The second part of your assignment requires you to process the transaction and adjustments in QuickBooks to confirm the results in your Excel file. A QuickBooks template with accounts and balances in place has already been prepared.
Accessing QuickBooks at QUT
Open Blackboard and go to the Quickbooks file in the Assessment Item 2 folder. Save the QuickBooks file â€˜Advertising Revolution Student Templateâ€™ to your USB, H drive, or other
storage device. Rename the file by substituting your family name and student number in place of â€˜Student templateâ€™ in the file name
1. In the computer lab, click on screen and enter username (student number) and password
2. Load QuickBooks by clicking on either (a) the shortcut on the desktop, or (b) :
Start Ã¨ All Programs Ã¨ QuickBooks Ã¨ QuickBooks Premier â€“ Student Edition V19
3. On the â€˜Welcome to QuickBooksâ€™ screen click on Ã¨ Open an existing company file Ã¨ Restore a backup copy (.QBB) Ã¨ Local Backup Ã¨ and then go to the drive where you stored the file in (1) above and click on the file.
4. QuickBooks will then ask where you wish to store the file. Select you preferred location (USB or H drive) and the Quickbooks will save the data to the selected drive. A dialogue box with â€˜Your data has been restored successfullyâ€™ will display Click OK. Your file is now open and you are ready to process transactions.
Personalise your file
It is a requirement of the assignment that you incorporate your family name and student number in the firm name. Click on â€˜Companyâ€™ in the toolbar and a dialogue box titled â€˜Company Informationâ€™ will open. In the â€˜Company Nameâ€™ box insert your family name and student number after â€˜Advertising Revolutionâ€™. Click â€˜OKâ€™.
The â€˜Homeâ€™ page (see screen shot above) is where you will process all your transactions. Each transaction will be processed by clicking on the appropriate icon.
Before attempting to process the transactions in the Advertising Revolution file we need to practice processing transactions in a separate file. Close your Advertising Revolution file (File, Close Company â€“ in future when you wish to access this file open the .QBW file) Download the Training Exercise file and save it with a different file name from your assignment.
The following transactions are for practice only and not part of the assignment:
1. September 1 Paid for prepaid insurance of $2,200 for 12 months effective
1 September (including GST $200) with cheque number 5.
In the â€˜Bankingâ€™ portion of Home page select â€˜Write Chequesâ€™
The cheque dialogue box opens (below) and automatically selects the â€˜ANZ Bank Accountâ€™ as the source of funds
Change the cheque â€˜No.â€™ (top right hand side) from 1 to 5.
Change the date to 1 September 2013 by clicking in the box to the right of the date on the cheque and select 1 September 2013.
Insert $2,200 for the amount of the cheque.
In the payee section (Pay to the order of â€¦) type â€˜Insurance Companyâ€™ and press â€˜Tabâ€™
A dialogue box will open indicating that â€˜Insurance Company is not in the Name Listâ€™
Select â€˜Quick Addâ€™ and then select â€˜Otherâ€™ from the options. Click â€˜OKâ€™
Below the cheque you will see headings titles Account, Tax, Net Amt, etc. Note that the amount of $2200 has been populated in the box under â€˜Net Amtâ€™
Click in the box under â€˜Accountâ€™ and type â€˜Prepaidâ€™. Select â€˜Prepaid Insuranceâ€™
Click on the arrow in the box under â€˜Taxâ€™. Click on â€˜NCGâ€™. Note that the GST amount of $200 has been automatically populated in the Tax box to the right of the Net Amt box, while the Net Amt has reverted to $2000.
The transaction is now complete â€“ click on â€˜Save and Closeâ€™
2. September 6 Received invoice number FR1324 from Iron Press Pty Ltd for fees relating to August advertising placement expense for client advertising in both print and television. The invoice totals $36,300 (including GST $3,300). (Purchased on credit with payment due in 30 days).
In the â€˜Suppliersâ€™ section of the Home page click on â€˜Enter Billsâ€™
In the â€˜Billâ€™ (purple) section amend the date to 6 September 2013, insert FR1324 as the â€˜Ref No.â€™ and $36, 300 as the amount. You may ignore the Bill Due section for our purposes.
