Quickbooks Workbooks Template

Newton Financial Planning Business Scenario – Description of Company – Newton Financial Planning 1

Newton Financial Planni ng Business Scenario

Description of Company – Newton Financial Planning

After many years with his company, Chance Newton was caught by the entrepreneurial spirit. After carefully saving up enough seed capital and convincing a recently unemployed colleague to join him, he developed a well thought-out business plan and started Newton Financial Planning (HFP). Chance saw great opportunities. He lives in a large metropolitan city in Texas, close to several regional colleges and large universities, as well as hundreds of medium to large corporations. He plans to offer financial planning, investment and estate planning seminars, plus related consulting services to individual, corporate and institutional clients. Furthermore, his business plan includes the purchase and promotion of planning kits, along with several popular books and instructional DVDs related to achieving financial stability and success, which he will sell at corporate and collegiate brown-bag lunch seminars. Several times a year he conducts large seminars on financial planning and building wealth. He also offers companion seminars on estate planning and minimizing taxes. To control his new start-up, he selected QuickBooks software to help manage the business operations while fulfilling fiduciary responsibilities from an accounting, tax and record-keeping perspective. To launch the company, he has hired a full time employee, Liz Bellingham, and a part-time employee, June Flannery. He has leased 1,200 square feet of downtown office space. Using QuickBooks and the sample file (Newton.QBW), you will record initial start-up costs, complete one month of business transactions, including purchases, sales, deposits, accounts receivable, accounts payable, payroll and taxes as well as track inventory and reconcile a bank account. In the end, you will answer several questions about the finances for Newton Financial Planning.

Company Set Up

Restore this File

This chapter uses Newton.QBW. To open this file, restore the Newton.QBM file to your hard disk.

The company file for this exercise is mostly set up for you, including Accounts, Customers, Vendors, Employees, Payroll, Classes, Items and Fixed Asset Items.

Newton Financial Planning Business Scenario – Description of Company – Newton Financial Planning 2 Newton Financial Planning Business Scenario – Business Transactions Instructions

1. Restore the Newton-12.QBM file to Newton-12.QBW file. 2. Enter the transactions for May 2012 beginning on page Error: Reference source not found. 3. Reconcile the bank statement for May for the statement shown on page 11. 4. Prepare the following reports and graphs: 4.a) Standard Balance Sheet as of 5/31/2012 4.b) Standard Profit and Loss for May 2012 4.c) Profit and Loss by Class for May 2012 4.d) Statement of Cash Flows for May 2012 4.e) Sales by Item Summary for May 2012 4.f) Graph – Sales by Month by Customer for May 2012 4.g) Inventory Valuation Summary as of 05/31/12 5. Back up your data file to NewtonComplete_yourname.QBM. 6. Complete the analysis questions on page 10.

Business Transactions

May 2012

Newton Financial Planning Business Scenario – Business Transactions Newton Financial Planning Business Scenario – Description of Company – Newton Financial Planning 3

May Business Transaction Transaction Details 1 Deposit owner investment from Chance Transaction type: Deposit Newton to provide cash for operations. Deposit to: Checking-Texas National Bank Date: 5/1/2012 Memo: Deposit Owner’s Investment From Account: Investments (Equity Account) Check #401 Class: Admin/Other Amount: $40,000.00 1 Issued Purchase Order to Texas Media Transaction type: Purchase Order and Publications to order Books and Vendor: Texas Media & Publications DVDs. Class: Product Sales Date: 5/1/2012 PO#: 2012–51 Items: Books (50 @ $25.00) DVDs (50 @ $12.00) Memo: Order Books and DVDs Total purchase order is $4,000.00 1 Paid rent plus refundable deposit to Braten Transaction type: Check Investments. Pay to the Order of: Braten Investments Check#: 501 Date: 5/1/12 Memo: May Rent plus $1,500 Deposit Expense: Rent - $1,500.00 Expense: Refundable Deposits (Other Current Asset) - $1200.00 Total Check: $3,000.00 Class: Admin/Other 1 Issued Purchase Order to Office Supply Transaction type: Purchase Order Depot for office equipment. Vendor: Office Supply Depot Class: Admin/Other Date: 5/1/2012 PO#: 2012–52 Items: Laptop PC $2,500.00, Copier $1,50.00, Fax Machine $750.00, Projector $2,500.00

