ACC 308 Final Project Guidelines and Rubric
Overview
The final project for this course is the creation of an accounting workbook, various notes to the financial statements, and a management analysis memo. In the
professional field, accountants are expected to perform accurate calculations and articulate how financial information impacts the company in a couple of key
ways: First, an accountant is responsible for producing the financial information that will be reviewed in a year-end audit. It is important to not only record
information correctly but also follow appropriate accounting reporting and recording methodologies.
Second, an accountant should be able to use financial information to evaluate a company’s financial health. This information is important to know so that
management can make day-to-day operating decisions. In addition, the financial information that accountants provide is important for companies to be aware of
as they consider pursuing other goals, such as expansion. In the management analysis memo, you will evaluate the company’s current performance and explain
what the financial information that you presented means for the company.
The project is divided into two milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final
submissions. These milestones will be submitted in Modules Three and Five. The final product will be submitted in Module Seven.
In this assignment, you will demonstrate your mastery of the following course competencies:
ACC-308-01: Apply accounting rules and methodologies in finalizing financial statements
ACC-308-02: Analyze basic financial statements to evaluate an organization’s financial performance
ACC-308-03: Generate financial records for various accounting situations
Prompt
You will assume the role of a financial accountant responsible for preparing for a year-end audit. In addition, management would like a report of where the
company stands currently, and how it stands in relation to meeting future goals for growth. To complete this project, review the Final Project Scenario document
and use the accompanying workbook.
Specifically, you must address the critical elements listed below. Most of the critical elements align with a particular course competency (shown in brackets).
I.
Accounting Workbook: Your accounting workbook must include appropriate calculations, ratios, and notes. Be sure to complete all tabs in the
spreadsheet.
A. Create adjusting entries for financial statement preparation. [ACC-308-03]
B. Create an adjusted trial balance for financial statement preparation. [ACC-308-03]
1
C. Prepare financial statements for determining the company’s financial position. [ACC-308-03]
D. Calculate ratios for determining the company’s financial health. [ACC-308-03]
E. Create pro forma financial statements for predicting ability to meet future expansion goals. [ACC-308-03]
II. Notes to the Financial Statements: Your notes must contain the following:
A. Create appropriate notes as year-to-year documentation for managing depreciation, supplies, and inventory. [ACC-308-01]
B. Create appropriate notes for long-term debt [ACC-308-01]
III. Management Analysis Memo: Your management analysis memo should explain financial information to management. Provide evidence from your
accounting workbook to support your ideas.
A. Assess the company’s financial health based on ratio analyses presented in the accounting workbook. [ACC-308-02]
B. Compare ratio analysis to trends in financial ratios over time for illustrating their impact, providing examples to support your claims. [ACC-30802]
C. Summarize the effects of different compounding periods and interest rates on future value of money. [ACC-308-02]
D. Discuss the impact of the pro forma financial statements for predicting ability to meet future expansion goals. [ACC-308-02]
E. Identify potential issues in interpretation of financial information, providing examples to support your ideas. [ACC-308-02]
F. Explain how alignment to relevant regulations and ethical reporting influenced your accounting practices and notes, providing examples to
support your claims. [ACC-308-01]
G. Describe the implications of inventory costing, contingent liabilities, and revenue recognition. [ACC-308-02]
Milestones
Milestone One
In Module Three, you will submit a partial accounting workbook and a brief management analysis memo. This milestone will be graded with the Milestone One
and Rubric.
Milestone Two
In Module Five, you will submit a partial accounting workbook and a brief management analysis memo. This milestone will be graded with the Milestone Two
Rubric.
Final Project Submission
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. (Note new elements that were
not covered in Milestones 1 and 2 – Notes to the Financial Statements B and Management Analysis Memo F.)