Insert â€˜Iron Press Pty Ltdâ€™ as â€˜Supplierâ€™ and hit â€˜Tabâ€™
A dialogue box will open indicating that â€˜Iron Press Pty Ltdâ€™ is not in the Supplier List. Click â€˜Quick Addâ€™
Note that $36,300 has been populated under â€˜Net Amtâ€™ in the boxes below the â€˜Billâ€™.
Click in the box below â€˜Accountâ€™ and type â€˜Advertisingâ€™ ? Click on â€œAdvertising Placement Expenseâ€™. Click on the arrow under â€˜Taxâ€™ and select â€˜NCGâ€™. The GST amount of $3,300 is automatically populated in the â€˜Taxâ€™ amount box and the Net Amt reverts to $33,000. Our transaction is now complete â€“ click on â€˜Save and Closeâ€™.
3. September 6 Kelda received cash from a new client for $13,750 (including GST $1,250) for professional fees relating to design of print advertising that Kelda will complete in July. (Use Fees Revenue Account) In QB select â€˜Record Depositsâ€™
In the â€˜Bankingâ€™ section select â€˜Record Depositsâ€™. Note that the ANZ bank account has been selected automatically in the dialogue box. Amend date to 6 September 2013. Under â€œFrom Accountâ€™ type and select â€˜Fees Revenueâ€™ $12,500 and â€˜GST Clearingâ€™ $1,250. Click on â€˜Save and Closeâ€™.
4. September 9 Provided services on credit to Envisage Real Estate to design signage, Invoice Number AR873 $5500 (including GST $500).
In QB select â€˜Invoicesâ€™. In the dialogue box select â€˜Envisage Real Estateâ€™ as â€˜Customer; Jobâ€™, enter the transaction date and Invoice no AR873. Click in the box under â€˜Itemâ€™ and select â€˜Add newâ€™. A â€˜New Itemâ€™ dialogue box will open â€“ select/type â€˜Serviceâ€™ under â€˜Typeâ€™ and enter â€˜Serviceâ€™ in the â€˜Item Name /Numberâ€™ box. Click on the down arrow next to â€˜Tax Codeâ€™ and select â€˜GSTâ€™. In the â€˜Accountâ€™ box type â€˜Fees Revenueâ€™ and click â€˜OKâ€™.
In the â€˜Create Invoiceâ€™ dialogue box input $5,000 under price and press tab. From the drop down menu under â€˜Taxâ€™ select â€˜GSTâ€™. The â€˜TAX AMTâ€™ box will automatically be populated. The entry is now complete â€“ press â€˜Save and Closeâ€™.
5. September 10 Paid Wholesale Press $36,800 with cheque number 91 as part payment of prior month expenditure. In QB select â€˜Pay Billsâ€™
In the â€˜Suppliersâ€™ section click on â€˜Pay Billsâ€™. â€˜Tickâ€™ the box next to â€˜Wholesaleâ€™ Pressâ€™ or select â€˜Wholesale Pressâ€™ in the â€˜Show Bills Forâ€™ box. As we are only making a part payment click in the â€˜Amt. to Payâ€™ box, clear the contents and input $36,800 and press â€˜Tabâ€™. Click on the â€˜Assign cheque #â€™ box and amend the â€˜Payment Dateâ€™ to 10 September 2013. Press â€˜Pay Selected Billsâ€™ and the â€˜Assign Cheque Numbersâ€™ dialogue box will open. The cheque details are already entered â€“ we just need to input cheque no. â€˜91â€™. Click â€˜OKâ€™.
6. September 16 Received $11,000 from Envisage Real Estate as payment on account.
Click on â€˜Receive Paymentsâ€™ in the â€˜Customerâ€™ section, select â€˜Envisage Real Estateâ€™ under â€œReceived Fromâ€™ and input $11,000 in the amount box. Change the date to 16 September. Select â€˜Chequeâ€™ in the â€˜Pmt. Methodâ€™ section. Ensure that â€˜ANZ Bank Accountâ€™ is selected in the â€˜Deposit toâ€™ box. The transaction is now complete â€“ Click â€˜Save and Closeâ€™.
