Once you have completed the Chapter 1-6 materials and quizzes you may begin the Midterm project. The Midterm is based on completing all the work for AirCare Services, Chapter 7 in the Using Sage 50 2020 textbook. The chapter begins on page 213 and ends on page 270. You must complete all of the activities in the chapter and post all source documents. The Midterm is due by end of day, March 5, 2022. No extensions will be granted. The Midterm is out of 100 marks and is worth 35% of your final mark. Marks will be allocated as per the Marking Rubric you will find in this section. Please review the Rubric so that you understand all the requirements. You must submit a backup of the data file once you complete all the activities and post all the source documents. You may not use a backup file from another student as each backup has a digital signature from the computer completing the backup. Should I find that multiple students upload the same file, all students involved will receive a zero and the incident will be reported to the college registrar. You must also submit the following reports in "PDF" format: 1. A trial Balance as of May 1, 2023 2. All General Journal Entries 3. Tax Summary Report 4. Customer Aged Summary 5. Supplier Aged Summary 6. Customer List 7. Supplier List 8. Chart of Accounts CHAPTER SEVEN AirCare Services 30 After completing this chapter, you should be able to OBJECTIVES plan and design an accounting system for a small business prepare procedures for converting from a manual system understand the objectives of a computerized system create company files create and understand linked accounts set up accounts in the General, Payables and Receivables ledgers I enter historical information for suppliers and customers correct historical transactions after recording them set up credit cards for receipts and payments set up sales taxes and tax codes leave history in an unbalanced state finish entering history after entering journal transactions enter postdated transactions 1 COMPANY INFORMATION NOTES Air Care Services 100 Belair Avenue, Unit 25 Regina, SK S4T 402 Tel 1: (306) 456-1299 Tel 2: (888) 455-7194 Fax: (306) 456-3188 Business No.: 533 766 457 Company Profile ir Care Services, located in sunny Regina, Saskatchewan, has been operating A Simon Arturro. After his mechanical engineering education and several years' experience with heating installations, he became a certified installer of solar electrical panels. As more consumers are eager to rely less on fossil fuels as their source of power, the demand for solar energy is steadily increasing. Arturro has two assistants: a certified electrician and an assistant installer. Revenue comes from four sources: installation of new units, repairs, service contracts and subcontracting. Most jobs are new installations, either for individual customers or subcontracts for building projects. Small and medium-sized home roof installation jobs are usually finished in two to four days. Repair work, outside of the service contracts, may include removing and replacing the panels when customers 213 214 CHAPTER 7 are replacing a roof. Arturro also offers annual service contracts that provide free labour for existing installations. Some customers homeowners, owners of office buildings and builders have accounts with Air Care and receive a 1 percent discount if they pay within 10 days. They are asked to settle their accounts in 30 days, paying by cash or by cheque. PST and GST apply to all work completed by Air Care. Accounts have been set up with a local hardware store, with suppliers of solar panels and inverters (units that convert the solar DC power to AC) and other regular suppliers. After remitting all taxes before the end of March 2023, Arturro converted the accounts for Air Care using the following information: Business Information Chart of Accounts Income Statement Balance Sheet Trial Balance Supplier Information Customer Information Accounting Procedures BUSINESS INFORMATION AIR CARE SERVICES Date Format Short Date Format: MM dd yyyy On The Screen Use Long Dates Logo: SageData20\LOGOS\AIRCARE.BMP GENERAL SETTINGS: No changes COMPANY INFORMATION Address: 100 Belair Avenue, Unit 25 Regina, Saskatchewan S4T 402 Telephone 1: (306) 456-1299 Telephone 2: (888) 455-7194 Fax: (306) 456-3188 Website Address: aircare.com Business No.: 533 766 457 RT0001 Fiscal Start: January 1, 2023 Fiscal End: June 30, 2023 Earliest Transaction: March 31, 2023 Company Type: Construction/Contractor PAYABLES SETTINGS Address: Regina, Saskatchewan, Canada Options Aging Periods: 10, 30, 60 days Discounts Before Tax: Yes REPORTS & FORMS Choose settings for your printer and forms USER PREFERENCES Options Use Accounting Terms Automatically Save Changes to Records Show List Buttons Calculate Record Balances in Home Window by Session Date View Settings Hide: Inventory & Services, Employees & Payroll, Job Sites, Time & Billing Daily Business Manager: turn off Checklists: turn off Show Session Date at Startup Transaction Confirmation: confirmation turned on Pop-Ups: your preferences Allow Future Transactions, Warn If Transactions Are 7 Days In