2
Final Project Rubric
Guidelines for Submission: Your accounting workbook must be submitted as a Microsoft Excel document, notes to the financial statements must be submitted
as a Microsoft Word document, and your management analysis memo should be a 2- to 3-page Microsoft Word document 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
Does not create adjusting entries
(0%)
5
Creates an adjusted trial balance, Does not create an adjusted trial
but balances are inaccurate
balance (0%)
(55%)
5
Accounting
Workbook: Adjusting
Entries
[ACC-308-03]
Creates adjusting entries for
Creates adjusting entries, but
financial statements preparation entries are inaccurate (55%)
(100%)
Accounting
Workbook: Adjusted
Trial Balance
[ACC-308-03]
Creates and adjusted trial
balance for financial statement
preparation. (100%)
Accounting
Workbook: Financial
Statements
[ACC-308-03]
Prepares financial statements for Prepares financial statements,
determining the company’s
but calculations are inaccurate
financial position (100%)
(55%)
Accounting
Workbook: Ratios
[ACC-308-03]
Does not prepare financial
statements (0%)
5
Calculates ratios for determining Calculates ratios, but calculations Does not calculate ratios (0%)
the company’s financial health
are inaccurate (55%)
(100%)
5
Accounting
Workbook: Pro Forma
Financial Statements
[ACC-308-03]
Creates Pro Forma Financial
Statements for predicting ability
to meet future expansion goals
(100%)
Creates Pro Forma Financial
Statements, but calculations
contain inaccuracies (55%)
Does not create Pro Forma
Financial Statements (0%)
5
Notes to the Financial
Statements: Year-toYear Documentation
[ACC-308-01]
Creates appropriate notes as
year-to-year documentation for
managing depreciation, supplies,
and inventory (100%)
Creates appropriate notes as
year-to-year documentation for
managing depreciation, supplies,
and inventory, but notes are
cursory or illogical (55%)
Does not create appropriate
notes as year-to-year
documentation for managing
depreciation, supplies, and
inventory (0%)
14
3
Notes to the Financial
Statements: LongTerm Debt
[ACC-308-01]
Creates appropriate notes for
long-term debt (100%)
Creates appropriate notes for
long-term debt, but notes are
cursory or illogical (55%)
Does not create appropriate
notes for long term debt (0%)
7
Management Analysis
Memo: Company’s
Financial Health
[ACC-308-02]
Meets “Proficient” criteria, and
assessment demonstrates a
sophisticated awareness of ratio
analyses and their relevance to
the company’s financial health
(100%)
Assesses the company’s financial Assesses the company’s financial Does not assess the company’s
health based on ratio analyses
health, but assessment is cursory financial health (0%)
presented in the accounting
or contains inaccuracies (55%)
workbook (85%)
7
Management Analysis
Memo: Ratio Analysis
and Ratios Over Time
[ACC-308-02]
Meets “Proficient” criteria, and
examples demonstrate a
sophisticated understanding of
ratios and trends over time
(100%)
Compares ratio analysis to trends
in financial ratios over time for
illustrating their impact,
providing examples to support
claims (85%)
Compares ratio analysis to trends Does not compare ratio analysis
in financial ratios over time for
to trends in financial ratios over
illustrating their impact, but
time (0%)
examples are cursory, or
response contains inaccuracies
(55%)
7
Management Analysis
Memo: Compounding
Periods and Interest
Rates
[ACC-308-02]
Meets “Proficient” criteria, and
summary demonstrates a
sophisticated understanding of
effects of different compounding
periods and interest rates on
future value of money (100%)
Summarizes the effects of
different compounding periods
and interest rates on future
value of money (85%)
Summarizes the effects of
different compounding periods
and interest rates on future
value of money, but summary is
cursory or contains inaccuracies
(55%)
7
Management Analysis
Memo: Pro Forma
Financial Statements
[ACC-308-02]
Meets “Proficient” criteria, and
explanation of the impact of
pro forma financial statements
demonstrates a complex grasp of
how they impact the company
(100%)
Discusses the impact of pro
forma financial statements for
predicting ability to meet future
expansion goals (85%)
Discusses the impact of pro
Does not discuss the impact of
forma financial statements for
the pro forma financial