How to post adjusting entries
In the toolbar at the top of the screen click on â€˜Accountantâ€™. From the dropdown menu select â€˜Make General Journal Entries â€¦â€™. Check the â€˜Adjusting Entryâ€™ box, and amend date to 30/9/13. Under â€˜Accountâ€™ type/select â€˜Insurance expenseâ€™ and insert $1,000 in the Debit column On the next line type/select â€˜Prepaid Insuranceâ€™ and insert $1,000 in the credit column. The transaction is now complete â€“ click â€˜Save and Closeâ€™ or â€˜Save and Newâ€™ for another adjusting entry.
Print an adjusted Trial Balance
In the toolbar at the top of the screen click on â€˜Reportsâ€™. From the dropdown menu select â€˜Accountantâ€™, â€˜Adjusted Trial Balanceâ€™. In the Adjusted Trial Balance box, insert â€˜01/09/2013â€™ in the â€˜Fromâ€™ box and 30/9/2013 in the â€˜Toâ€™ box and click â€˜Refreshâ€™. The Trial Balance on the screen will automatically update. Click on â€˜Printâ€™.
Print a Profit and Loss Statement
In the toolbar at the top click on â€˜Reportsâ€™. Select â€˜Company and Financialâ€™ and â€˜Profit and Loss Standardâ€™.
The Profit and Loss report opens. Input the date range â€“ From 1/9/2013 to 30/9/2013 and click â€˜Refreshâ€™. Note that reported Net Income of -$16,500 (i.e. a loss of $16,500) is identical to the net income reported in the adjusted trial balance (above). Click Print
Print a Balance Sheet
Follow the procedure described above (In the toolbar at the top click on â€˜Reportsâ€™. Select â€˜Company and Financialâ€™ and â€˜Balance Sheetâ€™). Input 30/9/2013 in the â€˜As ofâ€™ date box and click â€˜Refreshâ€™. Click Print.
Now it is time to save and exit the training file, reopen the .QBW Advertising Revolution file and process following the transactions in that file.
Remember, these are the same transactions you input into excel.
The business transactions that occurred in July in the current year are as follows:
1. July 1 Paid for prepaid insurance of $1,980 for 12 months effective 1 July (including GST $180) with cheque number 87. In QB select â€˜Write Chequesâ€™ make the cheque out to â€˜Insurance Companyâ€™ hit Tab, select Quick Add, Other, OK. See Training exercise transaction no. 1.
2. July 1 Purchased a computer on credit from UShop Computers for $5,775 (including GST $525). The computer has a life of 4 years and will have a residual value of $0. (Purchased on credit with payment due in 30 days). In QB select â€˜Enter Billâ€™, Select U Shop Computers as â€˜Supplierâ€™ See Training Exercise no. 2. Select CAG as the Tax code. In QuickBooks use the asset account â€˜Computer Equipment: Original Costâ€™
3. July 1 Received $22,000 (including GST $2,000) as a deposit from a new client for professional fees commencing in July. (Use Unearned Revenue Account). In QB select â€˜Record depositâ€™ and follow process of Training Exercise transaction no. 3.
4. July 2 Kelda withdrew $5, 000 cash for her personal use with cheque number 88. In QB select â€˜Write Chequeâ€™. Make cheque out to â€˜Drawingsâ€™ hit Tab, select Quick Add, Other, OK. See Training exercise transaction no. 1.
5. July 2 Provided services on credit to Envisage Real Estate to design signage, Invoice Number AR873 $5,346 (including GST $486). In QB select â€˜Invoicesâ€™ See Training Exercise transaction no. 4.
6. July 4 Kelda received cash from a new client for $13,750 (including GST $1,250) for professional fees relating to design of print advertising that Kelda will complete in July. (Use Fees Revenue Account) In QB select â€˜Record Depositsâ€™
7. July 6 Purchased office supplies with cheque number 89 for $1,045 (including GST $95) (Use Office Supplies Inventory Account). In QB select â€˜Write Chequesâ€™ Make the cheque out to Office Supplier, hit Tab, select Quick Add, Other, OK. See Training exercise transaction no. 1.