Future Warn If Accounts Are Not Balanced Backup Backup Weekly; Display reminders Turn off scheduled backup Features Do not use: goods received notes, quotes, orders, delivery orders, contracts, estimates, packing slips, projects (job sites) Use both French and English Credit Card Information Card Used: Visa Payable Account: 2160 Expense Account: 5020 Card Accepted: Visa Discount Fee: 2.9% Expense Account: 5020 Asset Account: 1070 Card Accepted: MasterCard Discount Fee: 2.7% Expense Account: 5020 Asset Account: 1080 Sales Taxes Taxes: GST; PST Codes: G-GST @ 5%; GP - GST @ 5%, PST @ 6%, non-refundable Forms Settings (Next Number) Sales Invoices No. 710 Receipts No. 200 Check for duplicates RECEIVABLES SETTINGS Address: Regina, Saskatchewan, Canada Options Aging Periods: 10, 30, 60 days Interest Charges: compound, 1.5% monthly rate, after 1 day Statements: Include Invoices for 31 days New Customer Tax Code: GP Discounts Payment Terms: 1/10, n/30 after tax Discounts Before Tax: No Line Discounts: No Comments Sales Invoice: Interest @ 1.5% per month charged on accounts over 30 days BANK ACCOUNTS: NEXT CHEQUE NO. Bank: Chequing 101 COMPANY SETTINGS System Do not allow dates before March 31, 2023 AIR CARE SERVICES RECEIVABLES & PAYABLES SETUP 215 CHART OF ACCOUNTS AIR CARE SERVICES 1550 Shop 1590 TOTAL SHOP & EQUIPMENT U EQUITY 3000 OWNER'S EQUITY [H] 3560 S. Arturro, Capital 3650 Net Income [X] 3690 UPDATED CAPITAL (U) ASSETS 1000 CURRENT ASSETS [H] 1010 Test Balance Account 1060 Bank: Chequing [A] 1070 Bank: Visa [A] 1080 Bank: MasterCard [A] 1100 Net Bank [S] 1200 Accounts Receivable 1210 Prepaid Insurance 1300 Solar Panels 1310 Inverters 1320 Electrical Supplies 1340 Office Supplies 1390 TOTAL CURRENT ASSETS U 1400 SHOP & EQUIPMENT [H] 1440 Computer System 1460 Service Equipment 1480 Tools 1500 Van LIABILITIES 2000 CURRENT LIABILITIES [H] 2100 Bank Loan 2160 Credit Card Payable 2200 Accounts Payable 2640 PST Payable 2650 GST Charged on Sales [A] 2670 GST Paid on Purchases [A] 2750 GST Owing (Refund) [S] 2790 TOTAL CURRENT LIABILITIES U 2800 LONG TERM LIABILITIES [H] 2850 Mortgage Payable 2890 TOTAL LONG TERM LIABILITIES U 5060 Hydro Expense 5070 Maintenance Services 5110 Computer Supplies Used 5120 Office Supplies Used 5150 Solar Panels Used 5160 Inverters Used 5180 Insurance Expense 5190 Telephone Expense 5200 Loan Interest Expense 5210 Mortgage Interest Expense 5290 TOTAL OPERATING EXPENSES U REVENUE 4000 GENERAL REVENUE [H] 4100 Installation Revenue 4140 Service Contract Revenue 4160 Subcontracting Revenue 4180 Sales Discounts 4200 Interest Revenue 4290 TOTAL REVENUE U EXPENSE 5000 OPERATING EXPENSES [H] 5010 Bank Charges 5020 Credit Card Fees 5040 Purchase Discounts 5300 PAYROLL EXPENSES [H] 5320 Wages 5340 Payroll Service Charges 5390 TOTAL PAYROLL EXPENSES U NOTES: The Chart of Accounts includes all accounts. Account types are marked for all subgroup Accounts [A], Subgroup totals [S], Heading accounts (H), Total accounts [Uand the type X account. All other unmarked accounts are postable Group accounts. INCOME STATEMENT AIR CARE SERVICES January 1 to March 31, 2023 $ Revenue 4000 GENERAL REVENUE 4100 Installation Revenue 4140 Service Contract Revenue 4160 Subcontracting Revenue 4180 Sales Discounts 4200 Interest Revenue 4290 TOTAL REVENUE $ 82 500 9900 21 000 -800 525 $113 125 Expenses 5000 OPERATING EXPENSES 5010 Bank Charges 5020 Credit Card Fees 5040 Purchase Discounts 5060 Hydro Expense 5070 Maintenance Services 5110 Computer Supplies Used 5120 Office Supplies Used 5150 Solar Panels Used 5160 Inverters Used 5180 Insurance Expense 5190 Telephone Expense 5200 Loan Interest Expense 5210 Mortgage Interest Expense 225 590 -300 750 1 365 1 200 1 150 36 000 16 000 3 600 400 625 2 400 TOTAL REVENUE $113 125 5290 TOTAL OPERATING EXPENSES $64 005 5300 PAYROLL EXPENSES [H] 5320 Wages 5340 Payroll Service Charges 5390 TOTAL PAYROLL EXPENSES 12 000 330 $12 330 TOTAL EXPENSE $76 335 NET INCOME (LOSS) $36 790 216 CHAPTER 7 BALANCE SHEET AIR CARE SERVICES March 31, 2023 $ 34 660 1 950 1 060 Assets 1000 CURRENT ASSETS 1060 Bank: Chequing 1070 Bank: Visa 1080 Bank: MasterCard 1100 Net Bank 1200 Accounts Receivable 1210 Prepaid Insurance 1300 Solar Panels 1310 Inverters 1320 Electrical Supplies 1340 Office Supplies 1390 TOTAL CURRENT ASSETS Liabilities 2000 CURRENT LIABILITIES 2100 Bank Loan 2160 Credit Card Payable 2200 Accounts Payable 2640 PST Payable 2650 GST Charged on Sales 2670 GST Paid on Purchases 2750 GST Owing (Refund) 2790 TOTAL CURRENT LIABILITIES $ 25 000 1 010 20 100 1 530 $1 530 -840 $ 37 670 24 200 3 800 28 280 33 420 6 100 400 $ 133 870 690 $ 48 330 2800 LONG TERM LIABILITIES 2850 Mortgage Payable 2890 TOTAL LONG TERM LIABILITIES 80 000 $ 80 000 $ 128 330 1400 OFFICE & EQUIPMENT 1440 Computer System 1460 Service Equipment 1480 Tools 1500 Van 1550 Shop 1590 TOTAL SHOP & EQUIPMENT 10 500 10 000 3 000 31 000 110 000 $164 500 TOTAL LIABILITIES Equity 3000 OWNER'S EQUITY 3560 S. Arturro, Capital 3650 Net Income 3690 UPDATED CAPITAL $ 133 250 36 790 $ 170 040 TOTAL ASSETS $298 370 TOTAL EQUITY $ 170 040 LIABILITIES AND EQUITY $298 370 TRIAL BALANCE AIR CARE SERVICES