predicting ability to meet future statements (0%)
expansion goals, but explanation
is cursory or contains
inaccuracies (55%)
7
Management Analysis
Memo: Issues in
Interpretation
[ACC-308-02]
Meets “Proficient” criteria, and
examples provided demonstrate
a nuanced understanding of
potential issues in interpretation
of financial information (100%)
Identifies potential issues in
interpretation of financial
information, providing examples
to support ideas (85%)
Identifies potential issues in
Does not identify potential issues
interpretation of financial
in interpretation of financial
information, but identification or information (0%)
examples provided are cursory
or illogical (55%)
7
4
Does not summarize the effects
of different compounding
periods and interest rates on
future value of money (0%)
Management Analysis
Memo: Regulations
and Ethical Reporting
[ACC-308-01]
Meets “Proficient” criteria, and
examples provided make cogent
connections between relevant
regulations and ethical reporting
and accounting practices (100%)
Explains how alignment to
relevant regulations and ethical
reporting influenced accounting
practices and notes, and
provides examples to support
claims (85%)
Explains how alignment to
relevant regulations and ethical
reporting influenced accounting
practices and notes, but
explanation or examples are
cursory or illogical (55%)
Does not explain how alignment
to relevant regulations and
ethical reporting influenced
accounting practices and notes
(0%)
7
Management Analysis
Memo: Inventory
Costing, Contingent
Liabilities, and
Revenue Recognition
[ACC-308-02]
Meets “Proficient” criteria, and
description demonstrates
sophisticated understanding of
the implications of inventory
costing, contingent liabilities,
and revenue recognition (100%)
Describes the implications of
inventory costing, contingent
liabilities, and revenue
recognition (85%)
Describes the implications of
inventory costing, contingent
liabilities, and revenue
recognition, but description is
cursory or illogical (55%)
Does not describe the
implications of inventory costing,
contingent liabilities, and
revenue recognition (0%)
7
Articulation of
Response
Submission has no major errors
related to, grammar, spelling,
syntax, or organization (100%)
Submission has some minor
errors related to organization,
grammar, and style (85%)
Submission has several errors
related to grammar, spelling,
syntax, or organization (55%)
Submission has critical errors
related to citations, grammar,
spelling, syntax, or organization
that prevent understanding of
ideas (0%)
5
Total
5
100%
Southern New Hampshire University
ACC 308 - Intermediate Accounting II
MILESTONE 1 (Due in Module 3)
For full instructions see Instructions
Milestone 1 page
MILESTONE 2 (Due in Module 5)
For full instructions see Instructions
Milestone 2 page
Instructions Milestone 1
1.
Trial Balance
Using the Peyton Approved financial data,
create:
Adjusting Entries
Adjusted Trial Balance
2.
1.
Pro Forma Financial
Statements
Using the given Pro Forma information,
create:
Pro Forma Income Statement
Pro Forma Balance Sheet
Revised Financial Statements
Using the Trial Balance and Preliminary
financial statements, prepare:
Revised Balance Sheet
Revised Income Statement
Revised Retained Earnings Statement
Revised Statement of Cash Flows
3.
Instructions Milestone 2
Ratio Analysis
Using the financial statements from 2015,
2016, and revised 2017, calculate the
following ratios:
Current Ratio (Working Capital )
Quick Ratio
A/R Turnover
Inventory Turnover
Gross margin
Return on Sales
Return on Equity
Return on Assets
Remember the written portion of the
Milestone! See the Milestone 2
Assignment Guidelines and Rubric
document.
Remember the written portion of the
Milestone! See the Milestone 1
Assignment Guidelines and Rubric
document.
Module 5)
Southern New Hampshire University
ACC 308 - Intermediate Accounting II
INSTRUCTIONS FOR MILESTONE 1 (Due Module 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 Final Project (Module 7)
ITEMS TO COMPLETE FOR THIS MILESTONE (Blue Tabs) :
GENERAL
You just began a position as a financial accountant at Peyton Approved. In this role, your first task is to prepare the company’
year-end audit. Additionally, the company is interested in expanding its business within the next year. They would like your su
their ability to meet their goals.