8. July 11 Invoiced Strong Plumbing with Invoice Number AR874 for $42,075 (including GST $3,825) in respect to the design of a TV campaign. In QB select â€˜Invoiceâ€™ See Training Exercise transaction no. 4.
9. July 11 Paid the fortnightly net wages of the assistant and other casual staff of $8,409 with cheque number 90 (no GST is applicable). (This wages cheque must be SPLIT between the wages owing from the previous month $2,673 and the current wages expense $5,736.) In QB select â€˜Write Chequesâ€™ make the cheque out to Wages, hit Tab, select Quick Add, Other, OK. See Training exercise transaction no. 1.
10. July 21 Received an invoice from MTA Travel for $2,750 (including GST $250) in relation to staff travel expenses to attend a conference in July. (Purchased on credit with payment due in 30 days). In QB select â€˜Enter Billsâ€™ When selecting the account to debit you will find that there is no account for â€˜Staff Travel Expenseâ€™. Type â€˜Staff Travel Expenseâ€™ in the â€˜Accountâ€™ box, hit Tab and a dialogue box will open. Click â€˜Set Upâ€™, Expense, and Continue, and â€œSave and Closeâ€™. Use â€˜NCGâ€™ as the tax code.
11. July 21 Paid Wholesale Press $36,800 with cheque number 91 as part payment of prior month expenditure. In QB select â€˜Pay Billsâ€™. Use Training Exercise transaction no. 5 as example. Remember to check the â€˜Assign Chequeâ€™ button
12. July 22 Received $20,000 from Strong Plumbing as payment on account. In QB select â€˜Receive payments. Use Training Exercise transaction 6 as example. Remember to amend â€˜Deposit toâ€™ to ANZ Bank Account
13. July 25 Paid the fortnightly net wages of the PR assistant and other casual staff of $8,730 with cheque number 92 (no GST is applicable). In QB select â€˜Write Chequesâ€™
14. July 26 Paid employer superannuation contributions of $1,687 accrued from the previous month with cheque number 93. (This is a payment of what was owing at the start of the monthâ€”the Superannuation Payable account) In QB select â€˜Write Chequesâ€™. Make the cheque out to Superannuation, hit Tab, Select Quick Add, Other, OK.
15. July 26 Paid the previous monthâ€™s PAYG tax payable $3,256, cheque number 94. In QB select â€˜Write Chequeâ€™ Make the cheque out to â€˜ATOâ€™, hit Tab, Select Quick Add, Other, OK.
16. July 27 Received invoice number CPI7345 from Wholesale Press Pty Ltd for fees relating to July advertising placement expense for client advertising in both print and television. The invoice totals $35,640 (including GST $3,240). (Purchased on credit with payment due in 30 days). In QB select â€˜Enter Billsâ€™. Use Training Exercise example no. 2.
17. July 27 Paid UShop Computers the balance owing $11,770, cheque number 95. In QB select â€˜Pay Billsâ€™. Use Training Exercise transaction no. 5 as example.
18. July 28 Paid MTA Travel $3,585 with cheque number 96 for prior month staff travel. In QB select â€˜Pay Billsâ€™ Use Training Exercise transaction no. 5 as example.
19. July 29 Received $11,000 from Envisage Real Estate as payment on account. In QB select â€˜Receive Paymentsâ€™. Use Training Exercise transaction no. 6 as example.
20. July 29 Kelda lodged her quarterly Business Activity Statement (GST return) and paid the June quarter net GST payable of $16,470 with cheque number 97. (This is GST Clearing account) In QB select â€˜Write Chequeâ€™. Make the cheque out to â€˜ATOâ€™.
21. July 30 Invoiced Devanti Electronics with Invoice Number AR875 for $15,015 (including GST $1,365) in respect to the design of a TV campaign. In QB select â€˜Invoicesâ€™. Use Training Exercise transaction no. 4 as example.
22. July 30 Paid the monthly telephone and internet expense with cheque number 98 for $858 (including GST $78). In QB select â€˜Write Chequeâ€™. Make cheque out to â€˜Telephone and Internet Coyâ€™, click Tab, Quick Add, Other.
