Quickbooks 2015 chapter 6 answers

Cha r Review an ssment

5·38 I CHAPTER 5

Procedure Check 1. Your company will be selling a new product. Describe the steps that

must be taken to add the new item to the system. 2. Explain the difference between using Enter Bills or Receive Items and

Enter Bills from the Vendors pull-down menu. 3. Which QuickBooks report(s) would you use to view the sales and pur-

chases of specific inventory items? 4. At year-end, you wish to confirm the quantity on hand for each inven-

tory item. How would you use QuickBooks reports to determine the quantity and value of the ending inventory?

5. Your company wishes to view the profitability of each inventory item. How could you use QuickBooks to develop this information?

6. Discuss the advantages of using a computerized accounting system to maintain a perpetual inventory system.

Case Problems Case Problem 1 On April 1, 2014, Lynn Garcia began her business, called Lynn's Music Studio. In the first month of business, Lynn set up the music studio, pro- vided guitar and piano lessons, and recorded month-end activity. In May, the second month of business, Lynn decides to purchase and sell inventory items of guitars, keyboards, music stands, and sheet music. For customers that purchase merchandise inventory, the terms of payment are 2110, Net 30 Days. For illustration purposes, assume a 7% sales tax is charged on the sale of all inventory items. The company file includes the information for Lynn's Music Studio as of May 1, 2014.

1. Open the company file CH5 Lynn's Music Studio.QBW. 2. Make a backup copy of the company file LMS5 ['YourName] Lynn's

Music Studio. 3. Restore the backup copy of the company file. I~~both the Open Backup

Copy and Save Company File as windows use the file name LMS5 [Your Name] Lynn's Music Studio.

4. Change the Company Name to LMS5 [Your Name] Lynn's Music Studio.

5. Add the following inventory items to the Item List:

Type: Item Name/Number: Description on Purchase/Sales Transactions: Cost: COGS Account: Preferred Vendor: Sales Price: Tax Code: Income Account: Asset Account: Reorder Point:

Inventory Part Keyboards

Keyboards 75 5065 Cost of Keyboards Sold Katie's Keyboards 150 Tax - Taxable Sales 4065 Sale of Keyboards 1265 Inventory of Keyboards 10

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Type: Inventory Part j Item Name/Number: Sheet Music Description on Purchase/Sales Transactions: Cost: COGS Account: Preferred Vendor: Sales Price: Tax Code: Income Account: Asset Account: Reorder Point:

Delete the following inventory item: Harmonicas

Sheet Music 3 5075 Cost of Sheet Music Sold Strings, Sheets & Such 6 Tax - Taxable Sales 4075 Sale of Sheet Music 1275 Inventory of Sheet Music 50

6. Using the appropriate window, record the following transactions for May:

May 3

May 3

May 3

lMay3

May 4

May 4

May 7

May 10

May 11

May 11

Purchased 30 guitars on account from Music Instruments, Inc., at $50 each, their Invoice No. GU75998. Purchased 30 keyboards on account from Katie's Keyboards at $75 each, their Invoice No. 10089-30, Purchased 30 music stands from Melody Music Equipment at $20 each, paid immediately, Check No.9. Do not print check. Purchased 300 sheets of music of various themes from Strings, Sheets & Such at $3 each, paid immediately, Check No. 10. Do not print check. Sold 15 guitars for $100 each, 15 keyboards for $150

. each, and 15 music stands for $40 each to Jefferson High School. Invoice No. 2{)12, terms 2110) Net 30 Days. In

'addition, provided 15 hours of guitar lessons and 10 hours of piano lessons. SoldIf keyboards for $150 each to Highland School, Invoice No. 2013.;terms 2110, Net 30 Days. In addition, provided 12hciiirs of piano lessons. Received full payment frornJefferson High School for Invoice 2009, Check No. 30531. Record the weekly cash sales of sheet music, 75 sheets at $6 each, Sale No. 2014. Leave the Customer.Job field blank. Sold 3 guitars for $100 each, 3 keyboards for $150 each, and 3 music stands for $40 each to Mulligan Residence, Invoice No. 2015, terms 2/10, Net 30 Days. In addition, provided 5 hours of guitar lessons and 7 hours of piano lessons. Received full payment net of discount from Jefferson High School for Invoice No. 2012, Check No, 30711.

