QUICKBOOKS PRO 2008 WORKSHOP 6 THE CORNER DRESS SHOP

Transcription

1 QUICKBOOKS PRO WORKSHOP 6 THE CORNER DRESS SHOP Mini Practice Set Reviewing the Accounting Cycle for a Merchandise Company This workshop will help you review the key concepts of a merchandise company by asking you to complete customer, vendor, payroll and general ledger activities in QuickBooks. The tasks in this workshop correspond to the manual mini practice set for The Corner Dress Shop appearing at the end of Chapter 12. The QuickBooks skills used in this workshop were learned in previous workshops so be sure to complete Workshops 1 through 5 before beginning this one. You will need to download The Corner Dress Shop data file for QuickBooks from the MyAccountingLab website before beginning this workshop. Refer to the Installing QuickBooks Pro and Student Data Files document for instructions on downloading this file. You are the bookkeeper for The Corner Dress Shop so we have gathered the following information for you. It will be your task to complete the accounting cycle for March. The Corner Dress Shop is owned by Betty Loeb and is located at 1 Milgate Road, Marblehead, Massachusetts, What follows is the trial balance for February 29,.

2 QuickBooks Pro Workshop 6 The Corner Dress Shop Page 2 In addition, the company had the following beginning balances in accounts receivable and accounts payable. Accounts Receivable Beginning Balance Bing Company $2,200 Accounts Payable Beginning Balance Blew Company $1,900

3 QuickBooks Pro Workshop 6 The Corner Dress Shop Page 3 The business employs three people who are paid once per month at the end of the month. Paychecks are printed out of the cash account. Information for March salaries follows. March Mel Case $3,325 Jane Holl 4,120 Jackie Moore 4,760 We used the following tax rates to calculate employee tax withholdings and employer payroll taxes. 1. FICA tax rates a) OASDI rate is 6.2 percent on first $102,000 of gross wages per year. b) Medicare rate is 1.45 percent of annual gross wages. 2. FIT rate a) Refer to the tax table for this problem that is illustrated in the text. 3. SIT rate is 7 percent of gross wages. 4. SUTA rate is 4.8 percent of the first $7,000 in gross wages paid to each employee per year. 5. FUTA rate is 0.8 percent of the first $7,000 in gross wages paid to each employee per year. You are now ready to begin the tasks of this workshop. Open the Company Data File 1. Begin by opening QuickBooks Pro and then open the data file named The Corner Dress Shop. Add Your Name to the Company Name 2. Click Company on the main menu and select Company Information. Add your name or initials to the end of the company name and click OK to store the changes. Printing an Inventory Valuation Report 3. You should review company inventory information before posting transactions. Click Reports on the main menu and point to Inventory to select Inventory Valuation Detail. Enter the date range of 2/28/.

4 QuickBooks Pro Workshop 6 The Corner Dress Shop Page 4 This report provides information on the 6 items of inventory sold by the company, including the beginning quantity on hand, average cost, and total value of inventory. Print this report so you can compare it to a report you will print at the end of the workshop. Maintaining Inventory Items 4. QuickBooks Inventory module tracks inventory items, including item number, description, sales price, purchase cost, and on hand quantities. You will be asked to change inventory sales prices in the workshop so let us look at maintaining inventory items. a) Click Lists on the main menu and select Item List. b) Double click the last item called 6000 Dress, Style Review information in the next illustration and the explanation that follows. The Description fields are used to describe the item on vendor bills (i.e., purchase transactions) and customer invoices (i.e., sales transactions). These can be different descriptions. If a change is needed, you simply place the cursor in the field and edit. The Cost and Sales Price fields are explained on the illustration.

5 QuickBooks Pro Workshop 6 The Corner Dress Shop Page 5 Notice the posting accounts. When items are sold to customers, the software will debit account 510 Cost of Goods Sold and credit account 410 Sales. When items are purchased from vendors, the software will debit 114 Merchandise Inventory. Finally, you can also find stock information. There are currently twenty two of these items on hand, carrying an average cost of $50.00 each. QuickBooks will only accommodate using the average cost inventory valuation method, which means you cannot use LIFO or FIFO. c) Click OK to exit the Edit Item window. d) Click X to close the Item List. Record March Transactions 5. You are now ready to record the following transactions. We have identified the appropriate transaction window to use based on the following: General Journal (GJ) Create Invoices (I) Customer Credit Memos/Refunds (CM) Receipts (R) Vendor Bills and Credit Memos (B) Pay Bills (P) Pay Employees (PE) Pay Liabilities (PL) Note: When recording customer invoices for Blew use the Blew Company account and when recording vendor bills use the Blew Company Vendor account. 1 Received check number 7634 for $2,200 from Bing Company paying the beginning balance with no discount. (Note: Change the Deposit to account to 110 Cash.) (R)