March 31, 2023 Credit Debit Credit $133 250 82 500 9 900 21 000 $ 800 525 Debit $ 34 660 1 950 1 060 24 200 3 800 28 280 33 420 6 100 400 10 500 10 000 3 000 31 000 110 000 225 590 1060 Bank: Chequing 1070 Bank: Visa 1080 Bank: MasterCard 1200 Accounts Receivable 1210 Prepaid Insurance 1300 Solar Panels 1310 Inverters 1320 Electrical Supplies 1340 Office Supplies 1440 Computer System 1460 Service Equipment 1480 Tools 1500 Van 1550 Shop 2100 Bank Loan 2160 Credit Card Payable 2200 Accounts Payable 2640 PST Payable 2650 GST Charged on Sales 2670 GST Paid on Purchases 2850 Mortgage Payable 300 3560 S. Arturro, Capital 4100 Installation Revenue 4140 Service Contract Revenue 4160 Subcontracting Revenue 4180 Sales Discounts 4200 Interest Revenue 5010 Bank Charges 5020 Credit Card Fees 5040 Purchase Discounts 5060 Hydro Expense 5070 Maintenance Services 5110 Computer Supplies Used 5120 Office Supplies Used 5150 Solar Panels Used 5160 Inverters Used 5180 Insurance Expense 5190 Telephone Expense 5200 Loan Interest Expense 5210 Mortgage Interest Expense 5320 Wages 5340 Payroll Service Charges $ 25 000 1 010 20 100 1 530 1 530 750 1 365 1 200 1 150 36 000 16 000 3 600 400 625 2 400 12 000 330 $376 645 840 80 000 $376 645 AIR CARE SERVICES RECEIVABLES & PAYABLES SETUP 217 SUPPLIER INFORMATION AIR CARE SERVICES YTD Purchases (Pre- & Post-Tax Payments) Tax Code Supplier Name (Contact) Email Website Tax ID Phone No. Fax No. Terms Account Address Beausejour Electrical Products 50 Shockley Rd., Unit 18 (Janine Beausejour) Regina, Saskatchewan S4F 212 Tel 1: (306) 476-5282 Tel 2: (306) 476-3997 Fax: (306) 476-5110 Tel: (306) 475-6432 Fax: (306) 475-8600 jb@beausejour.com beausejour.com 444 276 539 RT0001 1/10, n/30 $2 100 (before tax) ($2 000 & $2 100) 1320 G Green Earth Products Inc. (Ezra Green) 2 Greening St. Regina, Saskatchewan S4F 919 egreen@greenearth.com 1/10, n/30 greenearth.com (before tax) 177 235 447 RT0001 1310 G Killarney Solar Equipment (Kieper Warme) 91 Radiation St. Regina, Saskatchewan S4B 4F4 Tel: (306) 363-0210 Fax: (306) 363-2000 kw@heatexchange.com heatexchange.com 571 277 631 RT0001 1/5, n/30 (before tax) 1300 G net 1 canada.ca/en/revenue-agency ($790 & $790) No tax net 10 *Receiver General Sudbury Tax Services Office Tel 1: (800) 561-7761 for Canada PO Box 20004 Tel 2: (800) 959-2221 Sudbury, Ontario P3A 6B4 *Saskatchewan Energy Corp. 50 Watts Rd. Tel 1: (306) 755-6000 (Kira Strong) Regina, Saskatchewan S4G 5K8 Tel 2: (306) 755-3997 Fax: (306) 754-7201 *Saskatel 4 Speakers Corners Tel: (306) 361-3255 (Sotto Voce) Regina, Saskatchewan S4L 4G2 accounts@seg.ca seg.ca 459 021 648 RT0001 $840 ($800 & $840) G 5060 net 10 accounts@saskatel.ca saskatel.ca 492 304 597 RT0001 $666 ($600 & $666) GP 5190 net 10 Starbuck Advertising Agency 300 Flyer St. (Pam Fletts) Suite 800 Regina, Saskatchewan S4B 1C6 Tel: (306) 361-1727 Fax: (306) 361-8229 pfletts@saa.com saa.com 610 728 362 RT0001 $1 110 ($1 000 & $1 110) GP nbolter@yahoo.com net 15 Wheatfields Hardware (Nutley Bolter) 72 Hammer St. Tel 1: (306) 369-0808 Regina, Saskatchewan S4P 1B8 Tel 2: (306) 369-6222 $999 ($900 & $999) GP 385 416 821 RT0001 1480 net 30 Willow Garage (Axel Rodd) 699 Willow St. Tel 1: (306) 368-6444 Regina, Saskatchewan S4P 1B3 Tel 2: (306) 368-6000 axel@wefixcars.com wefixcars.com 129 732 012 RT0001 $444 ($400 & $444) GP NOTES: *For Receiver General, Saskatchewan Energy Corp. and Saskatel, Cheque is the default payment method for invoices. For all other suppliers, Pay Later is the default. OUTSTANDING SUPPLIER INVOICES AIR CARE SERVICES Supplier Name Terms Date Inv/Chq No. Amount Tax Total Beausejour Electrical Products $10 000 $500 $10 500 1/10, n/30 (before tax) Mar. 26/23 Mar. 26/23 1/10, n/30 (before tax) Mar. 28/23 4.500 2 000 100 2 100 $ 8 100 B-894 Cha 94 B-921 Balance owing KS-1031 Chq 96 Cha 98 Balance owing Killarney Solar Equipment 1/5, n/30 (before tax) $20 000 1 000 Mar. 25/23 Mar. 28/23 Mar. 31/23 $21 000 5 200 9900 $ 5 900 Grand Total $14 000 218 CHAPTER 7 CUSTOMER INFORMATION AIR CARE SERVICES Customer Name (Contact) Phone No. Fax No. Email Website Terms Revenue Acct Tax Code YTD Sales (Credit Limit) Customer Since Address Grande Pointe Towers (Sophie Grande) 77 LaPointe Cr. White City Saskatchewan SOG 5B0 Tel: (306) 322-7500 Fax: (306) 322-7436 sgrande@GPTowers.com 1/10, n/30 (after tax) GP Towers.com 4100 GP $11 000 ($20 000) Jan. 1/23 Midwest Funeral Home 8 Quiet St. (N. Mourning) Regina, Saskatchewan S4B1E1 Tel: (306) 763-WAKE or (306) 763-9253 Fax: (306) 762-9301 nm@midwestfh.com midwestfh.com 1/10, n/30 (after tax) 4140 GP ($10 000) Aug. 1/21 Oak Bluff Banquet Hall (Ann Oakley) 4 Celebration Ave. Regina, Saskatchewan S4V 3H7 Tel: (306) 622-7391 Fax: (306) 622-7900 annie@OBBH.com OBBH.com 1/10, n/30 (after tax) 4160 GP ($20 000) Mar. 1/23 Passions Department Store (Mann E. Kinn) 44 Highlife Ave. Regina, Saskatchewan S4L 2KO Tel: (306) 762-8662 Fax: (306) 763-9115 passions.com 1/10, n/30 (after tax) 4100 GP $6 300 ($15 000) Jan. 1/18 Regina School Board (Ed Ducate) 49 Trainer St. Regina, Saskatchewan S4C 436 Tel 1: (306) 466-5000 Tel 2: (306) 466-1123 Fax: (306) 466-2000 