Memo: Purchase office equipment Total purchase order is $6,850.00 Note: The items are already added to the Fixed Asset Item list. 1 Issued Purchase Order to Lone Star Office Transaction type: Purchase Order Supply for office supplies. Vendor: Lone Star Office Supply Class: Admin/Other Date: 5/1/2012 PO#: 2012–53 Item: Office Supplies ($360.00) Memo: Purchase office supplies Total purchase order is $360.00

Newton Financial Planning Business Scenario – Description of Company – Newton Financial Planning 4 Newton Financial Planning Business Scenario – Business Transactions

May Business Transaction Transaction Details 4 Received bill from Office Supply Depot. Transaction type: Receive Items & Enter Bill

Vendor: Office Supply Depot PO #: 2012-52  Items and Class auto fill from PO. Date: 5/4/2012 Bill Due: 6/3/2012 Amount: $6,850.00 Terms: Net 30 Ref No: 68-20 Memo: Office Equipment 4 Received bill from Lone Star Office Transaction type: Receive Items & Enter Bill Supply for supply items. Vendor: Lone Star Office Supply PO #: 2012-53  Items and Class auto fill from PO. Date: 5/4/2012 Bill Due: 6/3/2012 Amount: $360.00 Terms: Net 30 Ref No: 6433 Memo: Office Supplies 4 Issued check to Office Furniture Rentals, Transaction type: Check Inc. for rental of office furniture for May. Pay to the Order of: Office Furniture Rentals, Inc. Check#: 502 Date: 5/4/2012 Memo: Furniture Rental Expense: Equipment Rental ($882.00) Class: Admin/Other Memorize the check, using Don’t Remind me option. 4 Received bill from Texas Media and Transaction type: Receive Items & Enter Bill Publications. Vendor: Texas Media & Publications PO #: 2012-51  Items and Class auto fill from PO. Date: 5/4/2012 Bill Due: 6/3/2012 Amount: $4,000.00 Terms: Net 30 Ref No: 8736 Memo: Books and DVDs 4 Enter a Weekly timesheet for June Transaction type: Weekly timesheet Flannery’ hours. Name: June Flannery Week of: May 1 to 5, 2012 Payroll Item: Regular Wages

May Business Transaction Transaction Details WC Code: Leave Blank Mon: 8 hours Tues: 4 hours Wed: 8 hours Thurs: 4 hours Fri, Sat, Sun: 0 hours Billable?: Not Billable 8 Received bill from Texas Media & Transaction type: Bill Publications. Vendor: Texas Media and Publications These non- inventory products were Date: 5/14/2012 ordered by telephone without issuing a PO. Bill Due: 6/13/2012 Amount: $1,250.00 Terms: Net 30 Ref No: 850 Memo: Planning Kits Item: Planning Kits – 50 Units @ $25 Class: Product Sales 11 Enter a Weekly timesheet for June Transaction type: Weekly timesheet Flannery’ hours. Name: June Flannery Week of: May 7 to 12, 2012 Payroll Item: Regular Wages Mon: 8 hours Tues: 4 hours Wed: 8 hours Thurs: 4 hours Fri, Sat, Sun: 0 hours Billable?: Not Billable 15 Pay employees for payroll period Pay Period Ends: 5/15/12 5/01/2012 – 5/15/2012. Paycheck Date: 5/15/2012 Bank Account: Checking – Texas National Bank June Flannery: 48 hours Liz Bellingham: Salary Starting Check Number: 503 19 Received bill from Image Contacts, Inc. Transaction type: Bill for printing and mailing of flyers. Vendor: Image Contacts, Inc. Date: 5/19/2012 Bill Due: 6/18/2012 Amount: $1,770.00 Terms: Net 30 Ref No: 8869 Memo: Printing and Mailing Flyers Expense: Advertising and Promotion Class: Consulting/Seminars 21 Received bill from Rash Productions for Transaction type: Bill consulting fees for an upcoming seminar to Vendor: Rash Productions be conducted.

