Higher Ground Café & Roastery v.2019

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Higher Ground Café & Roastery v

Accounting

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Higher Ground Café

& Roastery

v.2019

OBJECTIVES

Final Project

In this project, you will be entering transactions for Higher Grounds Café & Roastery. The company file has already been set up; please follow your instructor’s direction on how to find and open the company data file.

COMPANY INFORMATION

igher Grounds Café & Roastery is an independent coffee house dedicated to providing fresh Certified Fair Trade, organic and premium coffee products. Located in Windsor, Ontario it is owned and managed by Barry Beane. At Higher Grounds, all of their products are organic, grown without any synthetic fertilizers, herbicides or pesticides. Healthier soil and waters offered to growing produce, in turn means healthier consumers.

The downtown café and roastery located on the riverfront and is decorated in a comfortable lounge style, displaying the art of local artists, provides free Wi-Fi and also supports the local music scene with weekly Open Mic nights.

Higher Grounds Café & Roastery, essentially a coffee house provides baked goods and lights lunches organic and fair trade teas and cocoa and other beverages including local wines and beers are also available. Catering service is also available, offering dessert and sandwich trays as well as thermos service for local businesses. Barry Beane manages the day to day activities of the café and has an assistant manager along with trained baristas. He has accounts set up with regular vendors, as well utility service companies and government agencies to which Higher Grounds makes remittances. Some of his vendors offer discounts for early payment.

The majority of customers are one-time customers who pay by cash or credit card, some repeat customers have accounts and are entitled to a 2 percent discount if they pay within five days; net payment is due within 10 days.

Higher Grounds does not pay HST on its food and beverage purchases, but purchases of other merchandise is subject to HST. HST at 13 percent is charged on food and merchandise that is sold.

