ACC 308 Final Project Workbook
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Southern New Hampshire University
ACC 308 - Intermediate Accounting II
Note: This workbook contains instructions and financial information you will need to complete the Workbook portions of Milestones One and Two. For full instructions for the milestone and final project assignments, refer to the guidelines and ru
ic documents.
You can use the links below to navigate from this HOME tab to additional instructions and the worksheets for each milestone.
MILESTONE ONE
(Due in Module Three) MILESTONE TWO
(Due in Module Five) FINAL PROJECT
(Due in Module Seven)
Milestone One
Workbook Instructions Milestone Two
Workbook Instructions Note: The final project consists of co
ected work from Milestone One and Milestone Two. Incorporate the feedback you received from your instructor.
1. Trial Balance 1. Pro Forma Financial Statements
Using the Peyton Approved financial data, create: Using the given pro forma information, create:
Adjusting Entries Pro Forma Income Statement
Adjusted Trial Balance Pro Forma Balance Sheet
2. Revised Financial Statements 2. Notes to the Financial Statements
Note: This part of the project is submitted as a separate Word document. Refer to the Milestone Two Guidelines and Ru
ic document for submission guidelines.
Using the trial balance and preliminary financial statements, prepare: Your notes must contain the following:
Revised Balance Sheet A. Create appropriate notes as year-to-year documentation for managing depreciation, supplies, and inventory.
Revised Income Statement B. Create appropriate notes for long-term debt.
Revised Retained Earnings Statement
Revised Statement of Cash Flows
3. Ratio Analysis 3. Management Analysis Brief
Note: Refer to the Final Project Scenario for Peyton's ratio formulas. Note: This part of the project is submitted as a separate Word document. Refer to the Milestone Two Guidelines and Ru
ic document for submission guidelines.
Using the financial statements from 2015, 2016, and revised 2017, calculate the following ratios: Your management analysis
ief should explain financial information to management. Provide evidence from your accounting workbook to support your ideas where applicable.
Cu
ent Ratio (Working Capital) A. Discuss the impact of the pro forma financial statements for predicting ability to meet future expansion goals.
Quick Ratio B. Describe the implications of inventory costing, contingent liabilities, and revenue recognition.
A/R Turnover C. Identify potential issues in interpretation of financial information, providing examples to support your ideas.
Inventory Turnove
Gross Margin
Return on Sales
Return on Equity
Return on Assets
4. Management Analysis Brief
Note: This part of the project is submitted as a separate Word document. Refer to the Milestone One Guidelines and Ru
ic document for submission guidelines.
Your management analysis
ief should explain financial information to management. Provide evidence from your accounting workbook to support your ideas where applicable.
A. Assess the company’s financial health based on ratio analyses presented in the accounting workbook.
B. Compare ratio analysis to trends in financial ratios over time for illustrating their impact, providing examples to support your claims.
C. Summarize the effects of different compounding periods and interest rates on future value of money.
D. Explain how alignment to relevant regulations and ethical reporting influenced your accounting practices and notes, providing examples to support your claims.
Milestone One Instructions
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INSTRUCTIONS FOR MILESTONE ONE
(Due in Module Three)
Note: Make sure to completely review the Milestone One Guidelines and Ru
ic document.
Use the data from this milestone and begin working on your final project, due in Module Seven.
ITEMS TO COMPLETE FOR MILESTONE ONE:
The tabs to complete are linked below and colored blue for convenience.
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.
1. TRIAL BALANCE
Using the Peyton Approved financial data provided below:
A. Create the necessary adjusting journal entries. Use the REF column to reference the entry to each event.
B. Complete the adjusted trial balance.
Trial Balance 2017
2. REVISED FINANCIAL STATEMENTS
Peyton Approved's preliminary financial statements are provided in the yellow tabs.
Balance Sheet 2017
Income Statement 2017
Retained Earnings 2017
Cash Flow 2017
Using the preliminary financial statements and the Trial Balance 2017, prepare the following statements:
Balance Sheet
2017 Revised
Income Statement
2017 Revised
Retained Earnings Statement
2017 Revised
Statement of Cash Flows
2017 Revised
Note: Refer to Module Three resources for a refresher on statement of cash flows.
Peyton Approved's previous years' financial statements are provided in the orange tabs.
Balance Sheet 2015
Balance Sheet 2016
Income Statement 2016
3. RATIO ANALYSIS
Using the revised 2017 financial statements, 2016 financial statements, and 2015 financial statements, prepare a ratio analysis for Peyton Approved.
Note: Refer to the Final Project Scenario for Peyton's ratio formulas.
Ratio Analysis
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—goods of $3,000 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.
4. MANAGEMENT ANALYSIS BRIEF
Note: This part of the project is submitted as a separate Word document. Refer to the Milestone One Guidelines and Ru
ic document for submission guidelines.
Your management analysis
ief should explain financial information to management. Provide evidence from your accounting workbook to support your ideas where applicable.
A. Assess the company’s financial health based on ratio analyses presented in the accounting workbook.
B. Compare ratio analysis to trends in financial ratios over time for illustrating their impact, providing examples to support your claims.