6 QuickBooks Pro Workshop 6 The Corner Dress Shop Page 6 2 Purchased the following merchandise from Morris Company on account. Invoice number 1210 for $10,000. Terms of 2/10, n/30. (Note: Make sure you always enter information for inventory purchases on the Items tab.) (B) 184 Style 1000 Dresses 180 Style 2000 Dresses 3 Sold the following merchandise to Ronald Company on account. Invoice number 51 for $7,000. Terms of 2/10, n/30. (Note: Change the Invoice # to 51 ) (I) 48 Style 1000 Dresses 30 Style 2000 Dresses 8 Style 3000 Dresses 9 Style 4000 Dresses 6 Style 5000 Dresses 7 Style 6000 Dresses 6 Sold the following merchandise to Ronald Company on account. Invoice number 52 for $5,000. Terms of 2/10, n/30. (I) 47 Style 1000 Dresses 24 Style 2000 Dresses 5 Style 3000 Dresses 3 Style 5000 Dresses 4 Style 6000 Dresses 9 Purchased the following merchandise from Morris Company on account. Invoice number 1286 for $5,000. Terms of 2/10, n/30. (B) 92 Style 1000 Dresses 90 Style 2000 Dresses

7 QuickBooks Pro Workshop 6 The Corner Dress Shop Page 7 9 Sold merchandise to Ronald Company on account. Invoice number 53 for $3,000. Terms of 2/10, n/30. (I) 18 Style 1000 Dresses 20 Style 2000 Dresses 4 Style 3000 Dresses 1 Style 4000 Dresses 4 Style 5000 Dresses 9 Issued check number 110 for $300 to Rhonda s Cleaning Service for cleaning services. (Note: Use the Write Checks icon under the Banking section of the Home page. After entering information, print the check on check number 110 and then click Save & Close on the transaction.) 10 Ronald Company returned the following merchandise costing $1,000 on invoice number 52. Issued credit memo number CM10. These items are being returned to inventory. Remember to apply the credit memo to the invoice. (Note: By default, the software credits the sales account. There is no option on the window to change the posting account to sales returns and allowances.) (CM) 5 Style 1000 Dresses 5 Style 2000 Dresses 3 Style 3000 Dresses 2 Style 6000 Dresses 11 Purchased the following merchandise from Jones Company on account. Invoice number 4639 for $10,000. Terms 1/15, n/60. (B) 144 Style 3000 Dresses 124 Style 4000 Dresses

8 QuickBooks Pro Workshop 6 The Corner Dress Shop Page 8 12 Sold the following merchandise for $7,000 in cash. Note: Use the Enter Sales Receipts window. To open this window, click the Create Sales Receipt icon. Set the Deposit To account to 110 Cash and accept the Sale No. provided by the software. 24 Style 1000 Dresses 28 Style 2000 Dresses 24 Style 3000 Dresses 26 Style 4000 Dresses 1 Style 6000 Dresses 12 Issued check number 111 for $9,800 to Morris Company paying invoice number 1210, less 2 percent discount of $200. (P) 14 Returned the following merchandise to Jones Company costing $2,000 on invoice number Vendor issued credit memo number DM4. (B) 32 Style 3000 Dresses 22 Style 4000 Dresses 15 Due to increased operating costs, The Corner Dress Shop must raise sales prices as follows. Make these changes to the items. Item New Sales Price Style 1000 Dresses $60.00 Style 2000 Dresses $70.00 Style 3000 Dresses $80.00 Style 4000 Dresses $90.00 Style 5000 Dresses $ Style 6000 Dresses $120.00

9 QuickBooks Pro Workshop 6 The Corner Dress Shop Page 9 15 Sold the following merchandise for $29,000 in cash. Use the Create Sales Receipts icon and accept the Sale No. provided by the software. 124 Style 1000 Dresses 144 Style 2000 Dresses 72 Style 3000 Dresses 61 Style 4000 Dresses 1 Style 5000 Dresses 1 Style 6000 Dresses 15 Paid the FICA (OASDI and Medicare), FIT, and SIT tax liabilities for the period of 1/1/08 to 2/29/08. Print on starting check number 112. (Note: Click No if prompted to sign up for payroll.) Refer back to Workshop 4 if you need assistance on paying tax liabilities. (PL) 15 The owner, Betty Loeb, paid herself $100 for personal expenses. Use the Write Checks window and print on check number Received check number 5432 for $3, from Ronald Company paying invoice number 52, less 2 percent discount of $ (R) 16 Received check number 5447 for $7,000 from Ronald Company paying invoice number 51 with no discount. (R) 16 Sold the following merchandise to Bing Company on account. Invoice number 54 for $3,200. Terms of 2/10, n/30. (I) 12 Style 1000 Dresses 10 Style 2000 Dresses 11 Style 3000 Dresses 10 Style 4000 Dresses 21 Purchased a delivery truck on account from Moe's Garage. Invoice number 7113 for $17,200. Terms of n/30. (B)

