1 ACCT 309 Final Project Xiufang Chai Southern New Hampshire University
2 Notes to the statement of comprehensive income for the year ended 31 December 20XX According to IFRS, since Peyton has marketable securities on the balance sheet at a cost of $5,500,000 are available-for-sale, and market value at the balance sheet date is $5,235,000, by calculating that we can arrive at Unrealized loss on Marketable Securities -Available for Sale of $ 265,000 which should be recorded in balance sheet. The gain/loss based on the market rate is disclosed in other comprehensive income. The Income Taxes Currently Payable on the balance sheet increased by $375, which deducted from the meal and entertainment expenses $1,500 on the book. The income tax expense is increased by $375($1,500 * 25%=$375 20% federal, 5% state), the net income was decreased by $375. The deferred tax liability is increased by $52,325.25 ($209,301 * 25%) on balance sheet, which indicates the extra tax deduction of $209,301 under MACRS should be adjusted to increase tax expense and liability on the book. The annuity due factor for this lease’s present value is $106,590 (based on 6 years, 5%, annuity due calculation). On the balance sheet, the lease liability is increased by $86,590 ($106,590- $20,000). Therefore, the interest expense on capital lease obligation will be increased base on the rate at the deduction of principle. The interest expense will be $4,329.48 in the next year payment. The estimate accrued pension liability is $107,041.70 and accrued employee health insurance liability is $43,718.91. On the balance sheet, the current liabilities have been increased by the accrued pension liability and health insurance liability. The $2500 annual patent amortization expense will be shown on income statement, and the net of amortization intangible asset patent is recorded under balance sheet as long-term asset and it will be decreased after the amortization. Peyton repaired the packaging machine at coast or $27,000 in the future four years, so the depreciation expense and accumulate depreciation expense will be increased next four-year use of straight-line depreciation method.
3 Executive Summary 1. The rationale for recognizing in other comprehensive income is the gain/loss on marketable securities in unrealized as on balance sheet date. It is just a revaluation based on market rate. Comprehensive income includes net income and other comprehensive income. The other comprehensive income has the volatile nature such as the unrealized loss on marketable securities due to the change of market price, so comprehensive income is more susceptible to be changed. Net income represents the change in the certain period in the business’s financial circumstances of revenue-producing operation while comprehensive income contains the element of catch-all term from other comprehensive income which represents the change in equity from non-owner sources.
- Fall '17
- Sean Cote
- Balance Sheet, Peyton