TRIAL BALANCE 2017 TAB
Using the Peyton Approved financial data (see bottom of page):
Create the necessary adjusting journal entries. Use the REF column to reference the entry to each event
Complete the adjusted trial balance
REVISED FINANCIAL STATEMENTS
Using the preliminary financial statements (yellow tabs) and the Trial Balance 2017, prepare the following statements:
Balance Sheet (BS 2017 Revised tab)
Income Statement (IS 2017 Revised tab)
Retained Earnings Statement (RE 2017 Revised tab)
Statement of Cash Flows (CF 2017 Revised tab)
RATIO ANALYSIS
Using the revised 2017 financial statements, 2016 financial statements (orange tabs), and 2015 financial statements (o
a ratio analysis with the following ratios:
Current Ratio (Working Capital )
Quick Ratio
A/R Turnover
Inventory Turnover
Gross margin
Return on Sales
Return on Equity
Return on Assets
PEYTON APPROVED FINANCIAL DATA
Preliminary Financial Statements have already been prepared (2017 statements in the Final Project Workbook).
entries have not yet been made. See table for possible adjustments that indicate what will be recorded at 12/31/
Use the following to complete year-to-year documentation and notes for managing depreciation, inventory, and
1. A supplier shipped $3,000 of ingredients on 12/29/17. Peyton receives an invoice for the goods, as well as a b
$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 sec
January.
4. On 12/03/2017, a mixer with cost of $2,000, accumulated depreciation $1,200, was destroyed by a forklift. As
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.
Adjusting Journal Entries
Ref No.
1
2
3
Date
Account Tittle
12/29/2107 Supplies
Freight Expense
Supplies
Debit
Credit
$
3,000
$
175
$
3,175
12/31/2107 Goods in Transit
Bruno's House of Bacon
$
12/23/2107 Cash
$
200
12/3/2107 Profit and LossAccount
Insurance Claim
Accumulated Depreciation
Baking Equipment
$
$
$
200
$
1,000
$
2,000
1,000
Advance from Customer - Pet Globe
4
$
100
700
1,200
3)
roject (Module 7)
sk is to prepare the company’s financials for the
year. They would like your support in assessing
e entry to each event
are the following statements:
d 2015 financial statements (orange tabs), prepare
HOME
he Final Project Workbook). Final adjusting
hat will be recorded at 12/31/17 (fiscal year end).
depreciation, inventory, and long-term debt.
e for the goods, as well as a bill for freight for
House of Bacon.
e shipped by Peyton in the second week of
as destroyed by a forklift. As of 12/23/17,
ion.
of bank financing.
PEYTON APPROVED
TRIAL BALANCE
As of December 31, 2017
Cash
Accounts Receivable
Other Receivable - Insurance
Baking Supplies
Merchandise Inventory
Consignment Inventory
Prepaid Rent
Prepaid Insurance
Misc. Supplies
Baking Equipment
Accumulated Depreciation
Customer Deposit
Accounts Payable
Wages Payable
Interest Payable
Notes Payable
Common Stock
Beginning Retained earnings
Dividends
Bakery Sales
Merchandise Sales
Cost of Goods Sold - Baked
Cost of Goods Sold - Merchandise
Rent Expense
Wages Expense
Misc. Supplies Expense
Business License Expense
Misc. Expense
Depreciation Expense
Insurance Expense
Advertising Expense
Interest Expense
Telephone Expense
Gain/Loss on disposal of equipment
Unadjusted trial balance
Dr
Cr
67,520.04
68,519.91
ref
3
4
1
15,506.70
1,238.07
2
2,114.55
2,114.55
170.49
14,000.00
1,606.44
4
20,262.11
3,383.28
211.46
5,000.00
