credit policies or change in
markets, but relevant ratio
products or markets (0%)
analysis used is illogical or
contains inaccuracies (55%)
3.12
Discusses relevant accounting
standards for informing the
company’s financial reporting
strategies (85%)
Discusses relevant accounting
standards for informing the
company’s financial reporting
strategies, but application is
cursory illogical or contains
inaccuracies (55%)
10.56
Explains how the four-step
Does not explain how the four
process was used for correcting step process was used to correct
and reporting errors, but
and report errors (0%)
explanation is cursory, illogical or
contains inaccuracies (55%)
Executive Summary: Meets proficient criteria and
Accounting Standards Discussion of relevant accounting
[ACC-309-03]
standards demonstrates
sophisticated awareness of how
accounting standards apply to
financial reporting (100%)
Executive Summary:
Four-Step Process
[ACC-309-03]
Meets proficient criteria and
explanation of how the four step
process was used demonstrates
a nuanced understanding of the
process (100%)
Explains how the four step
process was used for effectively
correcting and reporting errors in
the revision process (85%)
Articulation of
Response
Submission has no major errors
related to, grammar, spelling,
syntax, or organization (100%)
Submission has few minor errors Submission has several errors
related to organization, grammar related to, grammar, spelling,
and style (85%)
syntax, or organization (55%)
6
Does not discuss types of
accounting changes encountered
(0%)
Does not discuss relevant
accounting standards (0%)
3.12
10.56
Submission has major errors
related to, grammar, spelling,
syntax, or organization that
negatively impact readability and
articulation of main ideas (0%)
5.44
Total
100%
ACC 309 Milestone Two Guidelines and Rubric
Overview: For Milestone Two, which is due in Module Five, you will develop a portion of the workbook and a brief memo to management explaining the
impacts of accounting for leases and postretirement benefits. You will build on this milestone in subsequent modules to create the workbook and executive
summary portions of your final project.
Prompt: Using your review of the Final Project Scenario document, begin your workbook and develop the second part of your executive summary, including the
impacts of leases and postretirement benefits.
Note: Milestone Two is a draft of some of the critical elements of the final project.
Specifically, the following critical elements must be addressed:
I.
Workbook
A. Calculate capital lease obligations for determining debt and depreciation.
B. Calculate pension payouts to determine the company’s financial obligations.
C. Prepare adjusting entries for postretirement benefits and capital lease obligations.
II.
Management Brief: Compose a report that appropriately communicates the impact of revisions to stakeholders.
A. Explain the implications of capital lease based on how it relates to the company’s equipment usage.
B. Explain how postretirement plans will impact the company financially in the short and long term, using examples from the accounting workbook
to support claims.
Rubric
Guidelines for Submission: Your workbook must be submitted as a Microsoft Excel document, and your management brief should be a 1- to 2-page Microsoft
Word document with double spacing, 12-pt. Times New Roman font, and one-inch margins.
Critical Elements
Workbook: Capital
lease obligations
Proficient (100%)
Needs Improvement (75%)
Not Evident (0%)
Value
Calculates capital lease
Calculates capital lease
Does not calculate capital lease
obligations for determining debt obligations for determining debt obligations
and depreciation
and depreciation, but
calculations are inaccurate
19
Workbook:
Pension Payouts
Calculates pension payouts to
determine the company’s
financial obligations
Calculates pension payouts to
determine the company’s
financial obligations, but
calculations are inaccurate
Does not calculate pension
payouts
19
Workbook:
Adjusting entries
Prepares adjusting entries for
postretirement benefits and
capital lease obligations
Prepares adjusting entries for
postretirement benefits and
capital lease obligations, but
entries prepared contain
inaccuracies
Does not prepare adjusting entries
19
Management Brief:
Capital Lease
Explains the implications of
capital lease based on how it
relates to the company’s
equipment usage
Explains the implications of
Explain the implications of capital
capital lease based on how it
lease
relates to the company’s
equipment usage, but
explanation is cursory or illogical
19
Management Brief:
Postretirement Plans
Explains how postretirement
plans will impact the company
financially in the short and long
term, using examples from the
accounting workbook to support
claims
Explains how postretirement
plans will impact the company
financially, but examples
provided are cursory or illogical
Does not explain how
postretirement plans will impact
the company
19
Articulation of
Response
Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization
Submission has major errors
related to citations, grammar,
spelling, syntax, or organization
that negatively impact
readability and articulation of
main ideas
Submission has critical errors
related to citations, grammar,
spelling, syntax, or organization
that prevent understanding of
ideas
5
Total
100%
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