Project 1: Small Business Accounting using QuickBooks Online

User Generated

Aznuzbhqv

Business Finance

Description

Hello,

I already started my attached project to step 10, but they are some mistakes that I made which I can not fix it. In addition, I need help for rest of the steps. I need somebody who is expert in Online Quick Book. I will be appreciate for your help.

Thanks

Nicky


Unformatted Attachment Preview

I. Project 1: Small Business Accounting using QuickBooks Online II. Introduction: Your good friend Kyra recently opened an art studio, Kyra’s Krafts, LLC. She has been creating and selling art work for years, and subsequently already has a good customer base. In January of this year she started the process of setting up an LLC, filing for an EIN in February. She found and rented a studio March 1st and has been cleaning, painting, and setting up the space ever since. Her grand opening was April 1st. She knows you are going to school for your master’s degree in accounting and has asked for your help setting up and using QuickBooks Online (QBO). You agree to help her set up her QBO business account, complete her first month of transactions, and then teach her how to do it. You are not very familiar with QBO, but you know that it be beneficial to you in your accounting career to learn the program, since it is the most used accounting platform for small business in the United States, so you agree. She has heard about and is interested in using the following features: - Sales Receipts/Invoices - Purchase Orders/Inventory tracking - Bills and Bill Pay Details of this project can be found below. III. Steps to Completion: For most of the steps below, you will have the option of viewing a short video or referring to the Intuit Education PPT, all page references given below. Step 1 – Set up your QBO account. Go to http://www.intuiteducation.com/ and follow the instructions for student registration for QuickBooks online. 1 Step 2 - Download Intuit Education PPT • Skim over the first part of the PPT to learn about navigating QBO (the dashboard) (Pages 17- 23). Step 3 – Set up the account and settings • “How to Navigate in QuickBooks” https://www.youtube.com/watch?v=vNdZmf_nLZs • Account and Setting, Intuit Education PPT, Pages 27 – 44. NOTE: the important information is how to get to account and settings which can be found on page 28. Appendix A covers all the settings that you will need to adjust for Kyra’s Krafts. The purpose of the project is not to learn all the ins and outs of QBO but for you to get comfortable with the program. However, if you want to read all the details, feel free. It is just not required for the purposes of this project. • See Appendix A. Step 4 – Set up and edit chart of accounts (COA) • “How to Edit your Chart of Accounts in QuickBooks” https://www.youtube.com/watch?v=xp-rcPZtUc0 • Chart of Accounts, Intuit Education PPT, Pages 51 – 56, 59 (subaccounts) • See Appendix B. Step 5 – Set up sales tax • “How to Set Up Sales Tax: Settings, Sales & More” https://www.youtube.com/watch?v=CiIfTi0tSk0 • Sales Tax Center, Intuit Education PPT, Pages 60 – 61. • See Appendix C. Step 6 – Set up product items and contributed inventory – • “Add Product Information” https://quickbooks.intuit.com/tutorials/lessons/add-productsinformation/ • Products and Services, Intuit Education PPT, Pages 62 – 69 • See Appendix D. Step 7 – Journal entry all other (non-inventory) owner contributions 2 • “Journal Entries in QuickBooks Online” https://www.youtube.com/watch?v=Ud0de5gGJL8 • See Appendix E Step 8 - Add customers and vendors • “How to Add Customers and Vendors into QuickBooks” https://www.youtube.com/watch?v=MJK63XmrJ1E • Customer Center and Vendor Center, Intuit Education PPT, Pages 95 – 99 (customers), Pages 121 - 124 (vendors) • See Appendix F Step 9 – Add invoices*, purchase orders (POs) and bills. • “How to Create A Purchase Order” https://www.youtube.com/watch?v=lGGUSmFPJok - (NOTE: you should create the bill directly from the PO. If you notice