edd@rdsb.ca rdsb.ca 1/10, n/30 (after tax) 4100 GP $8 400 ($15 000) Mar. 1/23 Selkirk Community Centre (Elsa Peeples) 588 Populous St. Regina, Saskatchewan S4T 8N1 Tel: (306) 368-4575 Fax: (306) 368-2198 elsa@selkirk.com selkirk.com 1/10, n/30 (after tax) 4100 GP ($20 000) Jul. 1/20 NOTES: For all customers, Pay Later is the default payment method for invoices. OUTSTANDING CUSTOMER INVOICES AIR CARE SERVICES Customer Name Terms Date Inv/Chq No. Amount Total Grande Pointe Towers 1/10, n/30 (after tax) Mar. 24/23 Mar. 28/23 Mar. 28/23 699 Chq 4896 703 Balance owing $4 440 2460 2 220 1/10, n/30 (after tax) $4 200 Regina School Board 1/10, n/30 (after tax) Mar. 28/23 Mar. 28/23 701 Chq 10367 Balance owing $22 200 2 200 $20 000 Grand Total $24 200 Accounting Procedures Open-Invoice Accounting for Payables and Receivables The open-invoice method of accounting for invoices allows the business to keep track of each individual invoice and any partial payments made against it. This method is in contrast to methods that keep track of only the outstanding balance by combining all invoice balances owed to a supplier or by a customer. Sage 50 uses the open-invoice method. When invoices are fully paid, they should be removed periodically after statements are received from the supplier or sent to the customers. AIR CARE SERVICES RECEIVABLES & PAYABLES SETUP 219 GST and PST Air Care Services is a contractor business using the regular method of calculating GST. GST, at the rate of 5 percent, charged and collected from customers will be recorded as a liability in GST Charged on Sales. GST paid to suppliers will be recorded in GST Paid on Purchases as a decrease in tax liability. The balance owing, the difference between the GST charged and GST paid, or the request for a refund will be remitted to the Receiver General for Canada quarterly. Air Care charges customers 6 percent PST on all sales and pays PST on some goods. Air Care is exempt from PST for purchases of items that are sold or used in the installation work because the customer pays PST on the sales using these products. When PST is paid on purchases, the amount is added to the expense or asset amount for the purchase. It is not recorded separately because it is not refundable. NOTES Most bank services and other financial institution services are exempt from GST collection. In 2018, Saskatchewan raised the PST rate from 5 percent to 6 percent NOTES The terms Invoice and Bill are interchangeable. The Premium version uses Bill for the construction/contracting business and the Pro version uses Sales Invoice. Sales of Services Accounts are set up for several customers. Other customers pay for their purchases immediately by cash, cheque or credit card. Separate bank accounts are set up for credit card deposits. You can enter transactions for cash and credit card customers by choosing One-Time Customer and typing the name of the customer in the Address field or by typing the customer's name in the Name field and choosing the Quick Add or Continue option. For cash sales, the program will debit Bank: Chequing (or Bank: Visa or MasterCard for credit card payments) instead of the Accounts Receivable control account. Purchases PRO VERSION pro When we use the term Supplier for the Premium version, Pro version users should substitute the term Vendor. Most regular suppliers have given Air Care credit terms, including some discounts for early payment. Some purchases are accompanied by immediate payment, usually by cheque or credit card. Cheque payments are preferred because the cancelled cheques become part of the business records. Enter the cash transaction for purchases from new suppliers in the Payments Journal as an Other Payment or in the Purchases Journal. Choose the appropriate Payment Method; choose One-Time Supplier from the Supplier list and type the supplier's name in the Address field. You can also type the name in the Supplier field and choose Quick Add or Continue. For cash purchases paid by cash or cheque, the program will credit Bank: Chequing instead of the Accounts Payable control account. For credit card purchases, Credit Card Payable is credited. All other accounts for this transaction will be appropriately debited and credited. Discounts Air Care Services offers a 1 percent discount to account customers if they settle their accounts within 10 days. Full payment is requested within 30 days. These payment terms are set up as defaults. When the receipt is entered, if the discount is still available, the program will display the amount of the discount and the net amount owing automatically. Discounts are not allowed on partial payments or on cash purchases paid by cheque or credit card. All customer sales discounts are calculated on after-tax amounts. Some suppliers also offer discounts, calculated on the amounts before taxes, for early settlement of accounts. Again, when the terms are entered for the supplier and full payment is made before the discount period expires, the program will display the pretax discount as available and automatically calculate a net balance owing. Payment terms vary from supplier to supplier. Once