May Business Transaction Transaction Details Date: 5/21/2012 Bill Due: 6/20/2012 Amount: $800.00 Terms: Net 30 Ref No: 8248 Memo: Consulting Fees Expense: Professional Fees Class: Consulting/Seminars 21 Enter a Weekly timesheet for June Transaction type: Weekly timesheet Flannery’ hours. Name: June Flannery Week of: May 13 to 19, 2012 Payroll Item: Regular Wages Mon: 8 hours Tues: 4 hours Wed: 8 hours Thurs: 4 hours Fri, Sat, Sun: 0 hours Billable?: Not Billable 24 Conducted an on-site brown-bag lunch Transaction type: Sales Receipt seminar at Computer Manufacturers USA. Customer: Seminar Sales Summary Class: Product Sales Date: 5/24/2012 Sale No: 2012-51 Check No.: Leave Blank Payment Method: Check Items: Books (22 @ $50.00) DVDs (16 @ $40.00) Planning Kits (14 @ $50.00) Texas sales tax applies. Total: $3,399.05 Memo: Computer Manufacturers USA Seminar Sales 24 Prepare Invoice to Computer Transaction type: Invoice Manufacturers USA for on-site seminar Customer: Computer Manufacturers USA conducted on this date. Class: Consulting/Seminars Template: Newton Invoice Date: 5/24/2012 Invoice #: 2012-51 Terms: Due on Receipt Items: Seminar (1 @ $5,000.00) Total: $5,000.00 Memo: Computer Manufacturers USA Onsite Seminar 25 Received check from Computer Transaction type: Payment Manufacturers. Customer: Computer Manufacturers USA Date: 5/25/2012 Amount: $5,000.00

May Business Transaction Transaction Details Check No: 569 Payment Method: Check Memo: Payment Received – Inv. #2012-51 Apply to: Invoice #2012-51 27 Issued check to Education & Medical Fund Transaction type: Check for contributions. Check#: 505 Date: 5/26/2012 Pay to the Order of: Education & Medical Fund

Amount: $500.00 Memo: Charitable Contribution Expense: Charitable Contributions Class: Consulting/Seminars 28 Enter a Sales Receipt to record the product Transaction type: Sales Receipt sales at the seminar given at Energy Customer: Seminar Sales Summary Corporation of Texas Class: Product Sales Date: 5/28/2012 Sale No: 2012-52 Check No.: Leave Blank Payment Method: Check Items: Books (42 @ $50.00) DVDs (36 @ $40.00) Planning Kits (27 @ $50.00) Texas sales tax applies. Total: $6,754.80 Memo: Energy Corp. of Texas Seminar Sales 28 Prepare Invoice for Energy Corporation of Transaction type: Invoice Texas for on-site seminar conducted on Customer: Energy Corporation of Texas this date. Class: Consulting/Seminars

Date: 5/28/2012 Invoice #: 206-52 Terms: Due on Receipt Items: Seminar (1 @ $5,000.00) Total: $5,000.00 Memo: Energy Corp of Texas Onsite Seminar 28 Received bill from Texas Light & Power. Transaction type: Bill Vendor: Texas Light & Power Date: 5/28/2012 Bill Due: 6/27/2012 Amount: $214.00 Terms: Net 30 Ref No: 925586 Memo: Utility Bill Expense: Utilities Class: Admin/Other 28 Received bill from South Texas Bell for Transaction type: Bill telephone. Vendor: South Texas Bell

May Business Transaction Transaction Details Date: 5/28/2012 Bill Due: 6/27/2012 Amount: $129.00 Terms: Net 30 Ref No: 987543 Memo: Telephone Bill Expense: Telephone Expense:Office Phone