in the video where he is showing the PO summary screen, to the right of PO there is a button called “Create bill”. You should use that button to create the bill to the vendor. • “How to Enter Bills, Track Expenses, & Record What You Owe” https://www.youtube.com/watch?v=PGbS7GpdNTo • Create Invoices and Create Bills, Intuit Education PPT, Page 103 (create invoices), Page 127 (creating bills) - NOTE: Do not spend time on fancy invoice. Just go with the basics, unless you want to play with this feature. • See Appendix G Step 10 – Enter all transactions for the month of April • “Create Sales Receipts in QuickBooks” https://quickbooks.intuit.com/tutorials/lessons/sales-receipts/ • Create Sales Receipt, Intuit Education PPT, page 102 • “Receive Payments in QuickBooks” https://quickbooks.intuit.com/tutorials/lessons/receivecustomer-payments/ • Receive Payments, Intuit Education PPT, pages 104, 106 NOTE: make sure you are receiving the payment to Kyra’s Bank account, not undeposited funds • “How to Record & Print Checks” https://www.youtube.com/watch?v=eNSPai2twcM 3 • • • Create Check, Intuit Education PPT, page 126 (& debit charges) –NOTE: Be sure to change the check number to Debit or EFT or something else. QBO will accept duplicate words so pick one and stick with it for consistency. However, make sure that checks are numbered correctly. “How to Record Bill Payments” https://www.youtube.com/watch?v=zan6MC0zSYY Create Check, Intuit Education PPT, page 128 – NOTE: Make sure you document the check number used to pay the bill. Step 11 – Reconcile April Bank Statement – • “Reconcile your accounts” https://quickbooks.intuit.com/tutorials/lessons/reconcileaccounts/ • Intuit Education PPT, pages 142 – 144. • Appendix I Step 12 – Review and Revise Financial Statements • “Understanding Profit & Loss Statement: Income, Cost of Goods” https://www.youtube.com/watch?v=nSGeKUO4HHE • “How to Customize Reports: Basics, Sorting & Date Ranges https://www.youtube.com/watch?v=Hy5MQAPDa-U • Intuit Education PPT, page 77 – 84. • Appendix J Step 13 – Print Reports • P&L and Balance Sheet for the current month. Make sure the report basis is Accrual. • Print the General Ledger for “all time” • Intuit Education PPT, pages 77 – 84 Step 14 – Performance Excel Analysis • Using Excel, perform a: ▪ Vertical analysis for the Income Statement and Balance Sheet, and 4 ▪ Financial ratio analysis using a minimum of 10 financial ratios Step 15 – Create a Manual Journal • Using Excel create a manual journal including all the transactions. Step 16 – Create a Bank to Book Reconciliation • In other Excel worksheet, create a bank to book reconcilation. Step 17 – Write Report • Prepare a 2-page summary of the company’s financial status based on the financial statements, vertical analysis, and specific ratios you chose to compute. IV. List of Deliverables: 1. 2. 3. 4. Balance Sheet, accrual basis ending April 30, 20XX Profit & Loss, accrual basis for April 20XX General Ledger Report for all time Using Excel, perform a vertical analysis for the accrual basis Income Statement and accrual basis Balance Sheet, and financial ratio analysis using a minimum of 10 financial rations and 5. In Excel, prepare a manual journal for all the transactions in April. 6. In Excel, perform a bank to book reconciliation. 7. Prepare a 2-page summary of the company’s financial status based on the financial statements, vertical analysis and specific ratios you chose. V. Helpful Hints: • • • • Appendix A: QBO – Account and Settings Appendix B: Chart of Account Changes Appendix C: Overview of Sales Tax Appendix D: Overview of Inventory 5 • • • • • • • • • • • • Appendix E: Owner Contributions Appendix F: Customers and Vendors Appendix G: Invoices, POs, and Bills Appendix H: April Transactions Appendix I: Bank Statement Appendix J: Financial Statement Review (JEs) Review and refresh your memory of APA style formatting. Prepare a draft version of your report and ask a classmate, friend, or family member to read your report before