Accounting Workbook: Your accounting workbook must include appropriate calculations and statements: A. Create pro forma fi

07 Feb Accounting Workbook: Your accounting workbook must include appropriate calculations and statements: A. Create pro forma fi

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I. Accounting Workbook: Your accounting workbook must include appropriate calculations and statements: A. Create pro forma financial statements for predicting ability to meet future expansion goals. Pro Forma Statements are “what if” statements. If the company opens the second location, what will the budgeted income statement and budgeted balance sheets be? II. Notes to the Financial Statements: You will find an example for how to format these notes located in the module resources. Your notes must contain the following: A. Create appropriate notes as year-to-year documentation for managing depreciation, supplies, and inventory. B. Create appropriate notes for long-term debt. III. Management Analysis Brief: Your management analysis brief should explain financial information to management. Provide evidence from your accounting workbook to support your ideas where applicable. A. Discuss the impact of the pro forma financial statements for predicting ability to meet future expansion goals. B. Describe the implications of inventory costing, contingent liabilities, and revenue recognition. C. Identify potential issues in interpretation of financial information, providing examples to support your ideas.

ACC 308 Milestone Two Guidelines and Rubric

Overview: For Milestone Two, which is due in Module Five, you will create pro forma financial statements, notes to the financial statements, and develop a report for management explaining the impact of pro forma financial statements on the company’s expansion plans, implications of inventory costing, contingent liabilities, and revenue recognition. In your management analysis brief, you will also identify potential issues in interpreting financial statements.

Prompt: First, review the Final Project Scenario document and the accompanying Final Project Workbook. Follow the instructions below and complete the workbook with the information provided in the scenario. Using your review of the scenario, develop a management analysis brief that addresses the critical elements indicated below. Use information from your accounting workbook to support your claims in the management analysis bri ef.

Note: Milestone Two is a draft of some critical elements of the final project. Note that the management analysis brief informs the management analysis memo in the final project.

Specifically, the following critical elements must be addressed:

the company opens the second location, what will the budgeted income statement and budgeted balance sheets be?

II. Notes to the Financial Statements: You will find an example for how to format these notes located in the module resources. Your notes must contain the following:

A. Create appropriate notes as year-to-year documentation for managing depreciation, supplies, and inventory. B. Create appropriate notes for long-term debt.

III. Management Analysis Brief: Your management analysis brief should explain financial information to management. Provide evidence from your accounting workbook to support your ideas where applicable.

A. Discuss the impact of the pro forma financial statements for predicting ability to meet future expansion goals. B. Describe the implications of inventory costing, contingent liabilities, and revenue recognition. C. Identify potential issues in interpretation of financial information, providing examples to support your ideas.

Rubric Guidelines for Submission: You will submit three files for this milestone. Your accounting workbook must be submitted as a Microsoft Excel document. Your notes to the financial statement must be submitted in a Microsoft Word document. Your management analysis brief should be a separate 1- to 2-page Microsoft Word document with double spacing, 12-point Times New Roman font, and one-inch margins.

Critical Elements Proficient (100%) Needs Improvement (75%) Not Evident (0%) Value

Accounting Workbook: Pro Forma Financial

Statements

Creates pro forma financial statements for predicting ability to meet future expansion goals

Creates pro forma financial statements but calculations contain inaccuracies

Does not create pro forma financial statements

Notes to the Financial Statements: Year-to-Year

Documentation

Creates appropriate notes as year-to- year documentation for managing depreciation, supplies, and inventory

Creates appropriate notes as year-to- year documentation for managing depreciation, supplies, and inventory, but notes are cursory or illogical

Does not create appropriate notes as year-to-year documentation for managing depreciation, supplies, and inventory

Notes to the Financial Statements:

Long-Term Debt

Creates appropriate notes for long-term debt

Creates appropriate notes for long-term debt, but notes are cursory or illogical

Does not create appropriate notes for long term debt

Management Analysis Brief: Pro Forma Financial

Statements

Discusses the impact of pro forma financial statements for predicting ability to meet future expansion goals