CHART OF ACCOUNTS

ASSETS

Current Assets

1020 Undeposited Cash and Cheques

1030 Bank: Chequing

1040 Bank: Credit Cards

1200 Accounts Receivable

1220 Packaging Supplies

1240 Office Supplies

1260 Prepaid Insurance

Inventory Assets

1310 Coffee and Tea

1320 Beverage

1340 Food

1360 Merchandise

Fixed Assets

1410 Computer Equipment

1415 Acc. Dep: Computer Equipment

1420 Net Computer Equipment

1430 Café Equipment

1440 Acc. Dep: Café Equipment

1450 Net Café Equipment

1460 Furniture and Fixtures

1470 Acc. Dep: Furniture and Fixtures

1480 Net Furniture and Fixtures

1500 Vehicle

1510 Acc. Dep: Vehicle

1520 Net Vehicle

1530 Café Premises

1540 Acc. Dep: Café Premises

1550 Net Café Premises

LIABILITIES

Current Liabilities

2100 Bank Loan

2200 Accounts Payable

2220 Credit Card Payable

2300 Salaries & Wages Payable

2310 Vacation Payable

2320 EI Payable

2330 CPP Payable

2340 Income Tax Payable

2400 RRSP Payable

2420 Group Insurance Payable

2460 WSIB Payable

2650 HST Charged on Sales

2670 HST Paid on Purchases

2750 HST Owing (Refund)

Long-Term Liabilities

2920 Mortgage Payable

EQUITY

3100 R. Beane, Capital

3150 R. Beane, Drawings

3600 Net Income

REVENUE

4020 Sales revenue

4030 Sales Returns & Allowances

4050 Sales Discounts

4100 Sales Tax Compensation

4150 Interest Revenue

EXPENSES

Operating Expenses

5020 Advertising

5030 Bank Charges

5040 Credit Card Fees

5045 Reconciliation Adjustments

5050 Purchase Discounts

5060 Cost of Goods Sold

5080 Item Assembly Costs

5100 Inventory Losses

5120 Utilities Expense

5140 Telephone Expense

5160 Licenses and Permits

5180 Depreciation Expense

5210 Insurance Expense

5220 Interest Expense

5240 Cleaning and Maintenance

5250 Vehicle Expense

5260 Packaging Supplies Used

5280 Office Supplies Used

5290 Property Taxes

EXPENSES

Payroll Expenses

5300 Salaries & Wages Expense

5310 EI Expense

5320 CPP Expense

5330 WSIB Expense

5400 Group Insurance Expense

POST CLOSE TRIAL BALANCE

February 1,

Debits Credits

1030 Bank: Chequing 15,482

1040 Bank: Credit Cards 5,325

1200 Accounts Receivable 639

1220 Packaging Supplies 500

1240 Office Supplies 200

1260 Prepaid Insurance 2,200

1300 Coffee and Tea 5,955

1320 Beverage 3,500

1340 Food 500

1360 Merchandise 967

1400 Computer Equipment 5,000

1410 Acc. Dep: Computer Equipment 1,200

1430 Café Equipment 20,000

1440 Acc. Dep: Café Equipment 3,500

1530 Café Premises 200,000

1540 Acc. Dep: Café Premises 40,000

1500 Vehicle 50,000

1510 Acc. Dep: Vehicle 10,000

1460 Furniture and Fixtures 25,000

1470 Acc. Dep: Furniture and Fixtures 5,000

2100 Bank Loan 15,000

2200 Accounts Payable 3,731

2220 Credit Card Payable 181

2300 Salaries & Wages Payable

2310 Vacation Payable

2320 EI Payable

2330 CPP Payable

2340 Income Tax Payable

2400 RRSP Payable

2420 Group Insurance Payable

2460 WSIB Payable

2650 HST Charged on Sales 4,845

2670 HST Paid on Purchases 345

2920 Mortgage Payable 180,000

3100 R. Beane, Capital ________ 72,156

$ 335,613 $ 335,613

VENDOR INFORMATION

Vendor Name

Address

Outstanding Balance

Bell Canada

P.O. Box 9000

Don Mills, ON M5N 3S2

Ambassador Cleaning Services

1535 Bridge Drive

Windsor, ON N9S 1G8

Coffee Cooperative

1755 Arabica Way

Toronto, ON M8N 7J1

$1,695

Essex Food Supplies

650 Baker Rd

Windsor, ON N8B 1K1

$ 800

Ministry of Finance

613 Queens Blvd

Ottawa, ON K3S 3H5

ON Gas

P.O. Box 8500

Chatham, ON N3A 5L9

ON Hydro

P.O. Box 3500

Windsor, ON N9S 4G8

Ontario Food Equipment

93 Cassoulet Ave

Mississauga, ON L7K 1S1

Orient Express Tea Co.

2350 Oceanside Drive

Vancouver, BC V5K 2A3

$ 510

Receiver General for Canada

River City Gift Co.

320 Bestbuy Dr

Windsor, ON N8A 1B2

$ 726

Sunrise Distributors

475 Kings Road

Erie Shores, ON N7N 3P2

WSIB

P.O. Box 2099

Windsor, ON N9A 7B7

Grand Total

$ 3,731

CUSTOMER INFORMATION

Customer Name

Address

Outstanding Balance

Cash Customers

Lockhart, Gardner & Bond

63 Park Avenue

Windsor, ON N5J 2M2

$ 294

MainStream Marketing

725 Main Street

Windsor, ON N5K 4J9

$ 345

River City Credit Union

33 Riverview East

Windsor, ON N6K 3A1

Grand Total

$ 639

EMPLOYEE INFORMATION

Employee

SIN

Position

Salary/Wage Rate

Pay Period(hrs)

Mario Macchiato

403 599 401

Asst. Manager

$4,000

Monthly(160)

Joe Cappa

588 374 127

Head Barista

$20.00/hr

Semi-monthly(80)

Bloom Moka

513 191 282

Barista/Server

$18.00/hr

Semi-monthly(80)

Coco Lait

277 639 119

Server

$16.00/hr

Semi-monthly(40)

Vienna Frappe

813 402 302

Barista/Server

$18.00/hr

Semi-monthly(80)

In lieu of a salary Barry Beane draws $5,000 per month.

Employee Benefits and Entitlements

All full time employees are entitled to 10 days per year as sick leave. When employees take their vacation salaried employees receive their regular salary and hourly workers receive the retained vacation pay

Higher Grounds pays 50 percent of the medical premiums for an extended health care insurance plan. This is taxable income for the employee.

All employees are single and claim the basic federal and provincial amounts for income tax purposes. All salaried and fulltime staff pay into the extended health care plan at the single rate and also make RRSP contributions.

