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Homework answers / question archive / Overview In this case-study, you, the student, will set up a new service company file using the Easy Step Interview found by clicking on Detailed Start after clicking to create a new company

Overview In this case-study, you, the student, will set up a new service company file using the Easy Step Interview found by clicking on Detailed Start after clicking to create a new company


Overview In this case-study, you, the student, will set up a new service company file using the Easy Step Interview found by clicking on Detailed Start after clicking to create a new company. As you navigate through the Easy Step Interview, you will decide the best answers to the interview based on the information presented here. You will also have the opportunity to practice setting up a Chart of Accounts, and completing Journal entries, sales, Bills, and Cheques. As an extended activity, you may be required to complete the Bank Reconciliation. Accounting Information Bob Brown has decided to start a business of his own, doing backhoe work for clients beginning January 1. He will run the business from his home at 123 Any Street, Chatham, Ontario N7M 1A1. He has obtained his Business Number and registered for Goods and Services tax. Tax rates are GST 5%, and HST 13% § Bob will use the calendar year as his fiscal year. § His first HST quarterly report period will end March 31. § Bob will only do business in Southwest Ontario. § This is a Service Based Business with no inventory. To assist with setting up the Chart of Accounts, choose ‘General Service-Based Business’ as the industry in the Easy Step Interview process. § Set up a Service Item called Back Hoe Fees, Description Back Hoe Services, Default Tax will be HST Only. § Bob Expects to invoice some Customers and collect Payment later. § Bob will sometimes buy products and services on credit and pay his vendors later. § Attached is a Chart of Accounts Bob has been given to use with his business. BOB’S BACK HOES STUDENT EXERCISE QuickBooks 2019 - Assignment 2 Page 2 of 5 Chart of Accounts: Account Type Description 10500 Chequing Account Bank Chequing Account 11000 Prepaid Insurance Other current asset Prepaid Insurance 12000 Accounts Receivable Accounts Receivable Accounts Receivable 13000 Home Office Equipment Fixed Asset Home office Equipment 13010 Computer Equipment additions Fixed Asset Computer equipment additions 13020 Computer Equipment Depreciation Fixed Asset Computer equipment Depreciation 13510 Office Equipment Additions Fixed Asset Office Equipment Additions 13520 Office Equipment Depreciation Fixed Asset Office Equipment Depreciation 14990 Undeposited Funds Other Current assets Undeposited funds 15000 Equipment Fixed Asset Equipment 15010 Equipment additions Fixed Asset Equipment Additions 15020 Equipment depreciation Fixed Asset Equipment Depreciation 20000 Accounts Payable Accounts Payable Accounts Payable 25500 GST/HST Payable Other Current Liability HST Payable 30000 Opening Bal Equity Equity Opening bal Equity 32000 Bob Brown Capital Equity Bob Brown capital 30800 Bob Brown Withdrawals Equity Bob Brown Withdrawals 39000 Retained Earnings Equity Retained Earnings 40100 Back Hoe fees earned Income Fees 60400 Depreciation expense Expense Depreciation Expense 61000 Advertising Expense Expense Advertising Expense 62000 Back Hoe Equipment Rental Expense Back Hoe Equipment Rental 62500 Back Hoe Gas & Oil Expense Back Hoe Gas & Oil 63000 Bank fees Expense Bank fees 64000 Insurance Expense Insurance 64250 Liability Insurance Expense Liability Insurance 65000 Home Office Expense Expense Home Office Expense 65250 Office Supplies Expense Office supplies 65500 Utilities Expense Expense Utilities Expense 65750 Telephone Expense Expense Telephone Expense 66200 Professional fees Expense Professional fees 66500 Accounting Expense Accounting Fees 67000 Repairs Expense Repairs 68200 Taxes Expense Taxes 68300 Federal Expense Federal taxes 68400 Provincial Expense Provincial QuickBooks 2019 - Assignment 2 Page 3 of 5 Transactions: On 3 January, Bob deposits $25,000 in a separate Bank Account for the Business at CIBC, downtown branch. (Create journal Entry # 1 to Debit Chequing Account and Credit B Brown, Capital) Bob has decided to lease the backhoe. The monthly payment of $2,000 (plus HST) is made on the 15th day of each month to Brian’s Leasing. The Following Transactions took place in January: Date Transaction Source 3 Purchased a computer by cheque from Impact Computers $4,600 (plus HST) Chq 1 4 Bob Contributed a ladder to the Business Valued at $400 Fair Market value Journal Entry #2 6 Completed cash Job for Maple City construction, issued receipt for $2500 (plus HST). Receive Payment in full and deposited cash in bank. Sales Receipt 101 7 Bob paid expenses for the business: Telephone $198.45 (plus HST $20.00) to Telus. Overwrite calculated HST Chq 2 Electricity $430 (plus HST) to Origin Power Chq 3 Advertising $2,000 (plus HST) to leader Papers Chq 4 8 Completed Job for JP Construction, 158 Keil Drive, Chatham, Ontario N7L1A1 (519) 555-1234. Invoiced $2000 (Plus HST), Terms Net 30. Invoice 201 11 Completed cash job for Big Brothers Construction, issued receipt for 4,400.00 (plus HST). Received payment in full and deposited cash in bank. Sales receipt 102 Bob purchased office furniture on credit Inv B333 $700 (plus HST) from Bizquip. Terms Net 30 Bill 12 Bob paid expenses for the business: Fuel $214(plus HST) to Echo fuels Chq 5 Insurance $600 to CUG Insurance for 12 Months liability Insurance. Expense January Insurance and set up Prepaid Insurance for Balance. Chq 6 Bob drew $800 cash for his own use. Chq 7 15 Paid Brian’s Leasing for the lease of the backhoe. Chq 8 QuickBooks 2019 - Assignment 2 Page 4 of 5 Problem Statement Step 1: You have been hired to set up a Service Company File for Bob and set up the chart of Accounts as provided by the Consulting Accountant. Step 2: You have been directed to complete the transactions for the first two weeks of January. Step 3: You receive the bank statement and process the Reconciliation. NOTE – Only complete the steps as assigned by your instructor. Required Items for Each Step Step 1 § Create the file Bob’s Back Hoes – Your Name”. This will help distinguish your report from the other students’ assignments. § Add, Edit, Delete or Make Inactive Accounts to match the Chart of Accounts Step 2 § Process the transactions for January (including the initial capital contribution). § Print (or create a pdf) the following reports for the period January 1-16: · Chart of Accounts · Income Statement · Balance Sheet · Journals Step 3 § Complete Bank Reconciliation using the Bank Statement dated January 16 found on the next page § Print (or create a pdf) the following report for the Period January 1-16: · Bank Reconciliation Detailed QuickBooks 2019 - Assignment 2 Page 5 of 5 Bank Statement Using the bank statement below, prepare the bank reconciliation at January 16 CIBC Downtown Account Name Bob’s Back Hoes Account No 333067 Statement for January 1-16 Date Debit Credit Balance January 2 Cash/Chqs 25,000.00 25,000.00 CR 4 0001 5,198.00 19,802.00 CR 6 Cash/Chqs 2,825.00 22,627.00 CR 8 0003 485.90 22,141.10 CR 11 Cash/Chqs 4,972.00 27,113.10 CR 0002 218.45 26,894.65 CR 0007 800.00 26,094.65 CR 13 Bank fee 20.00 26,074.65 CR 0006 600.00 25,474.65 CR Check figures: · Net Income: $3,987.55 · Book Value of Chequing Account after bank reconciliation: $20,712.83

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