submitting it to the Graduate Writing Center. Submit your draft to the Graduate Writing Center at least 1 week before this project is due. This FREE resource can be accessed in your LEO classroom. Make edits to your report after reviewing feedback from the writing center tutors. Submit the Project deliverables on or before the due date. Ask your supervisor (professor) questions as needed. VI. Rubric: QBO Rubric Criteria Income Statem ent Exceeds Performance Expectations 22.5 points All accounts and amounts were accurate. Meets Performance Expectations 20 points Most accounts and amounts were accurate. Does Not Meet Performance Expectations 0 points Most accounts and amounts were NOT accurate. Or did not submit. 6 Balance Sheet General Journal Financi al Analysi s Overall Score All accounts and amounts were accurate. Most accounts and amounts were accurate. Most accounts and amounts were NOT accurate. Or did not submit. All general journal entries were accurate. Most general journal entries were accurate. Most general journal entries were not accurate. Or did NOT submit. Vertical analysis of Income Statement and Balance Sheet were accurate. Financia l ratios were accurate. Summar y of financial status was accurate and written at the graduate level. Vertical analysis of Income Statement and Balance Sheet were mostly accurate. Financi al Ratios were mostly accurate. Summary of financial status was mostly accurate and written at the graduate level. Vertical analysis of Income Statement and Balance Sheet were mostly inaccurate. Financial Ratios were mostly inaccurate. Summary of financial status was mostly in accurate and not written at the graduate level. Or did not submit. Exceeds Performance Expectations 90 or more Meets Performance Expectations 80 or more Does Not Meet Performance Expectations 0 or more 7 Appendix A: QBO – Account and Settings Remember - “QuickBooks is a very forgiving program. Most mistakes can be fixed as you have the ability to go back and make historical changes, however a correct setup will prevent the need in most cases.” (Intuit Education PPT). The following are the important pieces of information you need to set up Kyra’s Krafts, LLC in QBO. Each of the Bolded items are Categories in the Account and Settings page. COMPANY: • Owner Name: Kyra Forester • Email: use your email address • Telephone: use your phone number • Company Name: Kyra’s Krafts, LLC • EIN: - LEAVE BLANK. EIN not received yet • Company Type: Limited Liability Company (Form 1065) • Address: 94-1278 Front Beach Road, Suite 12 Panama City Beach, FL 32413 SALES: • • • • • • Kyra’s terms are Net 15 unless otherwise stated She does offer shipping, which she charges for She does offer occasional discounts She does commission work and takes 50% upfront deposits for all commission work. She tracks quantity and price/rate. She also tracks inventory quantity on hand for her art prints. EXPENSES: • She wants use purchase orders, so make sure you check the box. All other default settings are fine. PAYMENTS: • This setting is used to allow clients to pay an invoice through their system, right on the invoice. Although Kyra is possibly interested in the future, she has no current interest. 8 ADVANCED: • She is a calendar year tax payer. She received her LLC paperwork but hasn’t received her EIN yet. (First month of fiscal year stays January). • Tax form: 1065 • She does not want to use account numbers and she will not be using track classes nor track locations. back 9 Appendix B: Chart of Account Changes Add: Name: Kyra's Bank Refundable Deposits Art Displays Consignments Payable Art Sales Original Artwork Sales Print Sales Commission Income Consignment Income Discounts Given Print Expense Art Supplies Expense Gain on Sale of PP&E Loss on Sale of PP&E Group Art Classes Edits: Change from: Owner's Pay & Personal Expenses Opening Balance Equity Rent & Lease Office Supplies & Software Delete: Job Supplies Account Type Bank Other Current Assets Fixed Assets Other Current Liabilities Income