10 QuickBooks Pro Workshop 6 The Corner Dress Shop Page Sold the following merchandise to Ronald Company on account. Invoice number 55 for $4,000. Terms of 2/10, n/30. (I) 24 Style 1000 Dresses 24 Style 2000 Dresses 3 Style 3000 Dresses 2 Style 4000 Dresses 2 Style 5000 Dresses 2 Style 6000 Dresses 23 Issued check number 115 for $7,920 to Jones Company paying invoice number 4639, less 1 percent discount of $80. (P) 24 Sold the following merchandise to Bing Company on account. Invoice number 56 for $2,000. Terms of 2/10 n/30. (I) 1 Style 2000 Dresses 10 Style 3000 Dresses 10 Style 4000 Dresses 1 Style 5000 Dresses 1 Style 6000 Dresses 25 Purchased the following merchandise for $1,000 from Jones Company. Use the Write Checks window and select the Items tab. Print on check number Style 3000 Dresses 11 Style 4000 Dresses 27 Purchased the following merchandise from Blew Company on account. Invoice number 437 for $6,000. Terms of 2/10, n/30. (B) 60 Style 5000 Dresses 66 Style 6000 Dresses

11 QuickBooks Pro Workshop 6 The Corner Dress Shop Page Received check number 5562 for $3,920 from Ronald Company paying invoice number 55, less 2 percent discount of $80. (R) 28 Received check number 8127 for $3,200 from Bing Company paying invoice number 54 with no discount. (R) 29 Purchased the following merchandise from Morris Company on account. Invoice number 1347 for $9,000. Terms of 2/10, n/30. The vendor has increased prices so enter the new prices as listed. Click Yes to update items for the new cost. (B) New Price 150 Style 1000 Dresses $ Style 2000 Dresses $ Sold the following merchandise to Blew Company on account. Invoice number 57 for $10,000. Terms of 2/10, n/30. (I) 6 Style 3000 Dresses 5 Style 4000 Dresses 41 Style 5000 Dresses 38 Style 6000 Dresses 30 Issued a check for $31 to replenish the petty cash fund for the following March expenses. Use Write Checks window. Select the Petty Cash vendor and record the amounts in the appropriate GL Account. Print on check number 117. Expense Amount Cleaning expense $6.00 Postage expense $5.00 Delivery expense $10.00 Miscellaneous expense $10.00

12 QuickBooks Pro Workshop 6 The Corner Dress Shop Page Issued the following payroll checks for the pay ending date of March 31. Print checks out of the cash account on starting check number 118. Enter payroll information using the following information. (PE) Emp. Gross FIT OASDI Med. SIT Emp. Net FUTA SUTA Mel Case $3, , Jane Holl $4, , Jackie Moore $4, , Print Working Reports 6. Print the following reports. a. Trial Balance for March 31 (Total = $125,093.81) b. A/R Aging Detail for March 31 (Total = $15,000.00) c. A/P Aging Detail for March 31(Total = $39,100.00) d. Employee Earnings Summary for March 31 (Total = $10,171.25) Record March Adjusting Entries 7. Record the following general journal adjusting entries on March 31,. Enter 1 as the Entry No. a. Expired rent of $600. b. Truck depreciation of $150. c. Earned rental income of $200. d. You do not need to adjust inventory because the software uses a perpetual inventory system and costs of goods sold posts at the time of sale. Furthermore, the software uses an average inventory costing system, which specifically identifies the cost of items sold. Finally, you will notice that the ending inventory balance in the workshop is $13,950, which differs from the ending inventory balance in the manual problem in the text. This occurred because the merchandise returned on March 14 went back into inventory and a purchase price increase for inventory occurred on March 29. Consequently, March cost of goods sold for the workshop will differ from cost of goods sold results in the manual problem. The check figure for cost of goods sold is $30,

13 QuickBooks Pro Workshop 6 The Corner Dress Shop Page 13 Print Final Reports 8. After posting the adjusting journal entries, close the General Journal Entry window and print the following reports. a. Journal for March 1 to March 31 (Total = $219,384.68) b. Trial Balance for March 31 (Total = $125,243.81) c. Standard Balance Sheet for March 31 (Total Capital = $33,619.82) d. Standard Profit & Loss for March 1 to March 31 (Net Income = $24,616.72) e. Inventory Valuation Report Summary for March 31 (Asset Value = $13,950.00) 9. Compare the Inventory Valuation Report with the one printed at the beginning of the workshop. Notice that QuickBooks has created a new average cost for items sold and purchased during the month. Close the Accounting Period 10. Back up your work and include the company name. 11. Close the accounting period by setting the date to 3/31/. 12. You have completed this workshop and can now exit the software.