20,000.00
50,144.84
105,000.00
327,322.55
1,205.64
105,834.29
859.77
24,549.19
10,670.72
3,000.46
2,045.77
1,363.84
677.86
1,091.08
1,549.74
818.31
490.98
4
429,136.32
429,136.32
ON APPROVED
L BALANCE
cember 31, 2017
Instructions
Milestone 1
Adjusting entries
Dr
Cr
1,000.00
ref
700.00
3,175.00
200.00
2
2,000.00
4
1,000.00
3,175.00
3
1
200.00
1,200.00
100.00
6,375.00
6,375.00
Adjusted trial balance
Dr
Cr
68,520.04
68,519.91
700.00
18,681.70
1,038.07
200.00
2,114.55
2,114.55
170.49
12,000.00
406.44
1,000.00
23,437.11
3,383.28
211.46
5,000.00
20,000.00
50,144.84
105,000.00
327,322.55
1,205.64
105,834.29
859.77
24,549.19
10,670.72
3,000.46
2,045.77
1,363.84
677.86
1,091.08
1,549.74
818.31
490.98
100.00
432,111.32
432,111.32
-
-
Preliminary
Peyton Approved
Balance Sheet
As of December 31, 2017
Assets
Current Assets:
Cash
Accounts Receivable
Baking Supplies
Merchandise Inventory
Prepaid Rent
Prepaid Insurance
Misc. Supplies
Liabilities
67,520.04
68,519.91
15,506.70
1,238.07
2,114.55
2,114.55
170.49
Total Current Assets
Long Term/Fixed Assets:
Baking Equipment
Accumulated Depreciation
Net Fixed assets
Total Assets:
157,184.31
14,000.00
-1,606.44
12,393.56
169,577.87
oved
eet
31, 2017
Liabilities and Owners' Equity
Current Liabilities:
Accounts Payable
20,262.11
Wages Payable
3,383.28
Interest Payable
211.46
Total Current Liabilities
23,856.85
Long Term Liabilities:
Notes Payable
Total Long Term Liabilities:
5,000.00
Total Liabilities:
Common Stock
Retained Earnings
5,000.00
28,856.85
20,000.00
120,721.02
Total Equity
140,721.02
Total Liabilities & Equity
169,577.87
Peyton Approved
Balance Sheet
As of December 31, 2017
Assets
Current Assets:
Cash
Accounts Receivable
Baking Supplies
Merchandise Inventory
Prepaid Rent
Prepaid Insurance
Misc. Supplies
Other Receivable - Insurance
Consignment Inventory
Liabiliti
68,520.04
68,519.91
18,681.70
1,038.07
2,114.55
2,114.55
170.49
700.00
200.00
Total Current Assets
162,059.31
Long Term/Fixed Assets:
Baking Equipment
12,000.00
Accumulated Depreciation
-406.44
Net Fixed assets
11,593.56
Total Assets:
173,652.87
Approved
e Sheet
mber 31, 2017
Instructions
Milestone 1
Liabilities and Owners' Equity
Current Liabilities:
Accounts Payable
23,437.11
Wages Payable
3,383.28
Interest Payable
211.46
Customer Deposit
1,000
Total Current Liabilities
Long Term Liabilities:
Notes Payable
Total Long Term Liabilities:
28,031.85
5,000.00
5,000.00
Total Liabilities:
Common Stock
Retained Earnings
33,031.85
20,000.00
120,621.02
Total Equity
140,621.02
Total Liabilities & Equity
173,652.87
-
Instructions
Milestone 1
Preliminary
Peyton Approved
Income Statement
For Year Ended 12/31/2017
Bakery Sales
Merchandise Sales
Total Revenues
Cost of Goods Sold - Baked
Cost of Goods Sold - Merchandise
Total Cost of Goods Sold
Gross Profit
$
327,322.55
1,205.64
328,528.19
105,834.29
859.77
106,694.06
221,834.13
Operating Expenses:
Rent Expense
Wages Expense
Misc. Supplies Expense
Business License Expense
Misc. Expense
Depreciation Expense
Insurance Expense
Advertising Expense
Interest Expense
Telephone Expense
Total Operating Expenses:
Net Income
24,549.19
10,670.72
3,000.46
2,045.77
1,363.84
677.86
1,091.08
1,549.74
818.31
490.98
46,257.95
175,576.18
Peyton Approved
Income Statement
For Year Ended 12/31/2017
Bakery Sales
Merchandise Sales
Total Revenues
Cost of Goods Sold - Baked
Cost of Goods Sold - Merchandise