Detail Type Checking Income Income Sale of Product Income Sale of Product Income Income Service/Fee Income Income Service/Fee Income Income Cost of Goods Sold Discounts/Refunds Given Supplies & Materials – COGS Expenses Other Income Supplies & Materials Other Miscellaneous Income Other Miscellaneous Income Income Service/Fee Income Equity Owner's Equity Equity Expense Opening Balance Equity Rent or Lease of Building Office/General Administrative Expense Other Income Subaccount of: Other Current Assets Furniture & Fixtures Other Current Liabilities Sale of Product Income Art Sales Art Sales Change to: Owner Distributions Add "DO NOT USE" Rent Office Expense Expense back 10 Appendix C: Overview of Sales Tax NOTE: Sales Tax must be set up in the “TAXES” area in QBO. Proceed with this section carefully. QBO is very user friendly for the most part; however, there are areas that are hard to fix should you set it up incorrectly and Sales Tax is one of those areas so do not rush here. Read all the way through this appendix, watch the how to videos and then proceed with caution. Kyra’s new art studio is located in Panama City Beach Florida. Because of the location, she is required to pay 7% sales tax to the State and 1% to the City of Panama City Beach. The State of Florida requires most tax payers to file monthly sales tax returns, Kyra falls into this category. April 1st she must start collecting taxes and her first return is due no later than May 20th (QBO knows when it is due) for the reporting period of April 1 – April 30. Kyra needs to make sure she charges customers and remit sales tax for everything she sells except her group art classes. Those are not taxed because they are for services only. Address: 94-1278 Front Beach Road, Suite 12 Panama City Beach, FL 32413 Go to the “TAXES” area and set up sales tax for the state of Florida and the city of Panama City Beach. If you entered the business address when you were setting up the account, QBO should suggest both of the above agencies. If not, it should ask you for an address here. Make sure you select both taxing bodies from the dropdown list. You will have to select them individually, just make sure you go back and select the 2nd one as well. Again, make sure you find the taxing bodies in the dropdown list to select. Do NOT manually add any taxing body. QBO already has all the information it needs to correctly tax products and it will automatically update taxes should laws change but only if it is set up correctly from the beginning. back 11 Appendix D: Overview of Inventory The set up of Inventory will be done in the “SALES” area of QBO. Once in SALES, got to the Products and Services tab. • • • • • • The “initial quantity on hand” will be the owner contributed inventory. As of date will be 4/1/2018. Do not put any quantity in the “Reorder Point” field for any items. The Inventory asset account is “Inventory asset” She does not use product codes aka SKU numbers. She does want you to put the Sales price in for each item for all items that have a fixed sales price associated with it. • She also wants you to put in the costs price for the prints. • Remember, all but the Group Art Project, is taxable so make sure you click the “Is taxable” box. NOTE: Just click the “Is taxable” box. Do not put anything in to the “Sales tax category” nor “What you sell”. These should stay blank. Amy primarily sells 3 types of original artwork and prints - large, medium, and small. Pricing and Cost of Original Artwork: Pricing: She uses the standard linear model to price her original artwork at $20 per linear inch. Calculations: Size Large artwork 24″ x 36″ Medium Artwork 11” x 14” Small artwork 5” x 7“ Calculation (24 + 36) x 20 (11 + 14) x 20 Sales Price $1200.00 $500.00 Quantity 5 12 (5 + 7) x 20 $240.00 32 All of the artwork in the table above should set the product Income account to: Art Sales:Original Artwork Sales 12 Cost: She was instructed years ago by her tax accountant that her original artwork inventory should not