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Please help me with adjusting entries, adjusted trial balance, financial statements and calculating ratios.

Overview: You just began a position as a financial accountant at Peyton Approved. In this role, your first task is to prepare the companys 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.

Refer to the data below and use the Final Project Workbook that includes the income statement, balance sheet, retained earnings statement and cash flow statement to complete the final project and associated milestones.

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.

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 suppliers warehouse.

At 12/31/17, Peyton has $200 worth of merchandise on consignment at Brunos House of Bacon.

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.

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.

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 years 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. Retained earnings = net income.

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. Add remaining amount needed to balance into accounts payable.

For notes to the financial statements and Management Analysis Memo, consider the following:

Peyton Approved uses the following accounting practices:

• Inventory: Periodic, LIFO for both baking and merchandise
• Equipment: Straight line method used for equipment

Business Financing Information: Use this information to calculate interest rates and insurance information, and to assess their impact on the companys financial obligations:

• 6% interest note payable was made on Jan 31, 2017, and is due Feb 1, 2019.
• 5-year loan was made on June 1, 2016. Terms are 7.5% annual rate, interest only until due date.
• Insurance: Annual policy covers 12 months, purchased in February, covering March 2017 to February 2018. No monthly adjustments have been made.

Preliminary Peyton Approved Balance Sheet As of December 31, 2017 Assets Liabilities and Owners' Equity Current Assets Cash Accounts Receivable Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Misc. Supplies Current Liabilities Accounts Payable Wages Payable Interest Payable 67,520.04 68,51991 15,506.70 1238.07 2,114.55 2,114.55 170.49 20,262.11 3,383.28 211.46 Total Current Assets 157,184.31 Total Current Liabilities 23,856.85 Long Term/Fixed Assets Baking Equipment Long Term Liabilities Notes Payable Total Long Term Liabilities 5,000.00 14,000.00 1,606.44 5,000.00 Accumulated Depreciation Net Fixed assets 12,393.56 Total Llabilitles 28,856.85 Common Stock Retained Earning: 20,000.00 20,721.02 Total Equity 140,721.02 Total Assets 169,577.87 Total Liabilities & Equity 169,577.87 PEYTON APPROVED TRIAL BALANCE As of December 31, 2017 Unadjusted trial balance Adjusting entries Cr Adjusted trial balance ref 67,520.04 Other Receivable Insurance 15,506.70 14,000.00 14,000.00 Beginning Retained eamings 105,000.00 Cost of Goods Sold Baked Cost of Goods Sold Merchandise 105,834.29 Gain/Loss on disposal of equipment 429,136 32 429,13632 Preliminary Peyton Approved Income Statement For Year Ended 12/31/2017 Peyton Approved Income Statement For Year Ended 12/31/2017 Bakery Sales Merchandise Sales $ 327,322.55 1,205.64 Bakery Sales Merchandise Sales Total Revenues Cost of Goods Sold Baked Cost of Goods Sold- Merchandise Total Cost of Goods Sold Gross Profit 328,628.19 Total Revenues Cost of Goods Sold Baked Cost of Goods Sold Merchandise Total Cost of Goods Sold Gross Profit 105,834.29 859.77 106,694.06 221,834.13 Operating Expenses: Operating Expenses Rent Expense Wages Expense Misc. Supplies Expense Business License Expense Misc. Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense 24,549.19 10,670.72 3,000.46 2,045.77 1,363.84 67786 1,091.08 1,549.74 818.31 490 98 Rent Expense Wages Expense Misc. Supplies Expense Business License Expense Misc. Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense Total Operating Expenses 46,257.95 Total Operating Expenses Net Income 175,576.18 Net Income Peyton Approved Statement of Retained Earnings For Year Ended 12/31/2017 Beginning Balce plus Net Income 50,144 84 175,576.18 less Dividends Ending Balance120,721.02 105,000.00 Peyton Approved Statement of Retained Earnings For Year Ended 12/31/2017 Beginning Balance plus Net Income Ending BalanceS Statement of cash Flow For Year Ended 12/31/2017 Peyton Approved Statement of cash Flow For Year Ended 12/31/2017 Net Income $ 175,576.18 677.86 Depreciation Expense 176,254.04 Net Income Depreciation Expense 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 1850.48 44.96 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 Operating Cash Flow 145,354.65 Cash Flow from Investments Equipment Purchases Operating Cash Flow (6,000.00) Cash Flow from Investments Equipment Purchases Cash Flow from Investments (6,00000) Cash Flow from Financing Repayment of Note Payable Dividends Paid Cash Flow from Investments (10,000.00) 105,000.00) Cash Flow from Financing Repayment of Note Payable Dividends Paid Cash Flow from Financing 115,000 00) 24,354 65 43,165 39 67,52004 Net Cash Flow Cash Flow from Financing Beginning Cash Net Cash Flow Ending Cash Beginning Cash Ending Cash 2017 2016 Current Ratio (Working Capital) Quick Ratio R Turnover Inventory Tumover Gross margin Return on Sales Return on Equity Return on Assets

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