Mario Macchiato, the Assistant manager receives his salary at the end of the month and is entitled to 3 weeks of vacation per year. For the other employees who are paid an hourly rate vacation pay is calculated and retained at 4 percent.

INVENTORY INFORMATION

Code

Description

Min Stock

Selling Price

Unit

Qty on Hand

Total

(Cost)

Coffee and Tea Inventory

CF01

Rainforest Blend 1lb

$ 12

Each

$ 150

CF02

Rainforest Blend 5lb

Each

563

CF03

Guatemalan 1lb

Each

188

CF04

Guatemalan 5lb

Each

625

CF05

Kenyan 1lb

Each

225

CF06

Kenyan 5lb

Each

750

CF07

Blue Mountain 1lb

Each

250

CF08

Blue Mountain 5lb

Each

813

CF09

Sumatra 1lb

Each

213

CF10

Sumatra 5lb

Each

688

TE01

Herbal Blends 4oz

Each

TE02

Herbal Blends 1lb

Each

250

TE03

Green 4oz

Each

100

TE04

Green 1lb

Each

225

TE05

Black 4oz

Each

113

TE06

Black 1lb

Each

313

TE07

Chai 4oz

Each

TE08

Chai 1lb

Each

188

CO01

Cocoa Powder 1lb

Each

125

Merchandise Inventory

MC01

Higher Grounds Coffee Mugs

$ 9

Each

$ 113

MC02

Ceramic Travel Mug

Each

150

MC03

French Coffee Press 4 cup

Each

100

MC04

French Coffee Press 8 cup

Each

125

MC05

Coffee Grinder

Each

163

MT01

Glass Teapots

Each

263

MT02

Ceramic Cups 8oz

Each

Accounting Procedures

Harmonized Sales Tax (HST)

Higher Grounds uses the regular method for calculating and remitting the HST. All items

sold have HST added to them. At the end of each quarter, the HST liability to the Receiver General is reduced by any HST paid to suppliers on purchases. Beverage and food supplies are zero rated. The HST Owing (Refund) account shows the amount of HST that is to be remitted to the Receiver General.

Sales

All customers pay by cash, cheque or credit card. The majority of customers are one time customers who pay by cash or credit card. Higher Grounds allows repeat catering customers to pay on account.

Cash and credit card sales are presented as weekly summaries to avoid a large number of small revenue transactions.

Credit Card Sales and Purchases

Higher Grounds has accounts set up for credit card sales and purchase transactions

Receipts and Bank Deposits

All cash and cheques received are held for weekly deposits in the temporary bank account Undeposited Cash and Cheques OR will be deposited straight into bank chequing account. Pay careful attention to the instructions.

Discounts

Higher Grounds takes advantage of discounts for early payment, offered by suppliers, by paying before the discount period ends.

Higher Grounds also encourage their customers to pay early by offering a 2 percent discount on before tax amounts if they pay their accounts within five days.

Gift Packages

Higher Grounds offers an assortment of promotional gift packages that include teas and coffees and accessories. When assembled, these packages require some special packaging material such as baskets, boxes, cellophanes and ribbons which incur additional costs.

INSTRUCTIONS

Enter the source documents for February in Simply Accounting, using the Chart of Accounts, Trial Balance, Supplier, Customer, Employee and Inventory Information provided.

Export as a PDF and e-mail the following reports to your instructor

All Journal Entries: Feb 1- 28, 2019

Income Statement from Feb 1-28, 2019

Balance Sheet at Feb 28, 2019

Customer Aged Summary at Feb 28, 2019

Vendor Aged Summary at Feb 28, 2019

Trial Balance Feb 28, 2019

FINAL INSTRUCTION TO STUDENTS

This project is designed test all of the accounting knowledge and skills you have learned in the introductory class, as well as you attention to detail and critical thinking abilities.

There are items here you may correct as you work to make the following parts of the project go faster.

Are each of the customers and vendors set up properly with terms and tax codes?

Are you able to store any entries to reuse later?

Selling prices for certain inventory

SOURCE DOCUMENTS

SESSION DATE – FEBRUARY 7, 2019

SD1: Payment Cheque #701 Dated Feb. 2/19

To Essex Food Supplies, $792 in payment of account, including early payment discount. Reference invoice #EF-613.

