Imagine that you are working as a financial accountant for Peyton Approved, and you have been charged with revising its financial information. The company has experienced tremendous growth in the past...

Imagine that you are working as a financial accountant for Peyton Approved, and you have been charged with revising its financial information. The company has experienced tremendous growth in the past three years, and it is now a well-known bakery chain for pet products. They have become a publicly traded company and have several locations that they deliver to regionally. You will find the company’s financial information in the Peyton Approved Balance Sheet and Income Statement. This document will need revisions and appropriate notes added in order to prepare for the year-end audit accordingly. In addition to ensuring that the balance sheet is ready for the year-end audit, you will address other major areas of need, including:  Assessing tax implications  Evaluating and explaining stockholder equity  Accounting for postretirement benefits (The amounts would be determined by actuaries.)  Assessing impacts of leases


ACC 309 Final Project Scenario Peyton Approved Overview Imagine that you are working as a financial accountant for Peyton Approved, and you have been charged with revising its financial information. The company has experienced tremendous growth in the past three years, and it is now a well-known bakery chain for pet products. They have become a publicly traded company and have several locations that they deliver to regionally. You will find the company’s financial information in the Peyton Approved Balance Sheet and Income Statement. This document will need revisions and appropriate notes added in order to prepare for the year-end audit accordingly. In addition to ensuring that the balance sheet is ready for the year-end audit, you will address other major areas of need, including:  Assessing tax implications  Evaluating and explaining stockholder equity  Accounting for postretirement benefits (The amounts would be determined by actuaries.)  Assessing impacts of leases Peyton Approved Financial Information Comprehensive income items  Marketable securities on the balance sheet at a cost of $5,500,000 are available-for-sale  Market value at the balance sheet date is $5,235,000  Prepare the adjusting entry to record the unrealized loss and include in comprehensive income Tax information and implications  $1,500 in meal and entertainment expenses show as a permanent difference for tax. Prepare the necessary adjusting entry.  The company uses straight line depreciation for book and MACRS depreciation for the tax return  MACRS depreciation was $209,301 higher than book. Prepare the adjusting entry for the deferred tax.  There have been recent tax structure changes that could impact the company. Peyton Approved has been a C Corp since the beginning of these changes. Peyton provides for taxes at 25% of pretax income (20% Federal, 5% state). Stockholder Equity Peyton Approved prides itself on transparency with shareholders and investors. The company has added two storefront locations and launched a new marketing campaign, which is estimated to bring in 20,000 new customers over the next 6 months. The company expects this expansion will require an additional $1,000,000 of capital and generate an additional $600,000 of after-tax profit. The options are: 1) Issuing an additional $1,000,000 of 10%, 100-par convertible preferred stock (same class as is currently outstanding) 2) Issue an additional $1,000,000 of 8% convertible bonds (same terms as the existing issue) 3) $500,000 each of preferred stock and bonds Determine the impact on earnings per share for each option. Postretirement Benefits Peyton Approved has revised its postretirement plan. It will now provide health insurance to retired employees. Management has requested that you report the short- and long-term financial implications of this.  The company is currently employing 60, and actuaries estimate that the company has a pension liability of $107,041.70.  The estimated cost of retired employees’ health insurance is $43,718.91.  Prepare adjusting entries for the pension liability and the health insurance liability Leases  Six ovens were rented on December 31, with $20,000 charged to rent expense. The lease runs for 6 years with an implicit interest rate of 5%. At the end of the 6 years, Peyton will own them. Make any necessary adjusting entries. Other Items  On December 31, 20XX, the company repaired a packaging machine at cost of $27,000.00. It is expected that the repair will extend the life of the machine by four years. No depreciation is necessary this year.  The company spent $50,000 to obtain and defend a patent for its formula for dog treats. The patent took effect on 1/1/20XX and provides 20 years of protection. The $50,000 amount was incorrectly charged to Misc. Expense  Make any necessary adjusting entries. 1 ACC 309 Final Project Guidelines and Rubric Overview In the accounting field, you will often be expected to both enter calculations accurately and articulate what this information means to internal and external stakeholders. In addition, you will be expected to propose financial solutions when a company is faced with a policy change, or when the company’s regulations change. For this project, imagine that you have just started in a new role as a financial accountant preparing for a year-end audit. In addition, you are charged with showing the financial impacts of the company’s recent initiatives. You will revise year-end financial statements to reflect these changes, compose notes to the financial statements, and compose an executive summary to explain the impacts to stakeholders. You will create these documents based on information in the Final Project Scenario and Final Project Workbook. In this assignment, you