Overview: You just began a position as a financial accountant at Peyton Approved. In this role, your first task is to prepare the company’s 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.
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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. 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. |
Please help me prepare the revised cash flow sheet as well as the ratio analysis sheet.
solution :
given that Rundle Freight Company owns a truck that cost $33,000.
also given that Currently, the truck’s book value is $27,000, and its expected remaining useful life is five years
mentioned in gi ven indormation that
Rundle has the opportunity to purchase for $28,000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $7,000 per year more than fuel cost for the new truck.
some other given information The old truck is paid for but, in spite of being in good condition, can be sold for only $16,000.
Calculating the total relevant costs:
retaining truck | replacing truck | |
cost of the new truck | $- | $28000 |
additional fuel cost (5*7000) | $35000 | $- |
oppurtunity cost | $16000 | $- |
total cost | $51000 | $28000 |
final decision of retaining old truck :
the purchase cost of ol;d truck and book value are irrelevant
they are sunk cost
therefore they should not be considered
the comparision cost of replacing and retaining truck are given above
from the above table
the company should replace the old truck as it would cost $28000 in replacement as against the cost of reraining truck of $51000
Overview: You just began a position as a financial accountant at Peyton Approved. In this role, y...
Overview: You just began a position as a financial accountant at Peyton Approved. In this role, your first task is to prepare the company’s 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...
You just began a position as a financial accountant at Peyton Approved. In this role, your first task is to prepare the company’s 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. 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...
Overview: You just began a position as a financial accountant at Peyton Approved. In this role, your first task is to prepare the company’s 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...
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