v" Martin is moving into his new space today. The furniture arrives in the morning. The total cost of the desk, large study table, and eight chairs Martin ordered from Frank's Furniture is $726. A bill, dated 13 [#ST8990] forthe total amount, is included with the shipment. The terms are Net 3t}. - You set up the new vendor: Frank's Furniture 217'4 Hardwood Street Sacramento, CA 95822 - You also set up a new account called Ofce Furniture {Account #185]. You decide to record depreciation on all xed assets in a single account so you don't check the Track Depreciation of this asset box. TIP: The account should have a Fixed Asset account type; Furniture 8: Fixture detail type. - Martinexpectsthe nnitureto lastfouryears. / Martin also purchases taro more computers and three more calculators since he's doing more tutoring at his new location. The equipment, purchased from Paper Bag Depot, costs $1,?l in total ($441 for the three calculators and $1,260 for the two computers). Martin expects the calculators and computers to last three years. Martin uses a new credit card to make the purchase. - You set up the general ledger account for the new credit card first. You use Prime Visa Payable as the account name and 2.2!} as the account number. TJP: Don't forget to select the appropriate Account type. You do not need to answer the question about when you want to start tracking your finances in the account - You enterthe credit card charge usinng as the date. TIP: Use the Expense form to record credit card charges. Paper Bag Depot is the Payee. Select the new credit card account as the Payment account. Leave the Ref no. blank. Set up VISA as anew payment method. Be sure to check the box indicating that \" This is a credit card.\" - TIP: If a sidebar appears on the right-hand side asking you to add a hill to this expense, ignore it. ./ You know you will have to pay the credit card company eventually so you go ahead and set them up as a vendor. - Prime Visa Company 55 Wall Street New York, NY l Terms: Net 15 1/ You pay January's rent {$150) with check #1102. The landlord is Pm Spaces. 15:22 it" Martin purchases some graphing paper, lined paper, markers, and pencils om Math Shack for $201 .'i', on account (Vendor Invoice #3659). He is tracking all tutoring supplies as an asset. At the end of the month, he'll determine the value of the supplies on hand and you'll make any necessary adjustments. The terms are Net 15. [Hill ./ Martin hands you the receipt for the $38! of gas he purchased at Cardinal Gas & Snacks using his VISA credit card and you enter the credit card expense in QED. - You save the new vendor without adding any additional vendor details. it" You take a look at the Unpaid Bills report in the What You Owe section of Roports. It looks like some of the bills were due last month! You know that can't be true so you look through the unpaid hill file. You correct the terms on each of the bills as follows: - Kathy's Co'ee [$25)Net 15 - Mal Shack {$24)Net 15 - Paper Bag Depot {$S)Net 3!) TIP: Click on the appropriate hills in the Unpaid Biiis report, enter the terms, and click Save and close. You don't need to update reference numbers or change account distributions. Since these are the normal terms for these three vendors, you also change the terms in the vendor records. While you're in the Vendor Center, you go ahead and add Net 30 terms to Sacramento Utilities, Books Galore, and Horizon Phone Inc. and Net 15 terms to Parent's Survival Weekly. You pay all bills due on or before 1/20/22 from the Checking account. . TIP: There should be four bills totaling $546.07. Start with check #1103. (There will be three Checks.) 1/10/22 You use the credit card to purchase a few general supplies (hand sanitizer, hand towels, etc.) from Math Shack. The cost ($28.61) is insignificant so you decide to expense the entire amount to the Office supplies expense account. 1/12/22 You receive two bills in the mail, which you record in QBO. . One of the bills, dated 1/12, is from Sacramento Utilities. The January bill (#01-59974) total is $145.21. The bill is due in 30 days. The other bill is from Parent's Survival Weekly, a parenting magazine targeting parents with teenage children. Martin had placed an ad for the Mathmagic clinic in this week's issue. The total cost is $100 ( vendor invoice #12213, dated 1/12). The payment terms are Net 15. 1/17/22 Although the Mathmagic Clinic was a success overall, there was one small incident. One of the friends of Martin who helped with the tutoring tripped over the feet of one of the students and fell into the study table. She ended up with a gash on her left hand. She went to the 24 Hour Quick Stitch Clinic and had her hand bandaged up. Luckily, she didn't require any stitches. The cost of the visit was $220 and the clinic gave Martin a bill, dated 1/15 (#121521). . The 24 Hour Quick Stitch Clinic's address is 7500 Medical Boulevard, Sacramento, CA 95822. The phone number is 916-222-9999. The terms are Net 10. TIP: You'll need to set up a new term. . You decide to expense the cost to Miscellaneous expense (Account 699). 1/19/22 Martin asks you to contact Frank's Furniture and order some shelving for the new space. He wants a unit that includes open shelves and some drawers. You call and talk to the represen- tative who gives you an estimate of $820. That sounds reasonable to you and you place the order. The furniture should arrive by the end of the month. 