The purpose of this assignment is to have students become familiar with an accounting software package that accommodates budgeting. Students will set up accounts, enter an annual budget, and produce budget related output reports in QuickBooks.

STEP ONE:

Set up accounts.

Go to QuickBooks and login to your company. Choose the "Accounting" menu from the left-hand side of the screen and select "Chart of Accounts." Click "New" (green button on the upper right side of the screen).

Enter the "Account Type," "Detail Type," and "Name" for each of the following six accounts. Enter "Save and New" to enter another account, "Save and Close" when you have entered all accounts.

Name

Account Type

Detail Type

Equipment Revenues

Income

Sales of Product Income

Maintenance Contract Revenues

Income

Service/Fee Income

Marketing Expenses

Expenses

Advertising/Promotional

Distribution Expenses

Expenses

Shipping, Freight & Delivery

Customer Maintenance Costs

Expenses

Other Business Expenses

Administrative Costs

Expenses

Office/General Administrative Expenses

These accounts should now be shown on your Chart of Accounts. Please note that Cost of Goods Sold should already be on your Chart of Accounts.

STEP TWO:

a budget.

Using the information provided below, determine the budgeted revenue and expense items for your company for 2022.

The company's annual income statement for 2021, which is used as a basis for preparing the 2022 budget, is below (shown in thousands):

Company's Annual Income Statement For the year 2021 Revenues Equipment Maintenance contracts Total Revenues Cost of goods sold Gross margin $ 8,000,000 1,900,000 $ 9,900,000 4,000,000 Operating costs Marketing Distribution Customer Maintenance Administration Total Operating Costs Operating income 630,000 100,000 1,100,000 920,000 5,900,000 2,750,000 $ 3,150,000