Total Cost of Goods Sold
Gross Profit
$ 327,322.55
1,205.64
328,528.19
105,834.29
859.77
106,694.06
221,834.13
Operating Expenses:
Rent Expense
Wages Expense
Misc. Supplies Expense
Business License Expense
Misc. Expense
Depreciation Expense
Insurance Expense
Advertising Expense
Interest Expense
Telephone Expense
Gain/Loss on disposal of equipment
Total Operating Expenses:
Net Income
24,549.19
10,670.72
3,000.46
2,045.77
1,363.84
677.86
1,091.08
1,549.74
818.31
490.98
100.00
46,357.95
175,476.18
Instructions
Milestone 1
Preliminary
Peyton Approved
Statement of Retained Earnings
For Year Ended 12/31/2017
Beginning Balance:
plus Net Income
$
50,144.84
175,576.18
less Dividends:
Ending Balance
105,000.00
$ 120,721.02
Peyton Approved
Statement of Retained Earnings
For Year Ended 12/31/2017
Beginning Balance:
plus Net Income
$
50,144.84
175,476.18
less Dividends:
Ending Balance
105,000.00
$ 120,621.02
Instructions
Milestone 1
Preliminary
Peyton Approved
Statement of cash Flow
For Year Ended 12/31/2017
Net Income
Depreciation Expense
$ 175,576.18
677.86
176,254.04
Increase in Accounts Receivable
Increase in Baking Supplies
Increase in Merchandise inventory
Increase in Prepaid Rent
Increase in Prepaid Insurance
Increase in Misc. Supplies
Increase in Accounts Payable
Increase in Wages Payable
Increase in Interest Payable
(25,886.91)
(8,187.84)
(443.10)
(449.55)
(1,004.55)
(114.99)
3,292.11
1,850.48
44.96
Operating Cash Flow
Cash Flow from Investments
Equipment Purchases
(6,000.00)
Cash Flow from Investments
Cash Flow from Financing
Repayment of Note Payable
Dividends Paid
Cash Flow from Financing
Net Cash Flow
Beginning Cash
Ending Cash
(10,000.00)
(105,000.00)
145,354.65
(6,000.00)
(115,000.00)
24,354.65
43,165.39
67,520.04
Peyton Approved
Statement of cash Flow
For Year Ended 12/31/2017
Net Income
Depreciation Expense
Loss on Disposal
$ 175,476.18
677.86
100.00
176,254.04
Increase in Accounts Receivable
Increase in Baking Supplies
Increase in Merchandise inventory
Increase in Prepaid Rent
Increase in Prepaid Insurance
Increase in Misc. Supplies
Increase in Accounts Payable
Increase in Wages Payable
Increase in Interest Payable
Increase in Other Receivable - Insurance
Increase in Consignment inventory
Increase in Customer Deposit
(25,886.91)
(11,362.84)
(243.10)
(449.55)
(1,004.55)
(114.99)
6,467.11
1,850.48
44.96
Operating Cash Flow
Cash Flow from Investments
Equipment Purchases
Insurance Proceeds
Cash Flow from Investments
Cash Flow from Financing
Repayment of Note Payable
Dividends Paid
Cash Flow from Financing
Net Cash Flow
Beginning Cash
Ending Cash
(4,000.00)
(10,000.00)
(105,000.00)
0
Instructions
Milestone 1
145,554.65
(4,000.00)
(115,000.00)
26,554.65
43,165.39
68,520.04
Peyton Approved
Balance Sheet
As of December 31, 2015
Assets
Current Assets:
Cash
Accounts Receivable
Baking Supplies
Merchandise Inventory
Prepaid Rent
Prepaid Insurance
Misc. Supplies
Liabilities and Owners
Current Liabilities:
Accounts Payable
Wages Payable
Interest Payable
31507.58
35118.97
8042.23
580.27
1215.32
810.21
40.51
Total Current Assets
Long Term/Fixed Assets:
Baking Equipment
6000
Accumulated Depreciation -677.79
Net Fixed assets
77,315.09
Total Current Liabilities
Long Term Liabilities:
Notes Payable
Total Long Term Liabilities:
5,322.21
Total Liabilities:
Common Stock
Retained Earnings
Total Equity