Discusses the impact of pro forma financial statements for predicting ability to meet future expansion goals, but explanation is cursory or contains inaccuracies

Does not discuss the impact of pro forma financial statements

Management Analysis Brief: Inventory Costing,

Contingent Liabilities, and Revenue Recognition

Describes the implications of inventory costing, contingent liabilities, and revenue recognition

Describes the implications of inventory costing, contingent liabilities, and revenue recognition, but description is cursory or illogical

Does not describe the implications of inventory costing, contingent liabilities, and revenue recognition

Management Analysis Brief: Issues in Interpretation

Identifies potential issues in interpretation of financial information, providing examples to support ideas

Identifies potential issues in interpretation of financial information, but identification or examples provided are cursory or illogical

Does not identify potential issues in interpretation of financial information

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

Total 100%

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		Cr
	Cash	67,520.04				3	1,000.00				68,520.04
	Accounts Receivable	68,519.91									68,519.91
	Other Receivable – Insurance					4	700.00				700.00
	Baking Supplies	15,506.70				1	3,175.00				18,681.70
	Merchandise Inventory	1,238.07							200.00	2	1,038.07
	Consignment Inventory					2	200.00				200.00
	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							2,000.00	4	12,000.00
	Accumulated Depreciation			1,606.44		4	1,200.00						406.44
	Customer Deposit								1,000.00	3			1,000.00
	Accounts Payable			20,262.11					3,175.00	1			23,437.11
	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					4	100.00				100.00
		429,136.32		429,136.32			6,375.00		6,375.00		432,111.32		432,111.32

Balance Sheet 2017

	Preliminary
			Peyton Approved
			Balance Sheet
			As of December 31, 2017
Assets				Liabilities and Owners' Equity
	Current Assets:				Current 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 Current Assets		$ 157,184.31		Total Current 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
Assets					Liabilities and Owners' Equity
	Current Assets:					Current Liabilities:
	Cash	$ 68,520.04				Accounts Payable	$ 23,437.11
	Accounts Receivable	68,519.91				Wages Payable	3,383.28
	Other Receivable – Insurance	700.00				Interest Payable	211.46
	Baking Supplies	18,881.70				Customer Deposit	1000.00
	Merchandise Inventory	1,038.07
	Prepaid Rent	2,114.55
	Prepaid Insurance	2,114.55
	Misc. Supplies	170.49
	Total Current Assets		$ 162,059.31			Total Current Liabilities		$ 28,031.85
						Long Term Liabilities:
	Long Term/Fixed Assets:					Notes Payable	5,000.00
	Baking Equipment	12,000.00				Total Long Term Liabilities:		5,000.00
	Accumulated Depreciation	-406.44
	Net Fixed Assets		11,593.56			Total Liabilities:		33,031.85
						Common Stock	20,000.00
						Retained Earnings	120,621.02
						Total Equity		140,621.02
	Total Assets:		$ 173,652.87			Total Liabilities & Equity		$ 173,652.87

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
	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
	Loss on Disposal of Equipment		100.00
	Total Operating Expenses:			46,357.95
	Net Income			175,476.18

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
	Beginning Balance:		$ 50,144.84
	plus Net Income		175,476.18
	less Dividends:		105,000.00
	Ending Balance		$ 120,621.02

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				24,354.65
	Beginning Cash					43,165.39
	Ending Cash					67,520.04

Cash Flow 2017 Revised

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Milestone One Workbook Instructions
	Revised
		Peyton Approved
		Statement of Cash Flow
		for Year Ended 12/31/2017
Net Income			$ 175,476.18
Depreciation Expense			677.86
Loss on Disposal of Equipment			100.00
				176,254.04
Increase in Accounts Receivable				(25,886.91)
Increase in Other Receivable – Insurance				(700.00)
Increase in Baking Supplies				(11,562.84)
Increase in Merchandise Inventory				(243.10)
Increase in Prepaid Rent				(449.55)
Increase in Prepaid Insurance				(1,004.55)
Increase in Misc. Supplies				(114.99)
Increase in Customer Deposit				1,000.00
Increase in Accounts Payable				6,467.11
Increase in Wages Payable