Class: Admin/Other 29 Enter a Weekly timesheet for June Transaction type: Weekly timesheet Flannery’ hours. Name: June Flannery Week of: May 20 to May 26, 2012 Payroll Item: Regular Wages Mon: 8 hours Tues: 4 hours Wed: 8 hours Thurs: 4 hours Fri, Sat, Sun: 0 hours Billable?: Not Billable 30 Received check from Energy Corporation Transaction type: Payment of Texas. Customer: Energy Corporation of Texas Date: 5/30/2012 Amount: $5,000.00 Check No: 2021 Payment Method: Check Memo: Payment Received – Inv #2012-52 Apply to: Invoice #2012-52 31 Pay employees for time worked during Pay Period Ends: 5/31/12 payroll period 5/16/2012 through Paycheck Date: 5/31/12 5/31/2012. Bank Account: Checking – Texas National Bank June Flannery: 48 hours Liz Bellingham: Salary Starting Check Number: 506 31 Deposit funds held in Undeposited Funds Transaction type: Deposit account to Texas State Bank. Deposit to: Checking-Texas National Bank Memo: Deposit Date: 5/31/2012 Total Deposit Amount: 20,123.85 31 Pay all bills in a batch sorted by Vendor. Select Pay Bills, and then pay the following bills: Pay from the Checking-Texas National Bank account, and create “To be Printed” Image Contacts, Inc., for $1,770.00 checks. Lone Star Office Supply for $360.00 Office Supply Depot for $6,850.00 Rash Productions, Inc. for $800.00 South Texas Bell for $129.00 Texas Light & Power for $214.00 Texas Media & Publications for $4,000.00

May Business Transaction Transaction Details Texas Media & Publications for $1,250.00 Total payments: $12,373.00 Bill Payment Date: 5/31/2012 31 Print all checks #508 – Image Contacts, Inc. (Chk#508-514). #509 – Lone Star Office Supply #55 – Office Supply Depot #56 – Rash Productions, Inc. #512 – South Texas Bell #513 – Texas Light & Power #514 – Texas Media & Publications 31 Issued check to Clover Computing for Transaction type: Check computer repairs. Pay to the Order of: Clover Computing Check#: 512 Date: 5/31/2012 Memo: Computer Repairs Expense: Computer & Internet Expenses Class: Admin/Other Total: $500.00

Analysis Questions

Use the completed reports and template file to answer the following questions. Write your answer in the space to the left of each question. 1. ______What is the net income or net loss for May? 2. ______What is the total Cost of Goods Sold for May? 3. ______What is the total amount of payroll expenses (gross wages and payroll taxes) for May? 4. ______What is the gross profit for May? 5. ______What is the total Product Revenue for May? 6. ______What is the amount of rent paid for May? 7. ______What is the total fixed asset cost? 8. ______What is the Total Income for the Consulting/Seminars Class for May? 9. ______What is the Total Liabilities on May 31? 10. ______What is the net cash increase for May? 11. ______What percentage of May total sales was the Seminar Item? 12. ______What percentage of May total sales was sold to Energy Corporation of Texas in May? 13. ______How much does Newton Financial Planning have in total assets on May 31? 14. ______How many books does Newton Financial Planning have on hand as of May 31?

Business Checking Account

Statement Date: May 31, 2012 Page 1 of 1

Summary: Horizon Financial Planning

Previous Balance as of 4/30/12 $ - Total Deposits and Credits: 2 + $ 60,153.85 Total Checks and Debits: 15 - $ 19,755.00 Total Interest Earned + $ - Total Service Charge:1 - $ 10.00 Statement Balance as of 10/31/15: = $ 40,388.85

Deposits and Other Credits:

DEPOSITS INTEREST Date Description Amount Date Description Amount 1-May Customer Deposit $ 40,000.00 31-May Customer Deposit $ 20,153.85 Interest: $ - 2 Deposits: $ 60,153.85 Checks and Other Withdrawals:

CHECKS PAID: OTHER WITHDRAWALS/PAYMENTS Check No.Date Paid Amount Date Description Amount 1001 1-May $ 3,000.00 1002 4-May $ 882.00 1005 28-May $ 500.00 0 Other Withdrawals/Payments: $ - 1008 31-May $ 1,770.00 1009 31-May $ 360.00 1010 31-May $ 6,850.00 1011 31-May $ 800.00 1012 31-May $ 129.00 SERVICE CHARGES 1013 31-May $ 214.00 Date Description Amount 1014 31-May $ 5,250.00 31-May Service Charge $ 10.00 15 Checks Paid: $ 19,755.00 1 Service Charge: $ 10.00

Figure 12-1 May Bank Statement

Note: Paychecks are calculated using the tax tables loaded on your computer. In this scenario, we have intentionally not included the paychecks and the payroll liability payments in these bank statements to make the reconciliation consistent for readers using different tax tables.

Newton Financial Planning Business Scenario – Description of Company – Newton Financial Planning