Solution
Sumit answered on
Aug 15 2021
Instructions
Southern New Hampshire University
ACC309 - Intermediate Accounting III
MILESTONE 1 (Due in Module 3) MILESTONE 2 (Due in Module 5) FINAL PROJECT (Due in Module 7)
1. 1. 1.
Prepare adjusting entries for: Calculate capital lease obligations Prepare adjusting entries for:
Unrealized loss Patent
tax issues 2 Major repair capitalization
See ru
ic for written portion of milestone 1 Calculate pension payouts 2
Complete adjusted trial balance
3
3
Prepare adjusting entries for:
Capital leases
Pension payouts Prepare revised financial statements
Prepare a statement of comprehensive income - include on the revised income statement
See ru
ic for written portion of milestone 2 4
Determine the impact of expansion options on earnings per share
See ru
ic for written portion of the final project
Adjusting entries
xl/drawings/drawing1.xml#'Trial%20Balance%202017'!A1Capital Leases
xl/drawings/drawing1.xml#ContributionMarginAdjusting Entries
xl/drawings/drawing1.xml#'Trial%20Balance%202017'!A1Instructions Milestone 1
xl/drawings/drawing1.xml#'Instructions%20-%20Milestone%201'!A1Instructions Milestone 2
xl/drawings/drawing1.xml#'Instructions%20-Milestone%202'!A1Instructions Final Project
xl/drawings/drawing1.xml#'Instructions%20-%20final'!A1Pensions
xl/drawings/drawing1.xml#BreakevenAnalysisAdjusting entries
xl/drawings/drawing1.xml#'Trial%20Balance%202017'!A1Adjusted Trial Balance
xl/drawings/drawing1.xml#'Trial%20Balance%202017'!A1Revised Financial Statements
xl/drawings/drawing1.xml#'IS%202017%20Revised'!A1Earnings per Share
xl/drawings/drawing1.xml#EPS!A1
Instructions - Milestone 1
Southern New Hampshire University
ACC309 - Intermediate Accounting III
INSTRUCTIONS FOR MILESTONE 1 (Due Week 3)
IMPORTANT NOTE:
Make sure to completely review the Ru
ic 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 ru
ic 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 notes.
C. Evaluate impacts of company goals and finances for their implications on stockholder equity, using financial information to support claims.
D. Evaluate impacts of company goals and finances for their implications on retained earnings per share, using financial information to support claims.
E. Explain the impact of issuing prefe
ed stock or debt for determining changes to equity structures.
F. Assess the impact of changes to cu
ent 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 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 defe
ed 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
ing 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 prefe
ed stock (same class as is cu
ently outstanding)
2) Issue an additional $1,000,000 of 8% convertible bonds (same terms as the existing issue)
3) $500,000 each of prefe
ed stock and bonds
HOME
xl/drawings/drawing2.xml#Instructions!A1
Trial Balance 2017
PEYTON APPROVED
TRIAL BALANCE
As of December 31, 2017 Adjusting entries
Dr Cr Dr Cr Dr C
Cash 1,488,999.34 1,488,999.34
Marketable Securities 5,500,000.00 265,000.00 5,235,000.00
Accounts Receivable 7,092,495.88 7,092,495.88
Baking Supplies 1,605,098.52 1,605,098.52
Merchandise Inventory 128,152.63 128,152.63
Prepaid Rent 71,877.07 71,877.07
Prepaid Insurance 207,834.14 207,834.14
Misc. Supplies 17,647.42 17,647.42
Land 250,000.00 250,000.00
Building 1,250,000.00 1,250,000.00
Baking Equipment 2,254,140.00 101,498.00 2,382,638.00
27,000.00
Accumulated Depreciation 328,282.00 328,282.00
Patent 50,000.00 2,500.00 47,500.00
Accounts Payable 1,555,212.85 1,555,212.85
Wages Payable 250,203.31 250,203.31
Interest Payable 21,888.22 21,888.22
Cu
ent Portion of Bonds Payable 1,000,000.00 1,000,000.00
Income Taxes Cu
ently Payable 1,042,118.16 375.00 1,042,493.16
Accrued Pension Liability 107,041.70 107,041.70
Accrued Employees Health Insurance 43,718.91 43,718.91
Lease Liability 101,498.00 101,498.00
- 0
Defe
ed Tax Liability 52,325.25 52,325.25
Bonds Payable 4,000,000.00 4,000,000.00
Prefe
ed Stock 500,000.00 500,000.00
Common Stock 1,750,000.00 1,750,000.00
Beginning Retained earnings 2,213,122.59 2,213,122.59
Dividends - Prefe
ed 50,000.00 50,000.00
Dividends - Common 5,250,000.00 5,250,000.00
Bakery Sales 33,881,157.15 33,881,157.15
Merchandise Sales 124,795.80 124,795.80
Cost of Goods Sold - Baked 10,954,907.36 10,954,907.36
Cost of Goods Sold - Merchandise 88,994.79 88,994.79
Rent Expense 1,576,731.95 20,000.00 1,556,731.95
Wages Expense 2,604,526.23 2,604,526.23
Misc. Supplies Expense 263,224.56 263,224.56
Repairs and Maintenance 47,353.05 27,000.00 20,353.05
Business License...