101|QUICKBOOKS – Craig’s Transactions

BYU Student Author: @Ammon_Thornton, @Kaylee_Bair, @Nathan_Hammond, @Cole_Batten

Reviewers: @Abby_Cheshire, @Kyle_Brown

Estimated Time to Solve: 20 Minutes

We provide the solution to this challenge using:

Quickbooks Online

Need a program? Click here.

If you want an introduction on how to use QuickBooks Online, refer to Challenge 102|QUICKBOOKS – Getting Your Feet Wet to get step-by-step instructions.

Overview

In this challenge, you will have the opportunity to review some of the basic capabilities available in QuickBooks, including managing an account, creating journal entries, making a sale, collecting money, and preparing purchase orders. The final deliverable will be to run a report verifying the accuracy of the new data entries. This challenge is meant for Quickbooks Online users who already have some experience using the system. Users who have completed each module in Intuit’s free curriculum are well-prepared to complete this challenge.

To access Intuit’s free curriculum, click here.

Instructions

Please be aware that this challenge will be done in a Sandbox environment. To go to the Sandbox, click here. If QuickBooks prompts you to log in after clicking the provided link, try pasting the link address into an incognito browser.

In the Sandbox, QuickBooks offers data from a simulated company for your interaction. At the end of each day, all transactions you enter are wiped and the environment resets. It’s essential to note that for this challenge, you’ll be conducting transactions in the year 2022. This is crucial to remember, as not adhering to this timeline may result in discrepancies with the solution due to the preset data in the current year.

STEP 1: Import Data Files

Using the data files provided at the bottom of the instructions, import Craig’s inventory items, vendors, and customers into Quickbooks.

STEP 2: Transactions

Read the descriptions of each transaction and take the appropriate steps to record what occurred in QuickBooks. If you want guidance, refer to the solution video provided below.

  1. 1/1/22 – Prepare a General Journal Entry to Record the Purchase of a Fixed Asset: Craig purchased a brand new X5000 popcorn machine for $10,000 paid with cash. This machine will need to be depreciated over the 5 years of use and will have no salvage value. The machine is considered an uncategorized asset. (Depreciation will be handled later, for now simply record the purchase.)

  2. 12/25/22 – Make a Credit Sale: Craig received customer Purchase Order No. 12345 via email from customer Cassy Budd, prepared an invoice totaling $695, and shipped the goods from the warehouse. Payment terms were 2% 10/Net 30 (select Net 30 on the invoice form and manually adjust for the discount when payment is received). The following goods were shipped:

  1. 12/25/22 – Prepare Purchase Orders: Craig ordered 50 cougar tails from Cougar Tails, Inc., 45 bundles of one dozen long-stem roses in a vase from Spring Bloom, LLC., and 100 pairs of socks from Spuds, LLC on account using three different purchase orders. The goods will be received at the warehouse at a later date. The purchase order total for Cougar Tails is $100. The purchase order total for the long-stem roses is $1800 and the purchase order total for the pairs of socks is $300. Here are the details of the goods ordered:

  1. 12/30/22 – Collect an Account Receivable and Deposit to the Checking Account: Craig received an email notification from Sheri Bank of an ACH payment received from Cassy Budd. The ACH payment totaling $681.10 was payment for the goods purchased on credit on 12/25/22. The early payment discount of 2% was taken by Cassy Budd.

  2. 12/31/22 – Prepare a General Journal Entry to Record Depreciation on an Asset: Craig must record an adjusting entry for Depreciation Expense on the X5000 Popcorn Machine. To do so, you will need to calculate the depreciation based on the useful life provided in the first transaction. Note that you will need to create a new account called “Accumulated Depreciation”. When creating the account, ensure that the account type is “Fixed Asset” and the detail type is “Accumulated Depreciation”.

STEP 3: Report

Run a trial balance report for the dates 1/1/2022 to 12/31/2022. Your trial balance report should match the trial balance provided in the solution.

Data Files

Solution