SD2: Sales Invoice #581 Dated Feb.2/19

To MainStream Marketing, for catering services.

Large Thermos service $ 45

Asst. Sandwich Trays $ 70

Dessert Trays $ 75

Bottled Mineral Water $ 30

HST 13%

TOTAL $248.60

Terms: 2/5, n/10

SD3: Payment Cheque #702 Dated Feb. 2/19

To Orient Express Tea Co., $504.90 in payment of account, including early payment discount. Reference invoice #OE-3569.

SD4: Cash Receipt #150 Dated Feb 2/19

From Lockhart, Gardner & Bond, cheque # 2378 for $291.06 in payment of account includes discount for early payment. Reference invoice # 578.

Deposit to Undeposited funds.

SD5: Cash Receipt #151 Dated Feb 4/19

From MainStream Marketing, cheque # 94 for $341.55 in payment of account includes discount for early payment. Reference invoice # 580

Deposit to Undeposited funds.

SD6: Purchase Invoice # EF-720 Dated Feb. 5/19

From Essex Food Supplies, $950 for weekly order of pastries, breads, condiments and other foods. Terms 1/10, n/30 (charge to food inventory)

SD7: Credit Card Sales Invoice #582 Dated Feb.6/19

Sales Summary for Café credit card sales (to one-time Customers)

10 CF02 Rainforest Blend 5lb $ 53ea $ 530.00

6 CF06 Kenyan 5lb 60ea 360.00

8 CF08 Blue Mountain 5lb 67ea 536.00

10 TE06 Black 25ea 250.00

12 TE08 Chai 19ea 228.00

4 MT02 Ceramic Cups 7ea 28.00

2 MT01 Glass Teapots 35ea 70.00

Café customers sales and services 2,715.00

HST 13% 613.21

Invoice total paid by credit cards $5,330.21

SD8: Cash Receipt #152 Dated Feb 6/19

From MainStream Marketing, cheque # 110 for $243.63 in payment of account. Reference invoice # 581 including discount

Deposit to Bank chequing

SD9: Credit card sale return #582-R Dated Feb 6/19

Return to Cafe by customers (to one-time customers – returns & allowances)

-2 MT02 ceramic cups 7ea -$14.00

-1 MT01 Glass Teapots 35ea -$35.00

HST 13% -$6.37

Total credited to credit card account -$55.37

SD10: Payment Cheque #703 Dated Feb. 7/19

To River City Gift Co., $718.74 in payment of account, including early payment discount. Reference invoice #RCG-2875

SD11: Sales Invoice #583 Dated Feb.7/19

To MainStream Marketing, for catering services.

Large Thermos service $ 45

Asst. Sandwich Trays $ 70

Dessert Trays $ 75

Bottled Mineral Water $ 30

HST 13%

TOTAL $248.60

Terms: 2/5, n/10

SESSION DATE – FEBRUARY 14, 2019

SD12: Memo #1 Dated Feb 8/19

New inventory items required for Valentine’s Day gift packages. Create new asset Group account 1350 Gift Sets. Create new inventory record.

Number Description Min. Selling Price /unit

GS01 Cocoa Lovers Gift Set 1 $39.50 /pkg

Linked Accounts: Asset 1350

Revenue 4020

Expense 5060

SD13: Item Assembly #ITA-1 Dated Feb 8/19

Assemble 10 GS01 Cocoa Lovers gift sets; transfer component items as follows:

10 CO01 Cocoa Powder 1lb $6.25 ea

20 MC01 Coffee Mugs 5.65ea

Additional Costs $18.00

Assembled Items:

10 GS01 Cocoa Lovers Gift Set 19.35 each set

SD14: Purchase Invoice # AB-1376 Dated Feb 9/19

From Ambassador Cleaning Services, $325 plus HST for weekly cleaning of café premises. Invoice total $367.25 Terms 1/10, n/30

SD15: Cash Purchase Invoice #WL- 4329 Dated Feb 10/19

From Windsor Life Magazine, $1,500 plus HST for 12 quarter page full colour ads, for annual advertising campaign which launches March 2019. Terms: cash on receipt. Invoice total $1,695.00 paid in full with cheque # 704.