, L

"

INVENTORY j 5-39

Ch n d Ass n tter Review May 14 Received full payment net of discount from Highland

School, Check No. 76115. May 17 Purchased 20 keyboards on account from Katie's

Keyboard Company at $75 each, their Invoice No. 10758-20.

May 17 Purchased 10 music stands from Melody Music Equipment at $20 each, paid immediately, Check No. II. Do not print check.

May 17 Record the weekly cash sales of sheet music, 100 sheets at $6 each, Sale No. 2016.

May 21 Sold 5 guitars for $100 each, 5 keyboards for $150 each, and 5 music stands to Twin Lakes Elementary, Invoice No. 2017, terms 2/10, Net 30 Days. In addition, provided 8 hours of guitar lessons and 5 hours of piano lessons.

May 24 Received a payment of $830 from Twin Lakes Elementary for Invoices 2004 and 2011, Check No. 7266.

May 24 Record the weekly cash sales of sheet music, 115 sheets at $6 each, Sale No. 2018.

May 24 Purchased 300 sheets of music of various themes from Strings, Sheets, & Such at $3 each, paid immediately, Check No. 12. Do not print check.

May 25 Received full payment net of discount from Twin Lakes Elementary for Invoice No. 2017, Check No. 7384.

May 25 Paid in full Music Instruments, Inc. (Check No. 13). Do not print check.

May 25 Paid in full Katie's Keyboard Company, Invoice No. 10089-30 (Check No. 14). Do not print check.

May 31 Record the weekly cash sales of sheet music, 145 sheets at $6 each, Invoice No. 2019.

May 31 Upon reviewing the inventory, Lynn discovers that one guitar is damaged, through no fault of the manufacturer, and cannot be sold. Adjust the inventory on hand to remove the one guitar from the inventory. Inv. Adj. I.

May 31 Remit all sales taxes collected to the PA Dept. of Revenue, Check No. 15.

May 31 Deposit all undeposited funds to the Cash - Operating account.

7. Display and print the following reports for May 1,2014, to May 31, 2014: a. Inventory Valuation Detail b. Inventory Stock Status by Item c. Purchases by Item Detail d. Sales by Item Detail e. Journal f. Profit & Loss Standard (April 1, 20 14-May 31, 2014) g. Balance Sheet Standard

5-40 I CHAPTER 5

Case Probgem 2 OnJune 1,2014, Olivia Chen began her business, which she named Olivia's Web Solutions" rn: the first month of business, Olivia set up the office, provided web page design and Internet consulting services, and recorded month-end activity"In July, the second month of business, Olivia decides to purchase and sell inventory items of computer hardware and software. For customers that purchase merchandise inventory, the terms of payment are 2110, Net 30 Days" For illustration purposes, assume an 8% sales tax is charged on the sale of all inventory items. The company file includes the information for Olivia's Web Solutions as of July 1,2014.

1. Open the company file CH5 Olivia's Web Solutions"QBW. 2. Make a backup copy of the company file OWS5 [Your Name] Olivia's

Web Solutions. 3. Restore the backup copy of the company file. In both the Open Backup

Copy and Save Company File as windows use the file name OWSS [Your Name] Olivia's Web Solutions.

4. Change the Company Name to OWS5 [Your Name] Olivia's Web Solutions"

5" Add the following inventory items to the Item List:

Type: Inventory Part Item Name/Number: Scanners Description on Purchase/Sales Transactions: Cost: COGS Account: Prejerred Vendor: Sales P17ce: Tax Code: Income Account: Asset Account: Reorder Point:

Type: Item Name/Number: Description on Purchase/Sales Transactions: Cost: COGS Account:

Preferred Vendor: Sales Price: Tax Code: Income Account: Asset Account:

Reorder Point:

Delete the following inventory item: Printers

Scanners 300 5065 Cost of Scanners Sold Scanntronix 600 Tax - Taxable Sales 4065 Sale of Scanners 1265 Inventory of Scanners 5