have a COGS associated with it. Instead she needs to expense all of her art supply purchases. However, if she buys a painting or has prints in her inventory, the cost of those items should be considered COGS. So although her original artwork inventory will have zero cost associated with it, you will be able to enter the sales price of the inventory she transfers in to the business. Cost and Pricing of Prints: She transfers all her print inventory (reproductions of original artwork) to the business April 1st, as follows: Size QTY Cost Sales Price Large Prints 24″ x 10 $40 each $200 each 36″ Medium Prints 11” 50 $20 each $100 each x 14” Small Prints 5” x 7“ 110 $5 each $25 each All of the artwork in the table above should have the following setting: 1. Income account to: Art Sales:Print Sales 2. Expense account to: Cost of Goods Sold In addition to original artwork and prints, Kyra has several non-inventory items that you will need to add. Service item: Group Art Classes* NonInventory Item: Sales Price $30 each Income Account Group Art Classes Art Sales:Original Artwork Sales Commission Work Consignment Artwork** Unusual Sales: PP&E*** Consignment Income Gain on sale of PP&E 13 For all commission work, Kyra requires 50% deposit due at time of order and the remainder due at time of pickup. * Remember, this is the only non-taxable item. ** She also displays and sells consignment pieces. She gets 20% commission on each piece sold. The consignee sets the price, so Kyra keeps those records on an excel spreadsheet and won’t put them in QBO until she sales the pieces. In other words, the consignment inventory is not an inventory item but you need to set up a product item to handle the transaction when you do. However, make note of all consignment sales because in order to complete the sales transaction, you will need to make a JE to move 80% of the sale from the P&L to the balance sheet as Consignments Payable. *** Sales of PP&E will also require a JE to remove the item from the balance sheet and reduce the gain (or increase the loss) on the sale. The transaction is not complete until this JE is made. back 14 Appendix E: Owner Contributions To enter all owner contributions you will need to create one or multiple JEs, your choice. You will need to select the correct expense account to debit for the list below and the credit entry will be to: Owner’s Investments. Remember all of the items below were paid by Kyra from her personal accounts. Also remember to put the description of each item in the JEs. Owner deposit to open bank account-use Kyra’s Bank *Electric Deposit (refundable)-use Refundable deposits *Phone Company Deposit (nonrefundable)use Utilities *Rental Deposit (Refundable)- use Refundable deposits *1st month rent - March (prior to opening)use Rent expense *Gallery set up supplies - paint for walls, cleaning supplies, lumber for building shelves/racks- use Office expense *Miscellaneous art supplies for classes-use Art Supplies expense 4 large Art displays (fair market value at time of contribution- $400 each)-use Art Displays $ 5,000.00 $ 500.00 $ 150.00 $ 1,250.00 $ 1,000.00 $ 350.00 $ 852.75 $ 1,600.00 back 15 Appendix F: Customers and Vendors Enter all customers in the “SALES” area and all Vendors in the “EXPENSES” area. Customers Name Sherry Thomas Lifetime Learning Joy McMasterson Kevin Smith Debbie Reynolds Customers Phone Number 850-4741111 Email Sherry.Thomas@lookout.co m Address 1173 Front Beach Road; Panama City, FL 32412 850-4741111 admin@lifetimelearning.com 850-7475200 joyous@mail.com 905-8722152 ksmith@example.com 619-4211478 debbier112@getgoing.com She uses this to capture sales to non-recurring customers and Daily Sales Receipts Vendors Ace Real Estate Stacy is manager Salem Prints 850-3935555 850-9810000 leasemanager@acerealestat e.com Dish Network Mike Bossie 850-4247900 mike.bossie@dish.net USA Art Supply 858-5858500 jennifer.lopez@usaartsupply .com 3630 Bay Avenue, Panama City, FL 32542 Orders@salemprints.com 78-541 Wildcat Drive, Dade