Create a new Group account 1280 Prepaid Advertising.

SD16: Purchase Order #103 Dated Feb 10/19

Delivery Date Feb 20/19

From River City Gift Company

24 MT02 Ceramic Cups 8oz $ 106.00

36 MC01 Higher Grounds Coffee Mugs 203.40

48 MC02 Ceramic Travel Mug 360.00

12 MC03 French Coffee Press 4 cup 120.00

10 MC04 French Coffee Press 8 cup 125.00

HST 13% 118.87

Invoice total $1,033.27

. Terms: 1/10, n/30

SD17 Sales Invoice #584 Dated Feb.11/19

To Lockhart, Gardner & Bond, for weekly catering services.

Small Thermos service $35

Morning snack Trays $50

Assorted fruit juices $30

HST 13%

TOTAL $129.95

Terms: 2/5, n/10

SD18: Sales Order #50 Dated Feb 12/19

Ship Date Feb 20/19

To River City Credit Union,

1 MC05 Coffee Grinder $65 ea

1 MC04 French Coffee Press 20 ea

2 CO01 Cocoa 10 ea

1 TE04 Green 18 ea

1 TE06 Black 25 ea

1 TE08 Chai 16 ea

HST 13%

TOTAL $185.32

Terms: 2/5, net 10, deposit of 50% of total before tax required with acceptance of order.

SD19: Purchase Invoice # EF-798 Dated Feb. 12/19

From Essex Food Supplies, $950 for weekly order of pastries, breads, condiments and other foods. Terms 1/10, n/30

SD20: Cash Receipt #153 Dated Feb 12/19

From MainStream Marketing, cheque # 106 for $243.63 in payment of account includes discount for early payment. Reference invoice # 583

Deposit to Bank chequing

SD21: Cash Receipt #154 Dated Feb 13/19

From River City Credit Union, cheque # 838 for $92.66 as deposit #10 to confirm sales order #50.

Deposit to Bank chequing

SD22: Cash Sales Invoice #585 Dated Feb.13/19

Sales Summary for Café cash sales (to one-time Customers)

12 CF03 Guatemalan 1lb $ 15 ea $ 180.00

6 CF05 Kenyan 1lb 18 ea 108.00

5 CF07 Blue Mountain 1lb 20ea 100.00

5 CF09 Sumatra 17ea 85.00

12 TE05 Black 9ea 108.00

6 TE07 Chai 7ea 42.00

4 MC02 Travel Mugs 12ea 48.00

3 MC03 Coffee Press 16ea 48.00

4 GS01 Cocoa Lovers 39.50ea 158.00

Café customers sales and services 2,105.00

HST 13% 387.66

Invoice total paid by cash $3,369.66cf

Deposit to Bank chequing

SD23: Memo #2 Dated Feb 14/19

From B. Beane: Adjust inventory records for glass teapot item MT01 and ceramic cups item MT02, one teapot and two cups were dropped and broken.

SD24: Employee Payroll Dated Feb 14/19

Using the table below, create the pay cheques 705-708 for pay period ending February 14, 2019, using the following information.

Employee

Chq #

Hourly rate

Regular hours

Overtime hours

Sick days

Joe Cappa

705

$20.00/hr

Bloom Moka

706

$18.00/hr

Coco Lait

707

$16.00/hr

Vienna Frappe

708

$18.00/hr

SESSION DATE – FEBRUARY 21, 2019

SD25: Cash Receipt #155 Dated Feb 15/19

From Lockhart, Gardner & Bond, cheque # 2410 for $127.35in payment of account includes discount for early payment. Reference invoice # 584

Deposit to Bank chequing

SD26: Payment Cheque #709 Dated Feb. 15/19

To Essex Food Supplies, $940.50 in payment of account, including early payment discount. Reference invoice #EF-720.