Inventory Part Desktop Publishing Software

Desktop Publishing Software 100 5075 Cost of Desktop Pub. Soft. Sold Textpro Software, Inc. 200 Tax - Taxable Sales 4075 Sale of Desktop Pub. Soft. 1275 Inventory of Desktop Pub. Soft. 5

INVENTORY I 5-41

Ch r Rev i nd A sessment

5-42 I CHAPTER 5

6. Using the appropriate window, record the following transactions for July:

Jul. 2

Jul. 2

Jul. 2

Jul. 2

Jul. 5

Jul. 6

Jul. 9

. Jul. 12

Jul. 13

Jul. 16

Jul. 16

Jul. 19

Jul. 20

Jul. 26

Jul. 27

Purchased 10 computers on account from Computec Computers at $1,000 each, their Invoice No. 068788. Purchased 20 scanners on account from Scanntronix at $300 each, their Invoice No. 10089-30. Purchased 10 desktop publishing software packages from Textpro Software, Inc. at $100 each, paid immediately, Check No.9. Do not print check. Purchased 20 HTML software packages from InterSoft Development Co. at $75 each, paid immediately, Check No. 10. Do not print check. Sold 3 computers for $2,000 each, 2 scanners for $600 each, and 1 desktop publishing software package for $200 on account to Long Island Water Works, Invoice No. 1011, terms 2110, Net 30 Days. In addition, provided 10 hours of Internet consulting services. Sold 2 computers on account to Miguel's Restaurant, Invoice No. 1012, terms 2/10, Net 30 Days. In addition, provided 8 hours of Web page design services, Sold 1 scanner for $600 and 1 desktop publishing soft- ware package for $200 to the Singh family, Invoice No. 1013. Received payment immediately, their Check No. 901. Sold 1 computer for $2,000, 2 scanners for $600 each, and 1HTML software package for $150 on account to Breathe Easy, Invoice No. 1014, Net 30 Days. In addi- tion, provided 12 hours ofInternet consulting services. Received full payment net of discount from Long Island Water Works for Invoice No. 1011, Check No. 125671. Purchased 5 computers on account from Computec Computers at $1,000 each, their Invoice No. 072445. Purchased 5 desktop publishing software packages from Textpro Software, Inc. at $100 each, paid immediately, Check No. 11. Do not print check. Sold 1 computer for $2,000 and 1 desktop publish- ing software package for $200 to the Schneider Family, Invoice No. 1015. Received payment immediately, their Check No. 899. Sold 3 computers for $2,000 each, 3 scanners for $600 each, and 2 desktop publishing software packages for $200 each to South Shore School District, Invoice No. 1016, terms 2110, Net 30 Days. In addition, provided 16 hours of Web page design services. Received full payment, no discount, from Miguel's Restaurant, for Invoice No. 1012, Check No. 4110. Received full payment, no discount, from Breathe Easy for Invoices Nos. 1006 (remaining balance) and 1014, Check No. 1874.

Jul. 30

Jul. 30

Jul. 30

Jul. 30

Jul. 31

Jul. 31

Purchased 5 computers on account from Computec Computers at $1,000 each, their Invoice No. 073111. Paid in full Computec Computers Invoice No. 068788 (Check No. 12). Do not print check. Paid in full Scanntronix, Invoice No. 10089-30 (Check No. 13). Do not print check. Upon reviewing the inventory, Olivia discovers one HTML software package was damaged, through no fault of the manufacturer, and cannot be sold. Adjust the inventory on hand to remove the one HTML software package from the inventory. Inv. Adj. 1 Remit all sales taxes collected to New York State, Check No. 14. Deposit all undeposited funds to the Cash - Operating account.

7. Display and print the following reports for July 1, 2014, to July 31, 2014:

a. Inventory Valuation Detail b. Inventory Stock Status by Item c. Purchases by Item Detail d. Sales by Item Detail e. Journal f. Profit & Loss Standard (lune 1, 2014-July 31, 2014) g. Balance Sheet Standard