Peyton Approved Projects Help (ACC 308 Milestone)

Peyton Approved Projects Assignment

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 the goods, as well as a bill for freight for $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 $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 a 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.
5.       Note about later borrowing – financials will show loan from parents repaid and use of bank financing.

The company is planning to open another location in 2018. Prepare pro forma financials for 2018 for the new location using the following information:

Cost of leasing commercial space: $1,500 per month.
Cost of new equipment: $15,000, purchased with a long-term note. Use straight line depreciation assuming a seven-year life, no residual value. Use full year’s depreciation for the first year.
Cost of hiring and training new employees: three at $25,000 each for the first year.
Except as noted below, assets, current liabilities, sales, costs, and expenses are expected to be 80% of the existing store (from preliminary statements) except no stock.
Cash: $7,000. Accounts receivable amount to 4.0 turns (accounts receivable turnover will be 4.0); inventory amount to show 3.0 turns (inventory turnover will be 3.0). No stock will be issued. Retained earnings are to equal net income. Additional financing of $5,000 will be long-term.

Comments are closed.