you have completed the Chapter 1-6 materials and quizzes you may begin the Midterm project. The Midterm is based on completing all the work for AirCare Services, Chapter 7 in the Using Sage 50 2020 textbook. The chapter begins on page 213 and ends on page 270. You must complete all of the activities in the chapter and post all source documents. The Midterm is due by end of day, March 5, 2022. No extensions will be granted. The Midterm is out of 100 marks and is worth 35% of your final mark. Marks will be allocated as per the Marking Rubric you will find in this section. Please review the Rubric so that you understand all the requirements. You must submit a backup of the data file once you complete all the activities and post all the source documents. You may not use a backup file from another student as each backup has a digital signature from the computer completing the backup. Should I find that multiple students upload the same file, all students involved will receive a zero and the incident will be reported to the college registrar. You must also submit the following reports in "PDF" format: 1. A trial Balance as of May 1, 2023 2. All General Journal Entries 3. Tax Summary Report 4. Customer Aged Summary 5. Supplier Aged Summary 6. Customer List 7. Supplier List 8. Chart of Accounts CHAPTER SEVEN AirCare Services 30 After completing this chapter, you should be able to OBJECTIVES plan and design an accounting system for a small business prepare procedures for converting from a manual system understand the objectives of a computerized system create company files create and understand linked accounts set up accounts in the General, Payables and Receivables ledgers I enter historical information for suppliers and customers correct historical transactions after recording them set up credit cards for receipts and payments set up sales taxes and tax codes leave history in an unbalanced state finish entering history after entering journal transactions enter postdated transactions 1 COMPANY INFORMATION NOTES Air Care Services 100 Belair Avenue, Unit 25 Regina, SK S4T 402 Tel 1: (306) 456-1299 Tel 2: (888) 455-7194 Fax: (306) 456-3188 Business No.: 533 766 457 Company Profile ir Care Services, located in sunny Regina, Saskatchewan, has been operating A Simon Arturro. After his mechanical engineering education and several years' experience with heating installations, he became a certified installer of solar electrical panels. As more consumers are eager to rely less on fossil fuels as their source of power, the demand for solar energy is steadily increasing. Arturro has two assistants: a certified electrician and an assistant installer. Revenue comes from four sources: installation of new units, repairs, service contracts and subcontracting. Most jobs are new installations, either for individual customers or subcontracts for building projects. Small and medium-sized home roof installation jobs are usually finished in two to four days. Repair work, outside of the service contracts, may include removing and replacing the panels when customers 213 214 CHAPTER 7 are replacing a roof. Arturro also offers annual service contracts that provide free labour for existing installations. Some customers homeowners, owners of office buildings and builders have accounts with Air Care and receive a 1 percent discount if they pay within 10 days. They are asked to settle their accounts in 30 days, paying by cash or by cheque. PST and GST apply to all work completed by Air Care. Accounts have been set up with a local hardware store, with suppliers of solar panels and inverters (units that convert the solar DC power to AC) and other regular suppliers. After remitting all taxes before the end of March 2023, Arturro converted the accounts for Air Care using the following information: Business Information Chart of Accounts Income Statement Balance Sheet Trial Balance Supplier Information Customer Information Accounting Procedures BUSINESS INFORMATION AIR CARE SERVICES Date Format Short Date Format: MM dd yyyy On The Screen Use Long Dates Logo: SageData20\LOGOS\AIRCARE.BMP GENERAL SETTINGS: No changes COMPANY INFORMATION Address: 100 Belair Avenue, Unit 25 Regina, Saskatchewan S4T 402 Telephone 1: (306) 456-1299 Telephone 2: (888) 455-7194 Fax: (306) 456-3188 Website Address: aircare.com Business No.: 533 766 457 RT0001 Fiscal Start: January 1, 2023 Fiscal End: June 30, 2023 Earliest Transaction: March 31, 2023 Company Type: Construction/Contractor PAYABLES SETTINGS Address: Regina, Saskatchewan, Canada Options Aging Periods: 10, 30, 60 days Discounts Before Tax: Yes REPORTS & FORMS Choose settings for your printer and forms USER PREFERENCES Options Use Accounting Terms Automatically Save Changes to Records Show List Buttons Calculate Record Balances in Home Window by Session Date View Settings Hide: Inventory & Services, Employees & Payroll, Job Sites, Time & Billing Daily Business Manager: turn off Checklists: turn off Show Session Date at Startup Transaction Confirmation: confirmation turned on Pop-Ups: your preferences Allow Future Transactions, Warn If Transactions Are 7 Days In