SD27: Cash Purchase Invoice # BC-21813 Dated Feb 18/19

From Bell Canada, $225 plus HST, for monthly telephone and internet services. Invoice total $254.25 paid in full by cheque #710

SD28: Purchase Invoice # CC-3512 Dated Feb. 18/19

From Coffee Cooperatives

20 CF01 Rainforest Blend 1lb $ 150.00

20 CF02 Rainforest Blend 5lb 563.00

20 CF03 Guatemalan 1lb 188.00

20 CF04 Guatemalan 5lb 625.00

20 CF07 Blue Mountain 1lb 250.00

20 CF08 Blue Mountain 5lb 813.00

10 CO01 Cocoa Powder 1lb 62.50

HST @ 13% 344.70

Invoice Total $ 2996.20

Terms: 2/10, n/30

SD29: Payment Cheque #711 Dated Feb. 18/19

To Ambassador Cleaning Services $363.58, in payment of account, includes early payment discount. Reference invoice #AB-1376

SD30: Purchase Invoice # EF-815 Dated Feb. 19/19

From Essex Food Supplies, $950 for weekly order of pastries, breads, condiments and other foods. Terms 1/10, n/30

SD31: Credit Card Sales Invoice #586 Dated Feb.19/19

Sales Summary for Café credit card sales (to one-time Customers)

12 CF02 Rainforest 5lb 53ea $ 636.00

8 CF04 Guatemalan 5lb 50ea 400.00

9 CF08 Blue Mountain 5lb 67ea 603.00

10 TE02 Herbal 20ea 200.00

7 TE04 Green 18ea 126.00

10 TE06 Black 25ea 250.00

7 TE08 Chai 16ea 112.00

Café customers sales and services 2,700.00

HST 13% 653.51

Invoice total paid by credit cards $5680.51

SD32: Purchase Invoice #RCG-3115 Dated Feb 20/19

From River City Gift Company, to fill purchase order#103

24 MT02 Ceramic Cups 8oz $ 106.00

36 MC01 Higher Grounds Coffee Mugs 203.40

48 MC02 Ceramic Travel Mug 360.00

12 MC03 French Coffee Press 4 cup 120.00

10 MC04 French Coffee Press 8 cup 125.00

HST 13% 118.87

Invoice total $1,033.27

Terms: 1/10, n/30

SD33: Purchase return #RCG-3115-R Dated Feb. 21/19

To River city gift company because 4 cups are damaged

-4 MC02 Ceramic Travel mug -$30.00

HST 13% - $3.90

TOTAL CREDIT -$33.90

SD34: Credit Card Purchase Invoice #MPC-5179 Dated Feb.21/19

From Merchant Paper Company $325 plus HST for paper and packaging materials to be used in the cafe. Invoice total $367.25 paid in full by credit card.

SESSION DATE – FEBRUARY 28, 2019

SD35: Credit Card Bill Payment #2-13 Dated Feb. 24/19

From the credit card company; $181.00 for purchases made before Feb. 15 and $35 annual card fee. Issued cheque # 712 for $216.00

SD36: Memo #4 Dated Feb 28/19

Issue cheque to B. Beane, for personal use, $5,000 cheque #713.

SD37: Bank Debit Memo # 10032 Dated Feb. 28/19

From River City Trust Co. pre-authorized withdrawals for mortgage and loan payments.

Mortgage payment $3,200

($2,000 interest and $1200 principal)

Loan payment 1160

($180 interest and $ 980 principal)

SD38: Memo #5 Dated Feb 28/19

From B. Beane: Prepare for month end by completing adjusting entries for prepaid expenses and supplies used.

Prepaid Insurance $350

Office Supplies 68

Paper & Packaging Supplies 275

Prepaid Advertising 300

SD39: Memo #6 Dated Feb 28/19

From B. Beane: Transfer $10,000 from the Credit Card account to the Chequing Bank Account.

SD40: Memo #7 Dated Feb 28/19

From B. Beane: Adjust for the Food and Beverage Inventory used.

Beverage Inventory used $1500

Food Inventory used 2300

SD41: Memo #8 Dated Feb 28/19

From B. Beane: Record Monthly Depreciation amounts

Computers $ 70

Café Equipment 333

Furniture & Fixtures 365

Vehicle 425

Café Premises 2200

Export as a PDF and e-mail the following reports to your instructor

All Journal Entries: Feb 1- 28, 2019

Income Statement from Feb 1-28, 2019

Balance Sheet at Feb 28, 2019

Customer Aged Summary at Feb 28, 2019

Vendor Aged Summary at Feb 28, 2019

Trial Balance Feb 28, 2019

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