C. Summarize the effects of different compounding periods and interest rates on future value of money.
D. Explain how alignment to relevant regulations and ethical reporting influenced your accounting practices and notes, providing examples to support your claims.
Trial Balance 2017
Milestone One
Workbook Instructions
PEYTON APPROVED
TRIAL BALANCE
As of December 31, 2017
Unadjusted trial balance Adjusting entries Adjusted trial balance
Dr Cr ref Dr Cr ref Dr C
Cash 67,520.04 67,520.04
Accounts Receivable 68,519.91 68,519.91
Other Receivable - Insurance - 0
Baking Supplies 15,506.70 15,506.70
Merchandise Inventory 1,238.07 1,238.07
Consignment Inventory - 0
Prepaid Rent 2,114.55 2,114.55
Prepaid Insurance 2,114.55 2,114.55
Misc. Supplies 170.49 170.49
Baking Equipment 14,000.00 14,000.00
Accumulated Depreciation 1,606.44 1,606.44
Customer Deposit - 0
Accounts Payable 20,262.11 20,262.11
Wages Payable 3,383.28 3,383.28
Interest Payable 211.46 211.46
Notes Payable 5,000.00 5,000.00
Common Stock 20,000.00 20,000.00
Beginning Retained earnings 50,144.84 50,144.84
Dividends 105,000.00 105,000.00
Bakery Sales 327,322.55 327,322.55
Merchandise Sales 1,205.64 1,205.64
Cost of Goods Sold - Baked 105,834.29 105,834.29
Cost of Goods Sold - Merchandise 859.77 859.77
Rent Expense 24,549.19 24,549.19
Wages Expense 10,670.72 10,670.72
Misc. Supplies Expense 3,000.46 3,000.46
Business License Expense 2,045.77 2,045.77
Misc. Expense 1,363.84 1,363.84
Depreciation Expense 677.86 677.86
Insurance Expense 1,091.08 1,091.08
Advertising Expense 1,549.74 1,549.74
Interest Expense 818.31 818.31
Telephone Expense 490.98 490.98
Gain/Loss on disposal of equipment
429,136.32 429,136.32 - 0 - 0 429,136.32 429,136.32
Balance Sheet 2017
Preliminary
Peyton Approved
Balance Sheet
As of December 31, 2017
Assets Liabilities and Owners' Equity
Cu
ent Assets: Cu
ent Liabilities:
Cash $ 67,520.04 Accounts Payable $ 20,262.11
Accounts Receivable 68,519.91 Wages Payable 3,383.28
Baking Supplies 15,506.70 Interest Payable 211.46
Merchandise Inventory 1,238.07
Prepaid Rent 2,114.55
Prepaid Insurance 2,114.55
Misc. Supplies 170.49
Total Cu
ent Assets $ 157,184.31 Total Cu
ent Liabilities $ 23,856.85
Long Term Liabilities:
Long Term/Fixed Assets: Notes Payable 5,000.00
Baking Equipment 14,000.00 Total Long Term Liabilities: 5,000.00
Accumulated Depreciation -1,606.44
Net Fixed assets 12,393.56 Total Liabilities: 28,856.85
Common Stock 20,000.00
Retained Earnings 120,721.02
Total Equity 140,721.02
Total Assets: $ 169,577.87 Total Liabilities & Equity $ 169,577.87
Balance Sheet 2017 Revised
Milestone One
Workbook Instructions Revised
Peyton Approved
Balance Sheet
As of December 31, 2017
Income Statement 2017
Preliminary
Peyton Approved
Income Statement
for Year Ended 12/31/2017
Bakery Sales $ 327,322.55
Merchandise Sales 1,205.64
Total Revenues 328,528.19
Cost of Goods Sold - Baked 105,834.29
Cost of Goods Sold - Merchandise 859.77
Total Cost of Goods Sold 106,694.06
Gross Profit 221,834.13
Operating Expenses:
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
Total Operating Expenses: 46,257.95
Net Income 175,576.18
Income Statement 2017 Revised
Milestone One
Workbook Instructions
Revised
Peyton Approved
Income Statement
for Year Ended 12/31/2017
Retained Earnings 2017
Preliminary
Peyton Approved
Statement of Retained Earnings
for Year Ended 12/31/2017
Beginning Balance: $ 50,144.84
plus Net Income 175,576.18
less Dividends: 105,000.00
Ending Balance $ 120,721.02
Retained Earnings 2017 Revised
Milestone One
Workbook Instructions
Revised
Peyton Approved
Statement of Retained Earnings
for Year Ended 12/31/2017
Cash Flow 2017
Preliminary
Peyton Approved
Statement of Cash Flow
for Year Ended 12/31/2017
Net Income $ 175,576.18
Depreciation Expense 677.86
176,254.04
Increase in Accounts Receivable (25,886.91)
Increase in Baking Supplies (8,187.84)
Increase in Merchandise inventory (443.10)
Increase in Prepaid Rent (449.55)
Increase in Prepaid Insurance (1,004.55)
Increase in Misc. Supplies (114.99)
Increase in Accounts Payable 3,292.11
Increase in Wages Payable 1,850.48
Increase in Interest Payable 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 (10,000.00)
Dividends Paid (105,000.00)
Cash Flow from Financing (115,000.00)
Net Cash Flow 24,354