This project is designed to introduce students to the Inventory module of the Peachtree software and to reinforce the application of the Accounts receivable and Accounts payable modules of the Peachtree accounting software as well as practice general journal entries and adjusting entries for a merchandising business.

Process:

Working individually, you will choose a type of merchandising business and give it a name.You will then determine the types of assets, liabilities, revenues and expenses that are used in that business.You will then create reasonable transactions for two months for that business.Your transactions must include at least:

• Initial investment in the business (at least 1)
• Purchase of long term assets for cash ( at least 2)
• Purchase of long term assets on credit (at least 2)
• Sales made for cash or credit (at least 6)
• Sales returns & Purchase Returns (at least 1 each)
• Purchases of inventory on Cash or on credit (at least 6)
• Expenses paid by cash or on credit (at least 2 each)
• Cash paid to creditors for amounts owing to them (at least 2)
• Cash received from customers for amounts owing from them (at least 2)
• Different adjusting entries (at least 2 depreciation entries and any other adjusting entries that are required for your company)

Company policies:

Your company should be organized as a corporation using the accrual basis, real time journalizing, a perpetual FIFO inventory system and preferably make a profit over the 2 months.

You will need to set up at least 4 inventory items, 3 customers and 3 vendors and use them in the transactions above.

You can set up your own terms and conditions for Credit Sales and Credit purchases.

Procedure:

1.Develop a set of business transactions and compile it in a word document based on the specifications given above.

2.Develop a chart of accounts for the company. (be sure to use the right account categories especially for A/R andA/P)

2.Set up the company in Peachtree using the general ledger, inventory, accounts payable and accounts receivable sections.Print out the chart of accounts.

3.Record the transactions for two months.

4.Print out the required reports.

Report:

Each student will submit a report that contains the following documents:

A brief description of the nature of your business.

A list of written transactions with dates typed in Word or Excel

Printout of the Chart of Accounts

General ledger

General ledger Trial Balance

Income statement

Balance sheet

Inventory valuation report

And answers to the following questions:

1.How is the accounting different for a merchandising company compared to a service company?

2.Give at least 3 benefits to using a computerized accounting package with an inventory module to account for a merchandising company.

3.What is the difference between "remit to" and "ship to"?

4.Which inventory methods can you choose in Peachtree?

5.What decisions can managers make based on the information on the inventory valuation report?

Word Limit/Page Limit:Not Applicable

Submission Mode: Soft Copy

Percentage of Total Marks: 20%

Project Due Date: Week 15- Tuesday 28^th April- 11:59PM on Blackboard

LEARNING OBJECTIVES:

Summary of Learning Outcomes -On completion of this project, student/s should know:

1.to prepare journal entries and adjusting entries for a merchandising business

2.to use and become familiar with a computerized accounting package

3.appreciate and use independent modules such as A/R; A/P and Inventory within

an integrated accounting software package.