City, FL 33624 2554 Underwood Avenue, San Jose, CA 95413 Consignment Vendors: JoAnne Lopez original artwork 904-5467300 Michael Koltes 850-7782211 415 Orange Avenue, Tampa, FL 33616 857 Rose Lane, Panama City, FL 32551 back 16 Appendix G: Invoices, POs, and Bills INVOICES – Purchases from Customer Date 1-Apr Customer Lifetime Learning Terms Net 15 2-Apr Product Discount* Purchased 10% Art Classes Commission Work QTY Subtotal 10 $270 Kevin Smith Due on receipt 1 $5,000 Lifetime 30-Apr Learning Net 15 10% Art Classes 45 $1,215 *Lifetime Learning is the only customer that receives a discount because they buy individual art classes in bulk. PURCHASE ORDERS – Orders to Vendor Purchases: Salem Prints order 4/1/20XX Each Price Description QTY Totals 24 x 36 large prints 5 $40 $200 11 x 14 medium prints 10 $20 $200 5 x 7 small prints 20 $5 $100 Total Order (Price includes shipping and tax) $500 NOTE: Make sure you create the bill for the Purchase Order from the Purchase Order. It is very easy. Just make sure the dates are correct, see table below. BILLS – Payable to Vendors Received Due 1-Apr 1-Apr 1-Apr 16-Apr 4-Apr 19-Apr 24-Apr 30-Apr To Ace Real Estate Dish Network Salem Prints For April Rent Telephone and internet bill Print order 4/1 Purchased large glass art 9-May USA Art Supply display 30-Apr Ace Real Estate May Rent *Make sure you create the bill from the P.O. Amount $1000 $150.09 $500 * $3524.33 $1000 back 17 Appendix H: April Transactions Make sure you pay all bills through the EXPENSES area and receive all invoice payments in the SALES area. Make sure you pay the sales tax through the TAXES area. If your sales taxes due for the period of April is different than the transaction amount below, there is a problem with your sales tax somewhere along the way. All receipts that were not invoice payments will require a Sales Receipt. You will create Sales Receipts in the SALES area. All sales can be considered cash. Just make sure the dates are correct and the account the money is deposited to is Kyra’s bank. Unless Kyra does recurring business with a customer, or it is a special sale, all Sales receipt transactions will be from customer “Customers" Write checks for all expenses that are not bill payments. However, if there is no check number associated with the transaction, it is a debit card transaction so change the check number to sometimes like EFT, DEBIT or something like that. Just be consistent. Small purchases, under $500, are usually expensed. Make sure you select the appropriate account for each transaction. You should not have to add any more accounts as you enter these transactions. Think macro instead of micro. For example, paying for a PO Box or making small furniture purchases should be considered an Office Expense. QBO is sometimes limited in what you can do in a single transaction. This is where JEs will be necessary. Make note of the transactions where JEs will be necessary (hint: sale of fixed assets, sale of consignment artwork). I suggest you make the JEs as you go to complete the transactions; however, you can also take care of all adjusting journal entries after the bank reconciliation during the financial statement review. Date Description Owner deposit to open bank account (this was already done in Appendix E as long as your debit 1-Apr entry was to Kyra’s Bank) Expenses Deposits 5,000.00 18 1-Apr Paid April rent (bill) check #1001 (1,000.00) 1-Apr Sold medium print Coffee and fingers foods for grand opening – 1-Apr Kroger DEBIT (221.54) 2-Apr Sold medium original artwork Deposit to complete a commissioned piece Kevin Smith (Paid ½ of Invoice. Receive partial 2-Apr payment) Sold 4 large, 2 medium and 9 small prints at art 4-Apr fair 5-Apr USA Art supplies (art supplies) DEBIT (187.21) 5-Apr Paid phone bill received 4/1 check# 1002 (150.09) 12-Apr Sold 4 small art prints Paid for Post Office box through 4/11/20XX (1 12-Apr year) DEBIT (80.00) Sold a consignment piece for Lopez $1000 to J. 13-Apr McMasterson Received payment from Lifetime