Total Assets:
82,637.30
Total Liabilities & Equity
Liabilities and Owners' Equity
iabilities:
15086.84
1118.83
121.53
rent Liabilities
16,327.20
m Liabilities:
10,000.00
g Term Liabilities:
10,000.00
26,327.20
20,000.00
36,310.10
bilities & Equity
56,310.10
82,637.30
Peyton Approved
Balance Sheet
As of December 31, 2016
Assets
Current Assets:
Cash
Accounts Receivable
Baking Supplies
Merchandise Inventory
Prepaid Rent
Prepaid Insurance
Misc. Supplies
Liabilities an
43,165.39
42,633.00
7,318.86
794.97
1,665.00
1,110.00
55.50
Total Current Assets
Long Term/Fixed Assets:
Baking Equipment
Accumulated Depreciation
Net Fixed assets
Total Assets:
96,742.72
8,000.00
-928.58
7,071.42
103,814.14
proved
Sheet
er 31, 2016
Liabilities and Owners' Equity
Current Liabilities:
Accounts Payable
16,970.00
Wages Payable
1,532.80
Interest Payable
166.50
Total Current Liabilities
Long Term Liabilities:
Notes Payable
Total Long Term Liabilities:
18,669.30
15,000.00
15,000.00
Total Liabilities:
Common Stock
Retained Earnings
Total Equity
Total Liabilities & Equity
33,669.30
20,000.00
50,144.84
70,144.84
103,814.14
Peyton Approved
Income Statement
For Year Ended 12/31/2016
Bakery Sales
Merchandise Sales
Total Revenues
Cost of Goods Sold - Baked
Cost of Goods Sold - Merchandise
Total Cost of Goods Sold
Gross Profit
214,256.48
770.76
215,027.24
73,159.59
549.64
73,709.23
141,818.01
Operating Expenses:
Rent Expense
Wages Expense
Misc. Supplies Expense
Business License Expense
Misc. Expense
Depreciation Expense
Insurance Expense
Advertising Expense
Interest Expense
Telephone Expense
Total Operating Expenses:
Net Income
15,694.23
6,821.76
1,668.18
1,307.85
871.9
433.36
697.52
740.74
523.14
313.88
29,072.56
112,745.45
2017
2016
Current Ratio (Working Capital )
5.78
5.18
Quick Ratio
4.89
4.60
A/R Turnover
5.91
5.53
Inventory Turnover
7.61
8.81
Gross margin
68%
66%
Return on Sales
53%
52%
Return on Equity
125%
161%
Return on Assets
101%
109%
Instructions Milestone
1
2015
average A/R
8042.23
580.27
8622.5
2016
2017
38875.99 55576.46
7318.86
794.97
18681.7
1038.07
200
8113.83 19919.77
average inventory
8368.165
14016.8
average equity
63227.47 105382.9
average asset
93225.72 138733.5
Total credit Sales/Average A/R
it Sales/Average A/R
Southern New Hampshire University
ACC 308 - Intermediate Accounting II
INSTRUCTIONS FOR MILESTONE 2 (Due Module 5)
IMPORTANT NOTE:
Make sure to completely review the Rubric for Milestone 2
Use the data from Milestone 1 and this Milestone to finalize your final project due in Final Project (Module 7)
ITEMS TO COMPLETE FOR THIS MILESTONE (Green Tabs) :
GENERAL
Use information from Milestone 1 and the plan to open a new location (see bottom of page) for your statements
PRO FORMA FINANCIAL STATEMENTS
Prepare the following Pro Forma Financial Statements for the proposed new location (pro forma statements in this
case are budgeted statements for 2018 based on the new location scenario at the bottom of the page)
Pro Forma Income Statement
Pro Forma Balance Sheet
PEYTON APPROVED PRO FORMA INFORMATION
The company is planning to open another location in 2018 . Prepare pro forma financials for 2018 for the new loca
the following information:
1. Cost of leasing commercial space: $1,500 per month.
2. Cost of new equipment: $15,000. Use straight line depreciation assuming a seven-year life. Use full year’s depr
the first year.