23. July 30 Received and paid invoice number 1543 from Maxi Power for utilities expense for July with cheque number 99. The invoice totals $286 (including GST $26). In QB select â€˜Write Chequeâ€™. Make the Cheque out to Maxi Power, click Tab, Quick Add, Other. Use NCG as Tax code.
24. July 31 Paid the monthly repayment relating to the ANZ bank loan of $744 with cheque number 100. (This cheque must be SPLIT between the interest expense of $336 and principal repayment of the current liability of the loan of $408) (Use 2 lines in the Cash Payments Journal). In QB select â€˜Write Chequeâ€™. Make the Cheque out to ANZ Bank, click Tab, Quick Add, Other. Remember, you will have to split the cheque between Interest Expense and Loan Payable â€“ Current Liability.
25. July 31 Record a general journal entry for $2,996 for the total PAYG tax withheld on the monthly wages. (Debit wages expense and credit PAYG Tax Payable). In QuickBooks click on Accountant (top toolbar) and select â€˜Make General Journal Entriesâ€™. Ensure that the box for â€˜Adjusting Entryâ€™ is NOT checked. Prepare the entry using the first three columns (i.e. Account, Debit, and Credit). Use the Training Exercise adjusting entry as an example but ensure that the Adjusting entry box is NOT checked.
Prior to journalising the adjusting entries, we should check our work to date by reviewing a Trial Balance. Click on Reports (on the top toolbar), Accountant, Trial Balance, and select the to/From dates as 1/7/2013 and 31/7/2013, and click Refresh. If you have completed the entries correctly, then your trial balance will be identical to the trial balance on your Excel worksheet, with one exception. QuickBooks has debited/credited the GST that it automatically calculated to Tax Payable instead of GST Clearing. If we add the balances of the two accounts together they equal $4532 which is the correct amount.
Now pass journal entries for the adjustments. Refer to the example in the Training exercise. Remember to check the box for â€˜Adjusting Entryâ€™ and to date all the entries 31/7/2013.
A ) Unearned Revenue
As at 31 July, Kelda has performed $18,750 of services for the new client that paid her in advance with a cash deposit, as noted in the transactions above on July 1. (GST has already been recorded).
B ) Insurance
Kelda prepaid 12 months of insurance as noted in the transactions above on July 1.
C ) Rent
Kelda prepaid 3 months of rent on June 30. (Refer Prepaid Rent general ledger account).
D ) Depreciation â€“ Office Equipment
Depreciation on Office Equipment is calculated using the Straight Line Method over 5 years with $0 estimated residual value. Round calculation to the nearest dollar.
Note that the calculation is for 1 month only (i.e. July depreciation).
E ) Depreciation â€“ Computer Equipment
Depreciation on Computer Equipment is calculated using the Straight Line Method over 4 years with $2,040 estimated residual value relating to the Opening Computer Equipment. As noted in the business transactions above, Kelda also purchased a computer on July 1, which had a residual value of $0. Round calculation to the nearest dollar.
Note that the calculation is for 1 month only (i.e. July depreciation).
F) Superannuation Payable
Superannuation contributions to be accrued for July total $2,031.
G) Accrued Wages
Wages owing as at 31 July are $5,105.
H) Office Supplies Expense
On 31 July, Kelda performed a stocktake of her office supplies and noted that there was $1,420 of supplies remaining.
You will have to Open an account for â€˜Office Supplies Expenseâ€™. Using the â€˜Make General Journal Entriesâ€™ dialogue box type â€˜Office Supplies Expenseâ€™ in the â€˜Accountâ€™ section and hit Tab. Click Set-up, click Expense, Continue and Save and Close.
Now check your Adjusted Trial Balance â€“ Go to â€˜Reportsâ€™, Accountant, Adjusted Trial Balance. It is not necessary to close the accounts.
Print the following reports for the period ending/as at 30 July 2013 to submit with your practice set:
â€¢ Adjusted Trial Balance
â€¢ Profit and Loss Statement
â€¢ Balance Sheet
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