Future Warn If Accounts Are Not Balanced Backup Backup Weekly; Display reminders Turn off scheduled backup Features Do not use: goods received notes, quotes, orders, delivery orders, contracts, estimates, packing slips, projects (job sites) Use both French and English Credit Card Information Card Used: Visa Payable Account: 2160 Expense Account: 5020 Card Accepted: Visa Discount Fee: 2.9% Expense Account: 5020 Asset Account: 1070 Card Accepted: MasterCard Discount Fee: 2.7% Expense Account: 5020 Asset Account: 1080 Sales Taxes Taxes: GST; PST Codes: G-GST @ 5%; GP - GST @ 5%, PST @ 6%, non-refundable Forms Settings (Next Number) Sales Invoices No. 710 Receipts No. 200 Check for duplicates RECEIVABLES SETTINGS Address: Regina, Saskatchewan, Canada Options Aging Periods: 10, 30, 60 days Interest Charges: compound, 1.5% monthly rate, after 1 day Statements: Include Invoices for 31 days New Customer Tax Code: GP Discounts Payment Terms: 1/10, n/30 after tax Discounts Before Tax: No Line Discounts: No Comments Sales Invoice: Interest @ 1.5% per month charged on accounts over 30 days BANK ACCOUNTS: NEXT CHEQUE NO. Bank: Chequing 101 COMPANY SETTINGS System Do not allow dates before March 31, 2023 AIR CARE SERVICES RECEIVABLES & PAYABLES SETUP 215 CHART OF ACCOUNTS AIR CARE SERVICES 1550 Shop 1590 TOTAL SHOP & EQUIPMENT U EQUITY 3000 OWNER'S EQUITY [H] 3560 S. Arturro, Capital 3650 Net Income [X] 3690 UPDATED CAPITAL (U) ASSETS 1000 CURRENT ASSETS [H] 1010 Test Balance Account 1060 Bank: Chequing [A] 1070 Bank: Visa [A] 1080 Bank: MasterCard [A] 1100 Net Bank [S] 1200 Accounts Receivable 1210 Prepaid Insurance 1300 Solar Panels 1310 Inverters 1320 Electrical Supplies 1340 Office Supplies 1390 TOTAL CURRENT ASSETS U 1400 SHOP & EQUIPMENT [H] 1440 Computer System 1460 Service Equipment 1480 Tools 1500 Van LIABILITIES 2000 CURRENT LIABILITIES [H] 2100 Bank Loan 2160 Credit Card Payable 2200 Accounts Payable 2640 PST Payable 2650 GST Charged on Sales [A] 2670 GST Paid on Purchases [A] 2750 GST Owing (Refund) [S] 2790 TOTAL CURRENT LIABILITIES U 2800 LONG TERM LIABILITIES [H] 2850 Mortgage Payable 2890 TOTAL LONG TERM LIABILITIES U 5060 Hydro Expense 5070 Maintenance Services 5110 Computer Supplies Used 5120 Office Supplies Used 5150 Solar Panels Used 5160 Inverters Used 5180 Insurance Expense 5190 Telephone Expense 5200 Loan Interest Expense 5210 Mortgage Interest Expense 5290 TOTAL OPERATING EXPENSES U REVENUE 4000 GENERAL REVENUE [H] 4100 Installation Revenue 4140 Service Contract Revenue 4160 Subcontracting Revenue 4180 Sales Discounts 4200 Interest Revenue 4290 TOTAL REVENUE U EXPENSE 5000 OPERATING EXPENSES [H] 5010 Bank Charges 5020 Credit Card Fees 5040 Purchase Discounts 5300 PAYROLL EXPENSES [H] 5320 Wages 5340 Payroll Service Charges 5390 TOTAL PAYROLL EXPENSES U NOTES: The Chart of Accounts includes all accounts. Account types are marked for all subgroup Accounts [A], Subgroup totals [S], Heading accounts (H), Total accounts [Uand the type X account. All other unmarked accounts are postable Group accounts. INCOME STATEMENT AIR CARE SERVICES January 1 to March 31, 2023 $ Revenue 4000 GENERAL REVENUE 4100 Installation Revenue 4140 Service Contract Revenue 4160 Subcontracting Revenue 4180 Sales Discounts 4200 Interest Revenue 4290 TOTAL REVENUE $ 82 500 9900 21 000 -800 525 $113 125 Expenses 5000 OPERATING EXPENSES 5010 Bank Charges 5020 Credit Card Fees 5040 Purchase Discounts 5060 Hydro Expense 5070 Maintenance Services 5110 Computer Supplies Used 5120 Office Supplies Used 5150 Solar Panels Used 5160 Inverters Used 5180 Insurance Expense 5190 Telephone Expense 5200 Loan Interest Expense 5210 Mortgage Interest Expense 225 590 -300 750 1 365 1 200 1 150 36 000 16 000 3 600 400 625 2 400 TOTAL REVENUE $113 125 5290 TOTAL OPERATING EXPENSES $64 005 5300 PAYROLL EXPENSES [H] 5320 Wages 5340 Payroll Service Charges 5390 TOTAL PAYROLL EXPENSES 12 000 330 $12 330 TOTAL EXPENSE $76 335 NET INCOME (LOSS) $36 790 216 CHAPTER 7 BALANCE SHEET AIR CARE SERVICES March 31, 2023 $ 34 660 1 950 1 060 Assets 1000 CURRENT ASSETS 1060 Bank: Chequing 1070 Bank: Visa 1080 Bank: MasterCard 1100 Net Bank 1200 Accounts Receivable 1210 Prepaid Insurance 1300 Solar Panels 1310 Inverters 1320 Electrical Supplies 1340 Office Supplies 1390 TOTAL CURRENT ASSETS Liabilities 2000 CURRENT LIABILITIES 2100 Bank Loan 2160 Credit Card Payable 2200 Accounts Payable 2640 PST Payable 2650 GST Charged on Sales 2670 GST Paid on Purchases 2750 GST Owing (Refund) 2790 TOTAL CURRENT LIABILITIES $ 25 000 1 010 20 100 1 530 $1 530 -840 $ 37 670 24 200 3 800 28 280 33 420 6 100 400 $ 133 870 690 $ 48 330 2800 LONG TERM LIABILITIES 2850 Mortgage Payable 2890 TOTAL LONG TERM LIABILITIES 80 000 $ 80 000 $ 128 330 1400 OFFICE & EQUIPMENT 1440 Computer System 1460 Service Equipment 1480 Tools 1500 Van 1550 Shop 1590 TOTAL SHOP & EQUIPMENT 10 500 10 000 3 000 31 000 110 000 $164 500 TOTAL LIABILITIES Equity 3000 OWNER'S EQUITY 3560 S. Arturro, Capital 3650 Net Income 3690 UPDATED CAPITAL $ 133 250 36 790 $ 170 040 TOTAL ASSETS $298 370 TOTAL EQUITY $ 170 040 LIABILITIES AND EQUITY $298 370 TRIAL BALANCE AIR CARE SERVICES