1/21/22 Your friend Samantha Levin helped Martin out at the clinic last Saturday by checking students in and out. Martin doesn't expect to hire her as an employee, but if you pay her more than $600 during the year, you'll need to file a 1099 for her at year-end. You decide to get every- thing set up just in case she's paid over the threshold. You set up a new general ledger account. You decide to name the account "Contract labor" and use account #625. You make it a sub-account of Labor costs and you use Cost of labor as the Detail type. You also set Samantha up as a vendor. Her address is 901 Angles Lane, Sacramento, CA 95822. Her phone number is 916-654-4321. Terms are Net 10. + You set her up as a 1099 vendor. Her social security number (Business ID number) is 222-33-6666. Samantha had agreed to a $25 per hour pay rate. She helped out for five hours so you write her a check (#1 106) for $125. 1/25/221/25/22 Martin hands you another gas receipt for $30. He purchased the gas at Cardinal Gas & Snacks using his credit card today. You record the charge in QBO. You pay all bills due on or before 2/5/22. . TIP: There should be three bills totaling $1,046. Start with check #1 107. 1/28/22 Martin brings in coffee drinks from Kathy's Coffee as a treat for getting through the first month in the new space. He hands you the receipt for $8.75. (He used the credit card to buy the coffee.) You decide to charge the coffee to a new account called "Staff relations" (a labor cost). You use 628 as the account number. TIP: This should be a sub-account of Labor Costs. The Detail Type should be Other Business Expenses. The shelving unit is delivered and installed by Frank's Furniture. Martin is impressed by the quality of the product. The actual price is the $820 you were originally quoted. The invoice number is ST9998, dated 1/28, and the terms are Net 30. Martin has been working hard and asks you to write him a check for $2,000. (Use check #1110.) . TIP: This is a corporation so a payment to Martin (other than salary or reimbursement) is a dividend, an equity account. Use 345 as the account number and "Dividends" as the account name. QBO doesn't have a Detail type for dividends. Use Partner Distributions as a substitute. Check numbers as of 1/31 Checking account balance:. $4,302.93 Accounts Payable: . . . $ 965.21 Net income (January only):. $5,392.4Reference: ACNT 1311- Quickbooks Online 2021 update / (MyBusinechom'seMath Revealed) Backgmmd infbnnatz'on: Martin Smith, a college student and good 'iend of yours, has always wanted to be an entreprenelu'. He is very good in math, so, to test his entrepreneurship skills, he has decided to setup a small math tutoring company serving local high school students who struggle in their math courses. He set up the company, Math Revealedl, as a corporation in 2021. Martin is the only owner. He has not taken any distnbutions 'om the company since it opened. The business has been successful so far. In fact, it's been so successful he has decided to work in his business full time now that he's graduated 'om college with a degree in mathematics. He has decided to start using QuickBooks Online to keep track of his business transactions. He likes the convenience of being able to access his information over the Internet. You have agreed to act as his accountant while you're nishing your own academic program. Martin currently has a number of regular customers that he tutors in PreAlgebra, Alge-bra, and Geometry. His customers pay his fees by cash or check after each tutoring session but he does give terms of Net 15 to some of his customers. He has developed the following fee schedule: Name Description Rate Re'esher One hour section $ 60 per hour Persistence program Two one- hour sessions per week $ 100 per week Crisis program Five one- hour sessions per week $ 225 per week The tutoring sessions usually take place at his students' homes but he recently signed a two-year lease on a small office above a local coffee shop. The rent is only $750 per month starting in January 2022. A security deposit of $500 was paid in December 2021. The following equipment is owned by the company: Description Date placed in service Cost Life Salvage Value Computer 7/1/21 $ 3,000 36 months $ 300 Printer 7/1/21 15 240 24 months $ 0 Graphing Calculators (3) 7/1/21 $ 300 36 months $ 30 All equipment is depreciated using the straight-line method As of 12/31/21, Martin owed $2,500 to his father (Richard Smith) who initially helped him get started. Richard is charging him interest at a 6% annual rate. Martin has been paying interest only on a monthly basis. His last payment of interest only was on 12/31/21. Over the next month or so, he plans to expand his business by selling a few products he believes will help his students. He has already purchased a few items: Category Description Vendor Qty on hand Cost/unit Sales price Books and Tools Geometry in Sports Books Galore 20 18 25 Solving Puzzles: Fun with Algebra Books Galore 20 15 22 Getting Ready for Calculus Books Galore 20 20 28 Geometry Kit Math Shack 10 12 18 Handheld Dry Erase Boards Math Shack 25 10 15 Notebooks (Pack of 5) Paper Bag Depot 10 8 12 1//3/22 I Since Martin is expanding his business, he decides to purchase a general liability insurance policy from Protector Insurance Company. The annual premium is $360. It covers the period 1/112/31/22. You write a check(#1101) to pay the full year premium amount. (You add Protector Insurance as a vendor without adding any detail information.) You will make an adjustment to recognize insurance expense for January at the end of the month. TIP: Enter the policy period in the description or memo eld. This will help when you make the adjustment as part of Chapter 5's assignment