Postretirement Benefits INSTRUCTIONS FOR MILESTONE 2 Due Week 5 Make sure to

Postretirement benefits instructions for milestone 2

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Postretirement Benefits INSTRUCTIONS FOR MILESTONE 2 (Due Week 5) Make sure to completely review the Rubric for Milestone 2 In preparation of the annual audit, make calculations (green tab) and prepare appropriate adjusting entr workbook (red tab) MANAGEMENT BRIEF - Prepare i n a Word document - see the rubric for milestone 2 A. Explain the implications of capital lease based on how it relates to the company’s equipment usage. B. Explain how postretirement plans will impact the company financially in the short and long term, us accounting workbook to support claims.
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Leases Peyton Approved has revised its postretirement plan. It will now provide health insurance to retired emplo 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 pensi · The estimated cost of retired employees’ health insurance is $43,718.91. · Prepare adjusting entries for the pension liability and the health insurance liability · Six ovens were rented on December 31, with $20,000 charged to rent expense. The lease runs interest rate of 5%. At the end of the 6 years, Peyton will own them. Make any necessary adjustin
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ries and post to the trial balance . sing examples from the HOME
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oyees. Management has ion liability of $107,041.70. s for 6 years with an implicit ng entries.
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Capital Leases Payment# Lease Payment PVF @ 5% Present Value 0 1 $ 20,000.00 1 $ 20,000.00 1 2 $ 20,000.00 0.9523809524 $ 19,047.62 2 3 $ 20,000.00 0.9070294785 $ 18,140.59 3 4 $ 20,000.00 0.8638375985 $ 17,276.75 4 5 $ 20,000.00 0.8227024748 $ 16,454.05 5 6 $ 20,000.00 0.7835261665 $ 15,670.52 Fair Value of Lease Obligation $ 106,589.53 Payment Interest Expense Lease Obligation 1 $ 20,000.00 $ 20,000.00 $ 86,589.53 Balance after payment 2 $ 20,000.00 $ 4,329.50 $ 19,047.62 $ 67,541.91 3 $ 20,000.00 $ 3,545.98 $ 18,140.59 $ 49,401.32 4 $ 20,000.00 $ 2,723.27 $ 17,276.75 $ 32,124.57 5 $ 20,000.00 $ 1,859.44 $ 16,454.05 $ 15,670.52 6 $ 20,000.00 $ 952.41 $ 15,670.52 $ - 120,000.00 13,410.60 $ (106,589.53) The ovens were leased on 12-31-2017 , a payment of $20,000.00 was made immediately. It There is neither interest nor depreciation on the day the lease is signed. The payment made Adjusting Entries for lease obligation 31-Dec Equipment 106,589.40 Lease Equipment 106,589.40 To record the acquistion of the lease obligation asset and liability. 31-Dec Lease Equipment 20,000.00 Rent Expense 20,000.00 To correct initial recording of equipment lease acquistion under rent expenses account. Lease obligation would ha Pension Payouts *The company is currently employing 60, and actuaries estimate that the company has a pe *The estimated cost of retired employee's health insurance is $43,718.91. 31-Dec Pension Expense 107,041.70 Accured Pension Expense 107,041.70 Lease Obligation Reduced by
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31-Dec Retired Employee Health Ins. 43,718.91 Accured Employee Health Ins. 43,718.91
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t is a 6 year lease with 5% annuity due. The correct PV factor is 5.3295. They should capitalize the asset e reduces the lease obligation by $20,000.00 ave been correct account. ension liability of $107,041.70. HOME
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at $106,590 (20,000 X 5.3295) with a credit to lease obligation.
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Southern New Hampshire University ACC309 - Intermediate Accounting III IMPORTANT NOTE: This page contains new information the must be included in the final project but has not been in milest ITEMS TO COMPLETE FOR THIS MILESTONE: GENERAL ADJUSTING ENTRIES Prepare appropriate adjusting entries for patent Prepare appropriate adjusting entries for capitalization of machine repair ADJUSTED TRIAL BALANCE Prepare the adjusted trial balance REVISED FINANCIAL STATEMENTS
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