March 31, 2023 Credit Debit Credit $133 250 82 500 9 900 21 000 $ 800 525 Debit $ 34 660 1 950 1 060 24 200 3 800 28 280 33 420 6 100 400 10 500 10 000 3 000 31 000 110 000 225 590 1060 Bank: Chequing 1070 Bank: Visa 1080 Bank: MasterCard 1200 Accounts Receivable 1210 Prepaid Insurance 1300 Solar Panels 1310 Inverters 1320 Electrical Supplies 1340 Office Supplies 1440 Computer System 1460 Service Equipment 1480 Tools 1500 Van 1550 Shop 2100 Bank Loan 2160 Credit Card Payable 2200 Accounts Payable 2640 PST Payable 2650 GST Charged on Sales 2670 GST Paid on Purchases 2850 Mortgage Payable 300 3560 S. Arturro, Capital 4100 Installation Revenue 4140 Service Contract Revenue 4160 Subcontracting Revenue 4180 Sales Discounts 4200 Interest Revenue 5010 Bank Charges 5020 Credit Card Fees 5040 Purchase Discounts 5060 Hydro Expense 5070 Maintenance Services 5110 Computer Supplies Used 5120 Office Supplies Used 5150 Solar Panels Used 5160 Inverters Used 5180 Insurance Expense 5190 Telephone Expense 5200 Loan Interest Expense 5210 Mortgage Interest Expense 5320 Wages 5340 Payroll Service Charges $ 25 000 1 010 20 100 1 530 1 530 750 1 365 1 200 1 150 36 000 16 000 3 600 400 625 2 400 12 000 330 $376 645 840 80 000 $376 645 AIR CARE SERVICES RECEIVABLES & PAYABLES SETUP 217 SUPPLIER INFORMATION AIR CARE SERVICES YTD Purchases (Pre- & Post-Tax Payments) Tax Code Supplier Name (Contact) Email Website Tax ID Phone No. Fax No. Terms Account Address Beausejour Electrical Products 50 Shockley Rd., Unit 18 (Janine Beausejour) Regina, Saskatchewan S4F 212 Tel 1: (306) 476-5282 Tel 2: (306) 476-3997 Fax: (306) 476-5110 Tel: (306) 475-6432 Fax: (306) 475-8600 jb@beausejour.com beausejour.com 444 276 539 RT0001 1/10, n/30 $2 100 (before tax) ($2 000 & $2 100) 1320 G Green Earth Products Inc. (Ezra Green) 2 Greening St. Regina, Saskatchewan S4F 919 egreen@greenearth.com 1/10, n/30 greenearth.com (before tax) 177 235 447 RT0001 1310 G Killarney Solar Equipment (Kieper Warme) 91 Radiation St. Regina, Saskatchewan S4B 4F4 Tel: (306) 363-0210 Fax: (306) 363-2000 kw@heatexchange.com heatexchange.com 571 277 631 RT0001 1/5, n/30 (before tax) 1300 G net 1 canada.ca/en/revenue-agency ($790 & $790) No tax net 10 *Receiver General Sudbury Tax Services Office Tel 1: (800) 561-7761 for Canada PO Box 20004 Tel 2: (800) 959-2221 Sudbury, Ontario P3A 6B4 *Saskatchewan Energy Corp. 50 Watts Rd. Tel 1: (306) 755-6000 (Kira Strong) Regina, Saskatchewan S4G 5K8 Tel 2: (306) 755-3997 Fax: (306) 754-7201 *Saskatel 4 Speakers Corners Tel: (306) 361-3255 (Sotto Voce) Regina, Saskatchewan S4L 4G2 accounts@seg.ca seg.ca 459 021 648 RT0001 $840 ($800 & $840) G 5060 net 10 accounts@saskatel.ca saskatel.ca 492 304 597 RT0001 $666 ($600 & $666) GP 5190 net 10 Starbuck Advertising Agency 300 Flyer St. (Pam Fletts) Suite 800 Regina, Saskatchewan S4B 1C6 Tel: (306) 361-1727 Fax: (306) 361-8229 pfletts@saa.com saa.com 610 728 362 RT0001 $1 110 ($1 000 & $1 110) GP nbolter@yahoo.com net 15 Wheatfields Hardware (Nutley Bolter) 72 Hammer St. Tel 1: (306) 369-0808 Regina, Saskatchewan S4P 1B8 Tel 2: (306) 369-6222 $999 ($900 & $999) GP 385 416 821 RT0001 1480 net 30 Willow Garage (Axel Rodd) 699 Willow St. Tel 1: (306) 368-6444 Regina, Saskatchewan S4P 1B3 Tel 2: (306) 368-6000 axel@wefixcars.com wefixcars.com 129 732 012 RT0001 $444 ($400 & $444) GP NOTES: *For Receiver General, Saskatchewan Energy Corp. and Saskatel, Cheque is the default payment method for invoices. For all other suppliers, Pay Later is the default. OUTSTANDING SUPPLIER INVOICES AIR CARE SERVICES Supplier Name Terms Date Inv/Chq No. Amount Tax Total Beausejour Electrical Products $10 000 $500 $10 500 1/10, n/30 (before tax) Mar. 26/23 Mar. 26/23 1/10, n/30 (before tax) Mar. 28/23 4.500 2 000 100 2 100 $ 8 100 B-894 Cha 94 B-921 Balance owing KS-1031 Chq 96 Cha 98 Balance owing Killarney Solar Equipment 1/5, n/30 (before tax) $20 000 1 000 Mar. 25/23 Mar. 28/23 Mar. 31/23 $21 000 5 200 9900 $ 5 900 Grand Total $14 000 218 CHAPTER 7 CUSTOMER INFORMATION AIR CARE SERVICES Customer Name (Contact) Phone No. Fax No. Email Website Terms Revenue Acct Tax Code YTD Sales (Credit Limit) Customer Since Address Grande Pointe Towers (Sophie Grande) 77 LaPointe Cr. White City Saskatchewan SOG 5B0 Tel: (306) 322-7500 Fax: (306) 322-7436 sgrande@GPTowers.com 1/10, n/30 (after tax) GP Towers.com 4100 GP $11 000 ($20 000) Jan. 1/23 Midwest Funeral Home 8 Quiet St. (N. Mourning) Regina, Saskatchewan S4B1E1 Tel: (306) 763-WAKE or (306) 763-9253 Fax: (306) 762-9301 nm@midwestfh.com midwestfh.com 1/10, n/30 (after tax) 4140 GP ($10 000) Aug. 1/21 Oak Bluff Banquet Hall (Ann Oakley) 4 Celebration Ave. Regina, Saskatchewan S4V 3H7 Tel: (306) 622-7391 Fax: (306) 622-7900 annie@OBBH.com OBBH.com 1/10, n/30 (after tax) 4160 GP ($20 000) Mar. 1/23 Passions Department Store (Mann E. Kinn) 44 Highlife Ave. Regina, Saskatchewan S4L 2KO Tel: (306) 762-8662 Fax: (306) 763-9115 passions.com 1/10, n/30 (after tax) 4100 GP $6 300 ($15 000) Jan. 1/18 Regina School Board (Ed Ducate) 49 Trainer St. Regina, Saskatchewan S4C 436 Tel 1: (306) 466-5000 Tel 2: (306) 466-1123 Fax: (306) 466-2000 