will demonstrate your mastery of the following course competencies:  ACC-309-01: Revise financial statements in accordance with applicable rules and regulations  ACC-309-02: Analyze the financial impact of changes to an organization by internal and external factors  ACC-309-03: Demonstrate ethical conduct in the process of correcting accounting records Prompt Specifically, the following critical elements must be addressed. Most of the critical elements align with a particular course competency (shown in brackets). I. Workbook: Calculate relevant ratios, payouts, obligations, and prepare appropriate adjusting entries and revised financial statements. Be sure to complete all tabs in the spreadsheet. A. Calculate capital lease obligations for determining debt and depreciation. [ACC-309-02] B. Calculate pension payouts to determine the company’s financial obligations. [ACC-309-01] C. Prepare appropriate adjusting entries. [ACC-309-01] D. Complete the Adjusted Trial Balance. [ACC-309-01] E. Prepare revised financial statements for year-end audit that flow logically within the document. [ACC-309-01] F. Prepare a statement of comprehensive income to ensure alignment with applicable rules and regulations. [ACC-309-01] G. Determine the impact on earnings per share [ACC-309-02] H. Prepare financial statements for year-end audit with appropriate changes that flow logically within the document. [ACC-309-01] https://learn.snhu.edu/d2l/lor/viewer/view.d2l?ou=6606&loIdentId=20232 https://learn.snhu.edu/d2l/lor/viewer/view.d2l?ou=6606&loIdentId=23033 2 II. Notes to the Financial Statements A. Compose appropriate footnotes within a statement of comprehensive income in accordance with applicable accounting standards, such as GAAP, International Financial Reporting Standards, and SEC, as applicable. [ACC-309-03] III. Executive Summary: Compose a report that appropriately communicates the impact of revisions to stakeholders. A. Identify sources of other comprehensive income not included in net income. [ACC-309-01] B. Explain rationale for inclusion as comprehensive income (as opposed to net income) of nondisclosure within notes. [ACC-309-02] C. Evaluate impacts of company goals and finances for their implications on stockholder equity, using financial information to support claims. [ACC-309-02] D. Evaluate impacts of company goals and finances for their implications on retained earnings per share, using financial information to support claims. [ACC-309-02] E. Explain the impact of issuing preferred stock or debt for determining changes to equity structures. [ACC-309-02] F. Assess the impact of changes to current tax structure for articulating changes relevant to the company. [ACC-309-02] G. Explain the implications of capital lease based on how it relates to the company’s equipment usage. [ACC-30-02] H. Explain how postretirement plans will impact the company financially in the short and long term, using examples from the workbook to support claims. [ACC-309-02] I. Evaluate the company’s current performance based on the outcomes of relevant ratio analysis. [ACC-309-02] J. Discuss types of accounting changes encountered and when retrospective and prospective approaches should be used. [ACC-309-02] K. Predict the impact of new credit policies or a change in product or markets based on relevant ratio analysis. [ACC-309-02] L. Discuss relevant accounting standards for informing the company’s financial reporting strategies. [ACC-309-03] M. Explain how the four-step process was used for effectively correcting and reporting errors in the revision process. [ACC-309-03] Milestones Milestone One In Module Three, you will develop a portion of the workbook and a brief memo to management explaining the impacts to stockholder equity and the impact of tax structures. This milestone will be graded with the Milestone One Rubric. Milestone Two In Module Five, you will develop a portion of the workbook and a brief memo to management explaining the impacts of accounting for postretirement benefits and revision processes. This milestone will be graded with the Milestone Two Rubric. Final Project Submission: Workbook, Notes to the Financial Statements, and Executive Summary 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. 3 In addition to revising your milestone work, make sure that you include the following elements from the prompt above, which were not included in the milestones: I. Workbook A. Prepare appropriate adjusting entries and complete the Adjusted Trial Balance. [ACC-309-01] B. Prepare revised financial statements for year-end audit that flow logically within the document. [ACC-309-01] C. Determine the impact on earnings per share [ACC-309-02] II. Notes to the Financial Statements A. Compose appropriate footnotes within a statement of comprehensive income in accordance with applicable accounting standards, such as GAAP, International Financial Reporting Standards, and SEC, as applicable. [ACC-309-03] III. Executive Summary A. Evaluate the company’s current performance based on the outcomes of relevant ratio analysis. [ACC-309-02] B. Discuss types of accounting changes encountered and when retrospective and prospective approaches should be used. [ACC-309-02] C. Predict the impact of new credit policies or a change in product or markets based on relevant ratio analysis. [ACC-309-02] D. Discuss relevant accounting standards for informing the company’s financial reporting strategies. [ACC-309-03] E. Explain how the four-step process was used for effectively correcting and reporting errors in the revision process. [ACC-309-03] Final Project Rubric Guidelines for Submission: Your workbook must be submitted as a MS Excel Document, and your Executive Summary must be 2-3 pages in length and must be 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 Workbook: Capital Lease Obligations [ACC-309-02] Calculate capital