3. Cost of hiring and training new employees: three at $25,000 each for the first year.
4. Except as noted in 5, assets, current liabilities, sales, costs, and expenses are expected to be 80% of the existing
preliminary statements) except no stock. Retained earnings = net income.
5. Cash: $7,000. Accounts receivable amount to 4.0 turns (accounts receivable turnover will be 4.0); inventory am
3.0 turns (inventory turnover will be 3.0). No stock will be issued. Retained earnings are to equal net income. Addi
financing of $5,000 will be long-term. Add remaining amount needed to balance into accounts payable.
HOME
ct (Module 7)
your statements
rma statements in this
the page)
s for 2018 for the new location using
ar life. Use full year’s depreciation for
d to be 80% of the existing store (from
will be 4.0); inventory amount to show
to equal net income. Additional
counts payable.
Peyton Approved Second Location
Pro Forma Income Statement
For Year Ending 12/31/2018
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
Business License Expense
Misc. Expense
Depreciation Expense
Insurance Expense
Advertising Expense
Interest Expense
Telephone Expense
Total Operating Expenses:
Net Income
Workings:
Depreciation = Cost/Useful life of Asset = $15,000/7 years
Weighted Average interest rate = (6%×2 years + 7.5% × 5 Years)/ 7 Years
Interest Expense = Loan × Interest rate = $ 5,000 × 7.07%
Second Location
me Statement
ng 12/31/2018
Instructions
Milestone 2
$ 261,858.04
964.51
262,822.55
84,667.43
687.82
85,355.25
177,467.30
18,000.00
75,000.00
2,400.37
1,636.62
1,091.07
2,142.86
872.86
1,239.79
353.50
392.78
ears
× 5 Years)/ 7 Years
07%
103,129.85
74,337.45
$
$
2,142.86
7.07%
353.50
Instructions
Milestone 2
Peyton Approved Second Location
Pro Forma Balance Sheet
As of December 31, 2018
Assets
Current Assets:
Cash
Accounts Receivable
Baking Supplies
Merchandise Inventory
Prepaid Rent
Prepaid Insurance
Misc. Supplies
Other Receivable - Insurance
Consignment Inventory
7,000.00
65,705.64
14,945.36
229.27
1,691.64
174.57
136.39
560.00
160.00
Total Current Assets
Long Term/Fixed Assets:
Baking Equipment
Accumulated Depreciation
Net Fixed assets
Total Assets:
90,602.87
15,000.00
-2,142.86
12,857.14
103,460.02
Workings:
Account Receivable = Sales/Accounts Receivable Turnover = 262,822.55/4 = 65,705.64
Merchandise Inventory = Merchandise cost of goods sold/Inventory turnover = 687.82/3 = 229.27
Prepaid Insurance = Insurance Expense in Income Statement × 2/10 = 872.86 × 2/10 = 174.57
nd Location
e Sheet
1, 2018
229.27
.57
Instructions
Milestone 2
Liabilities and Owners' Equity
Current Liabilities:
Accounts Payable
446.78
Wages Payable
2,706.62
Interest Payable
169.17
Customer Deposit
800
Total Current Liabilities
Long Term Liabilities:
Notes Payable
Total Long Term Liabilities:
4,122.57
5,000.00
5,000.00
Total Liabilities:
Common Stock
Retained Earnings
Total Equity
Total Liabilities & Equity
9,122.57
20,000.00
74,337.45
94,337.45
103,460.02
Instructions
Milestone 2
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