edd@rdsb.ca rdsb.ca 1/10, n/30 (after tax) 4100 GP $8 400 ($15 000) Mar. 1/23 Selkirk Community Centre (Elsa Peeples) 588 Populous St. Regina, Saskatchewan S4T 8N1 Tel: (306) 368-4575 Fax: (306) 368-2198 elsa@selkirk.com selkirk.com 1/10, n/30 (after tax) 4100 GP ($20 000) Jul. 1/20 NOTES: For all customers, Pay Later is the default payment method for invoices. OUTSTANDING CUSTOMER INVOICES AIR CARE SERVICES Customer Name Terms Date Inv/Chq No. Amount Total Grande Pointe Towers 1/10, n/30 (after tax) Mar. 24/23 Mar. 28/23 Mar. 28/23 699 Chq 4896 703 Balance owing $4 440 2460 2 220 1/10, n/30 (after tax) $4 200 Regina School Board 1/10, n/30 (after tax) Mar. 28/23 Mar. 28/23 701 Chq 10367 Balance owing $22 200 2 200 $20 000 Grand Total $24 200 Accounting Procedures Open-Invoice Accounting for Payables and Receivables The open-invoice method of accounting for invoices allows the business to keep track of each individual invoice and any partial payments made against it. This method is in contrast to methods that keep track of only the outstanding balance by combining all invoice balances owed to a supplier or by a customer. Sage 50 uses the open-invoice method. When invoices are fully paid, they should be removed periodically after statements are received from the supplier or sent to the customers. AIR CARE SERVICES RECEIVABLES & PAYABLES SETUP 219 GST and PST Air Care Services is a contractor business using the regular method of calculating GST. GST, at the rate of 5 percent, charged and collected from customers will be recorded as a liability in GST Charged on Sales. GST paid to suppliers will be recorded in GST Paid on Purchases as a decrease in tax liability. The balance owing, the difference between the GST charged and GST paid, or the request for a refund will be remitted to the Receiver General for Canada quarterly. Air Care charges customers 6 percent PST on all sales and pays PST on some goods. Air Care is exempt from PST for purchases of items that are sold or used in the installation work because the customer pays PST on the sales using these products. When PST is paid on purchases, the amount is added to the expense or asset amount for the purchase. It is not recorded separately because it is not refundable. NOTES Most bank services and other financial institution services are exempt from GST collection. In 2018, Saskatchewan raised the PST rate from 5 percent to 6 percent NOTES The terms Invoice and Bill are interchangeable. The Premium version uses Bill for the construction/contracting business and the Pro version uses Sales Invoice. Sales of Services Accounts are set up for several customers. Other customers pay for their purchases immediately by cash, cheque or credit card. Separate bank accounts are set up for credit card deposits. You can enter transactions for cash and credit card customers by choosing One-Time Customer and typing the name of the customer in the Address field or by typing the customer's name in the Name field and choosing the Quick Add or Continue option. For cash sales, the program will debit Bank: Chequing (or Bank: Visa or MasterCard for credit card payments) instead of the Accounts Receivable control account. Purchases PRO VERSION pro When we use the term Supplier for the Premium version, Pro version users should substitute the term Vendor. Most regular suppliers have given Air Care credit terms, including some discounts for early payment. Some purchases are accompanied by immediate payment, usually by cheque or credit card. Cheque payments are preferred because the cancelled cheques become part of the business records. Enter the cash transaction for purchases from new suppliers in the Payments Journal as an Other Payment or in the Purchases Journal. Choose the appropriate Payment Method; choose One-Time Supplier from the Supplier list and type the supplier's name in the Address field. You can also type the name in the Supplier field and choose Quick Add or Continue. For cash purchases paid by cash or cheque, the program will credit Bank: Chequing instead of the Accounts Payable control account. For credit card purchases, Credit Card Payable is credited. All other accounts for this transaction will be appropriately debited and credited. Discounts Air Care Services offers a 1 percent discount to account customers if they settle their accounts within 10 days. Full payment is requested within 30 days. These payment terms are set up as defaults. When the receipt is entered, if the discount is still available, the program will display the amount of the discount and the net amount owing automatically. Discounts are not allowed on partial payments or on cash purchases paid by cheque or credit card. All customer sales discounts are calculated on after-tax amounts. Some suppliers also offer discounts, calculated on the amounts before taxes, for early settlement of accounts. Again, when the terms are entered for the supplier and full payment is made before the discount period expires, the program will display the pretax discount as available and automatically calculate a net balance owing. Payment terms vary from supplier to supplier