Use the data from this Milestone and begin working on your final presentation

Use the data from this milestone and begin working on

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Use the data from this Milestone and begin working on your final presentation due in Week 7 ITEMS TO COMPLETE FOR THIS MILESTONE: GENERAL CAPITAL LEASES Calculate capital lease obligations Prepare appropriate adjusting entries PENSION PAYOUTS Calculate pension liability Calculate health insurance liability ADJUSTING ENTRIES Prepare adjusting entries for capital lease obligations Prepare adjusting entries for pension payouts FINANCIAL INFORMATION FOR THIS MILESTONE 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 ent balance 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, u 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 empl 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 pens · 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 run interest rate of 5%. At the end of the 6 years, Peyton will own them. Make any necessary adjusti
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tries and post to the trial e. using examples from the HOME
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loyees. Management has sion liability of $107,041.70. ns for 6 years with an implicit ting entries.
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Capital Leases Years Lease Payment Discount Rate Present Value 1 $ 20,000.00 0.952381 19,047.62 2 $ 20,000.00 0.907029 18,140.58 3 $ 20,000.00 0.863838 17,276.76 4 $ 20,000.00 0.822702 16,454.04 5 $ 20,000.00 0.783526 15,670.52 6 $ 20,000.00 0.746215 14,924.30 L.O. 101,513.82 Present Value $ 101,513.82 Implicit Interest Rate 5% Years Lease Payment Lease Rental 1 $ 20,000.00 $ 5,075.69 $ 14,924.31 2 $ 20,000.00 $ 4,329.48 $ 15,670.52 3 $ 20,000.00 $ 3,545.95 $ 16,454.05 4 $ 20,000.00 $ 2,723.25 $ 17,276.75 5 $ 20,000.00 $ 1,859.41 $ 18,140.59 6 $ 20,000.00 $ 952.38 $ 19,047.62 Pension payout Short-Term Pension Liability $ 107,041.70 $ 43,718.91 Long-Term Pension Liability $ 63,322.79 $ 43,718.91 Capital Leases $20,000.00 x 5.329477= $106589.54 Interest Finance Charges* Health Insurance Liability Health Insurance Liability Capital Lease Obligation = $106589.84
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Payment 1 $ 20,000.00 $ 20,000.00 2 $ 20,000.00 $ 4,329.48 $ 15,670.52 3 $ 20,000.00 $ 3,545.95 $ 16,454.05 4 $ 20,000.00 $ 2,723.25 $ 17,276.75 5 $ 20,000.00 $ 1,859.41 $ 18,140.59 6 $ 20,000.00 $ 952.38 $ 19,047.63 $ 13,410.47 $106,589.54 The company leases the ovens on 12/31/17 with an im factor is 5.3295. The correct PV. The They make a payment of $20,000 the same day. There The payment just reduces the lease So the adjustments are: 43465 $106,589.40 Lease Equipment To record the aquistion of the lease 43465 Lease Equipment $20,000.00 To correct intial recording of equipment lease aquistion under rent expenes accou Pension 31-Dec Pension Expense Accrued Pension Liability 31-Dec Retired Employees Health Ins.
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  • Fall '15
  • Balance Sheet, Generally Accepted Accounting Principles, Peyton

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