Question

For the person who last answered, you missed page 1. You posted page 2 twice.... can someone please help me with this. Thanks!

ACC 309 Final Project Scenario Peyton Approved Overvieww 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 . e . 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 $5,235,00 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 the 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 wil 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

Answer 1

1. Unrealised loss would be Market Value-Marketable value of the securities. hence it would be $55,00,000- $52,35,000 = $ 2,65,000/-. we can adjust the same in our Reserves & Surplus.

2. $1,500 was shown as permanent difference but its. we have not considered DTA on such value. now we need to creat it. we will take tax benefit of the same.

DTA Dr.

To Provision for Tax

in case of depreciation as per tax is higher than depreciation as per books. then we have to create DTL on such difference. entry will be:

Prov for tax Dr.

To DTL