Learning for 14-Apr invoiced amount 14-Apr Paid Lopez for consignment sale check # 1003 (800.00) 14-Apr Sold large original artwork Goodwill - Purchased shelving to store art 15-Apr supplies DEBIT (put to office supplies) (285.24) 19-Apr Took out cash for personal use DEBIT (2,000.00) Paid bill for prints to Salem Prints 4/4 bill check # 19-Apr 1004 (500.00) Commission piece completed and picked up for Kevin Smith – (Receive the remaining invoice 21-Apr amount) 24-Apr Sold 1 large, 5 medium and 10 small prints 25-Apr Sold 1 large art displays 30-Apr Bank Fees (12.50) Paid Sales Tax to Fl Dept of Revenue Online30-Apr DEBIT (Pay through TAXES area) (775.25) Paid Sales Tax to Panama City Dept of Rev. 30-Apr Online – DEBIT (Pay through TAXES area) (110.75) 30-Apr Paid rent May rent check # 1005 (1,000.00) 30-Apr Paid Bill for art display on 04/25 check #1006 (3,524.33) Subtotals: $(9,646.91) Total: 108.00 540.00 2,700.00 1,323.00 108.00 1,080.00 270.00 1,296.00 2,700.00 1,026.00 1,080.00 $17,231.00 $7,584.09 back 19 Appendix I: Bank Statement Business Checking Statement: Kyra's Krafts, LLC Account number: April 1, 20XX to April 30, 20XX 0001247588 Account summary Beginning Balance on March 31, 20XX Deposits and other additions Withdrawals and other subtractions Checks Service fees $0.00 17,231.00 (2,773.99) (2,450.09) (12.50) Ending Balance on April 30, 20XX $11,994.42 Deposits and other additions Date 1-Apr 1-Apr 2-Apr 2-Apr 4-Apr 12-Apr 13-Apr 14-Apr 14-Apr 21-Apr 24-Apr 25-Apr Description Counter Deposit Counter Deposit Counter Deposit Counter Deposit Counter Deposit Counter Deposit Counter Deposit Counter Deposit Counter Deposit Counter Deposit Counter Deposit Counter Deposit Total deposits and other additions Amount 5000 108.00 540.00 2,700.00 1,323.00 108.00 1,080.00 270.00 1,296.00 2,700.00 1,026.00 1,080.00 $17,231.00 Withdrawals and other subtractions 1-Apr Kroger 5-Apr USA Art Supplies United States Post 12-Apr Office 15-Apr Goodwill Counter 19-Apr Withdrawal Total withdrawals and other subtractions (221.54) (187.21) (80.00) (285.24) (2,000.00) ($2,773.99) Checks 1-Apr #1001 (1,000.00) 20 5-Apr #1002 14-Apr #1003 19-Apr #1004 Total checks Total # of checks (150.09) (800.00) (500.00) ($2,450.09) 4 back 21 Appendix J: Financial Statement Review (JEs) Review Accounts: Balance Sheet ACCRUAL BASIS Report period: ALL DATES Bank Statement A/R Inventory Asset Refundable Deposits Fixed Assets Total Assets All Payables Owner Distributions Net Income Opening Balance Equity Check Figures Book to Bank Reconciliation Required $1,215.00 $1,975.00 $1,750.00 $4,724.33 $16,248.42 $0.00 - $2,000 $5,595.67 $0.00 Note, make sure the basis for the financial statement is accrual. Other than the accounts listed above, make sure you scan and make sure all balances make sense. For example, the only negative numbers in the financials should be the Owner Distributions and Discounts given. You may notice a balance in the Opening Balance Equity account (QBO “junk” account). QBO made this entry against the owner contributed inventory when you created the product inventory. If there is a balance, you will need to create a J/E to move the balance from Opening Balance Equity to Owner Contribution. (Debit: Opening Balance Equity DO NOT USE to Credit: Owner Investment) If you have not already done so, you will also need to create a J/E to account for the consignment sale/consignment due. You already paid the vendor so Consignment Due should also be zero. However, if it is a negative number then you need a J/E (Debit: Consignment Sales Income to Credit: Consignments Payable.) If your fixed asset account is incorrect, another J/E will be required is to remove the art display PP&E that was sold from the books because it hasn’t been done yet. (Debit: Gain on Sale of PPE and Credit: Art Displays.) back 22
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

This question has not been answered.

Create a free account to get help with this and any other question!

Similar Content

Related Tags