fbpx

Get Cheapest Assignment in Australia, UK, US, UAE, Canada and NZ Order Now

B1068 PAULA’S PORTRAITS STUDENT EXERCISE

0 Comments

Overview

In this case study, you, the student will set up a new company file using the Express Start instead of the Detailed Start. You will use the Preferences Section to make Changes and will add the needed Accounts to the Chart of accounts. You will add Items, Customers and Vendors to the appropriate lists using Quick add.

Accounting Information

Paula Pollack has been working as a photographer for a large firm. After several requests from friends and contacts to take pictures privately, she has decided to go into business on her own and has registered the name Paula’s Portraits. March will be the first month of her fiscal year and January will be the first month of her Calendar/Tax year.

Looking at her local market and her experience, Paula has identified Children’s and School photography as her areas to specialize in. Paula will offer two packages to students:

  • Basic Portrait Package – 25.00 plus GST
  • Supersaver Portrait Package – 40.00 plus GST

These packages are sold to families in advance. The schools distribute the portrait flyer and collect cash and cheques prior to Picture Day. This ensures that Paula receives her payment before the photo sitting sessions.

She has rented a studio at 123 Parsons Place, Port Peter, Ontario N7L 4T4 and has taken

$30,000 of her savings and deposited it in an account for the business at the venture Bank, Port Peter on March 1. (Use a Journal Entry to Debit $30,000 to Chequing, Venture Bank and Credit $30,000 to P Pollack, Capital.) Paula registered for GST to be reported quarterly, and Tax rate is GST 5%, and HST 13%

Problem Statement

You have been hired to set up Paula’s Portraits as a Quickbooks company file and process the business’s activity for March 1 to March 12.

Required

  1. Open a new company file. Use the Express Start option to begin entering the company information as provided above. (Enter the Company Name as Paula’s Portraits – Your Name.)
  2. Choose Art, writing or photography as the Industry.
  3. Enter Contact Information as provided above.
  4. Using the preferences section make the appropriate changes to the following screens:
    1. GST/HST- Remember, Paula is register for GST/HST. She will generally pay HST Taxes on purchases and will charge GST only on Services provided to customers.
    1. Jobs and estimates – Paula will not use Jobs or Estimates.
    1. Sales and Customers – Paula will not use Sales Orders.
    1. Time Tracking – Paula will not use Time Tracking.
    1. Accounting – Turn off the Warn if transactions are in the past as well as the Warn if transactions are in the future
  5. Add the following accounts to the chart of Accounts
    1. Chequing, Venture Bank Type- Bank
    1. P Pollack, Capital             Type- Equity
    1. P Pollack, Withdrawals    Type-Equity
    1. Photographic equipment Type Fixed Asset
    1. Photographic Supplies    Type-Expense(Sub Account – Office supplies)
    1. Vehicle Expense              Type-Expense
    1. Vehicle Insurance            Type-Expense ( Sub Account- Insurance Expense)
    1. Equipment Insurance      Type-Expense (Sub Account – Insurance Expense)
  6. Edit the following accounts:
    1. Change ‘Photo and Video services Income’ to ‘Portrait Fee Income’
  7. Add the following service items to the Customers Items List:
    1. Basic Portrait Package- $25.00 Plus GST
    1. Supersaver Portrait Package- $40.00 Plus GST
  8. Process the transactions for the period of March 1 to March 12 as found on the following page. Note: Add customers and Vendors, as needed using Quick Add while completing transactions.
  • The following transactions take place in March:

Day                                              Description                                                            Source

1 .Paula Pollack’s initial investment (found on page 1)

2. Purchased cameras and photographic equipment for cash from Kodak $10,000 (Plus HST).

Chq 1345

Paula took portraits of 25 kindergarten children at Little Steps

3. Primary School; 15 purchased the Basic Portrait Package and 10 purchased the Supersaver Portrait Package. Paula received payment in full. Sales Receipt 1

  • Create Deposit

Paid rent on studio to Judy-Joe Real Estate for one month

$1250 (plus GST) Chq

  • Bought photographic materials from photographic Suppliers

$2300 (Plus HST)

Paid Kwik Print for Advertising Brochures to be printed $4,200

(Plus HST)

Chq1347

Paula took school photos at Port Peter Primary School; 75

  • students purchase the Basic Portrait Package and 15 purchased the Supersaver Portrait Package. Paula received

payment in full.

Make deposit

Bought photographic equipment on credit from Eastman Ltd

$5,000 (Plus HST) Terms Net 30

Sales receipt 2

  • Paid for Gas $70 (Plus HST) at the Esso station                                   Chq 1349
  • Paid Registration and Insurance on Motor Vehicle to Vic Roads $420 (plus HST)

Chq 1350

Paid for six months insurance on equipment $300 to Norfolk

Union Insurance. Expense one month’s insurance and set up other five months in Prepaid Insurance.

12        Paula drew $500 cash for her own use                                                  Chq 1352

10. Print the following statements as of March 12:

Profit and Loss Standard

Balance sheet Standard

All Journal entries

Check Figures:

11. Checking Account Balance: $12,101.30

b. Net Loss: $5,040.00

c. Balance Sheet Balance: $ 27,351.30