ACC 309 Final Project.docx - ACC 309 Final Project 1 ACC...

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ACC 309 Final Project 1 ACC 309 Final Project: Peyton Approved Yaridis Rodriguez Southern New Hampshire University April 12, 2020
ACC 309 Final Project 2 Final Project: Peyton Approved Peyton Approved has developed tremendous growth in the past three years, they are now well-known for their bakery chain for pet products. They have introduced delivery to several regional locations and have become a publicly traded company. This has brought great impact on stockholders’ equity and impacts based on changed to tax structures. They have rented six ovens, for six years and at the end of the capital lease they will be owned by Peyton Approved. They have also established a postretirement benefit policy for its employees. Comprehensive Income and Other Comprehensive Income Comprehensive income is the change in equity of a company during a period, from the income statement to other comprehensive income. Different types of equity changes are transactions, other events, and circumstances relating to nonowner sources; includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. While other comprehensive income is income items that the FASB has designated to be recognized in AOCI until they are realized, at which time they are recognized in net income. (Wahlen, 2017) Sources of other comprehensive that are not included in the net income would be realized gains/losses from investments, pension funds, or foreign transactions. Peyton Approved has other comprehensive incomes such as pension expense and market securities. The comprehensive income shows change in the company’s equity versus net income. Available for sale marketable securities, should be listed on the company’s comprehensive income as unrealized loss. The Marketable Securities is listed at $5,500,000 on the balance sheet, however current fair market value of the securities is $5,235,000, resulting in a variance reported in Other Comprehensive Income as an unrealized loss of $265,000. If the marketable securities are sold, the loss would then become realized and recognized in net income. Lastly the company repaired
ACC 309 Final Project 3 its packing machine for $27,000, projected to function for four years and the cost was listed under an increase to baking equipment assets. Stockholder Equity When evaluating the company’s stockholder’s equity, all so known as shareholder’s equity, it is important to note that the shareholder’s equity is the difference between the company assets and liabilities. (Saint-Leger, n.d.) The stockholder’s equity is the remainder of assets, after all liabilities have been satisfied. Payton Approved has opened up two new storefront locations and launched a new marketing campaign, that was estimated to bring in 20,000 new customers over the next six months. The company will require additional capital but will generate additional after-tax profit. They have provided us with three scenarios. Option one would imply a convertible preferred stock, this would decrease due to the $100,000 dividend that would be played out. Option two would obligate the company to a higher tax-deductible interest but could

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