For Chapter 5 – Valdez Realty – QuickBooks A detailed guide to assist students in completing the Valdez assignment at the end of Chapter 5 using QuickBooks®. PART A The June Accounting Cycle 1. Start QuickBooks® 2. To access the files for Valdez Realty for the first time, you will need to left- click on the box marked “Open an Existing Company.” (indicated by the arrow). After the first time you will find the company name in the list of companies and you may just click on the company name to highlight it and click “Open.”

3. Locate the Valdez file, (in your folder called Homework) then click on “Open.”

4. Insert your initials in front of the Company name so your reports can be identified.

5. Open the General Journal and record the following transactions for June 2007 (enter appropriate details into the Memo column for each transaction; and remember to enter the correct date for each transaction). For guidance on how to get to the General Journal, refer to the detailed instructions for Chapters 3 and 4. JUNE 1 JUAN VALDEZ INVESTED $18,000 CASH IN THE REAL ESTATE AGENCY ALONG WITH $3,000 IN OFFICE EQUIPMENT. DEPOSIT 1.

JUNE 1 RENTED OFFICE SPACE AND PAID THREE MONTHS RENT IN ADVANCE, $2,100. CHEQUE #601.

JUNE 1 BOUGHT A COMPANY AUTOMOBILE, $12,000. CHEQUE #602.

JUNE 4 PURCHASED OFFICE SUPPLIES FROM OFFICE DEPOT, $300. CHEQUE #603. INVOICE NUMBER D198795.

JUNE 5 PURCHASED MORE OFFICE SUPPLIES ON ACCOUNT FROM OFFICE DEPOT, $150. INVOICE NUMBER D198825. NET 30 DAYS.

JUNE 6 SOLD A HOUSE (H. PENCHANT) AND COLLECTED A $6,000 COMMISSION. DEPOSIT 2.

JUNE 8 PAID GAS BILL FOR CAR TO ANDERSON PETROLEUM, $22. CHEQUE #604.

JUNE 15 PAID THE SALARY OF THE PART-TIME OFFICE SECRETARY, PAMELA DAWSON, $350. CHEQUE #605.

JUNE 17 SOLD A BUILDING LOT FOR EAST END LAND DEVELOPERS AND EARNED A COMMISSION, $6,500. EXPECTED TO BE RECEIVED 7/8/07.

JUNE 20 JUAN VALDEZ WITHDREW $1,000 FROM THE BUSINESS TO PAY PERSONAL EXPENSES. CHEQUE #606.

JUNE 21 SOLD A HOUSE (L. HARRISON) AND COLLECTED A $3,500 COMMISSION. DEPOSIT 3.

JUNE 22 PAID GAS BILL FOR CAR (ANDERSON PETROLEUM), $25. CHEQUE #607.

JUNE 24 PAID $600 TO AUTO CITY WEST FOR REPAIRS TO CAR. INVOICE NUMBER WES3750. CHEQUE #608.

JUNE 30 PAID SALARY FOR OFFICE SECRETARY, PAMELA DAWSON, $350. CHEQUE #609.

JUNE 30 PAID THE JUNE TELEPHONE BILL, $510 TO PHONES ONTARIO. CHEQUE #610.

JUNE 30 RECEIVED ADVERTISING BILL FOR JUNE FROM CITY NEWS, $1,200. THEIR INVOICE NUMBER 4879 IS TO BE PAID ON 7/3/07.

6. After you have made and posted each of the above journal entries, close the General Journal. Print the following reports: a. General Journal (By posting date; all ledger entries 6/1/07 to 6/30/07). b. Trial Balance as at 6/30/07. Click on the Reports menu at the top of the screen and find Journal in the sub- menu of the Accountants & Taxes section. Trial Balance is available from the same menu as well.

You should have 16 Journal entries with the totals in the Debit and Credit columns reading $55,607. The completed General Journal report is displayed below:

Your Trial Balance should look like the following:

Review your printed reports. If you have made an error in a posted entry, make a correction following the directions in Correcting a Journal Entry in chapter 3. You should then reprint both of the above reports to hand in to your instructor. 7. This is a good time to make a backup copy of your data. There are two ways to accomplish this task. One way is to use the Backup command in the program.

The other is to actually make a second copy of the company file under a different name. We will make a second copy. First, you need to close the company. From the File menu, choose Close Company.

QuickBooks® does not have a Save As command to use. So in order to make an exact copy of the data file you are working on, you need to use a Windows® program such as: Explorer®, or My Computer®. We will show you using My Computer® Open My Computer® and locate the file for Valdez Realty. Copy this file using the Copy command in the Edit menu. Then click on Paste in the same menu.

You will get a file called Copy of Valdez Realty. Change the name to read ValJun1. Do this by using the Rename command on the File menu or the Rename this file icon shown below: (This will be your backup copy in case something goes wrong.)

Close the window and reopen the Valdez file in QuickBooks®

Copy this file

Change name to ValJun1

To use the Backup function in QuickBooks®, go to the File menu and select Back Up…

The following screen will appear.

Type ValJun1 into the box marked “Filename”. The default location is the Backup folder in the QuickBooks® Program folder. (If you wish you may change the location by clicking on the Browse button, then substituting your own Backup folder in its place.) The screen will go blank for a couple of seconds and you will receive the following message if your backup was successful:

Click OK to continue working

Should you need to restore your company from backup, click Restore a Backup file in the QuickBooks window

Click on Browse from the next screen.

Locate the backup file ValJun1, highlight it by clicking on it and select Open (shown on the screen below). You will return to the screen above where it will ask you where to restore your company. Click on Restore to complete the process. This procedure will save you from having to redo a lot of work if you mess up somewhere.

Click here

Then here

8. Return to the General Journal and record the following adjusting entries a. ONE MONTH’S RENT HAS EXPIRED. ADJUSTMENT 1 (use June 30th date)

b. AN INVENTORY SHOWS $120 OF OFFICE SUPPLIES REMAINING. ADJUSTMENT 2

c. AMORTIZATION ON OFFICE EQUIPMENT, $100. ADJUSTMENT 3

d. AMORTIZATION ON AUTOMOBILE, $200. ADJUSTMENT 4

9. After the above adjusting entries have been posted, close the General Journal then print the following reports:

a. General Journal (By posting date, all entries, 6/1/07 to 6/30/07). Follow the directions outlined above for printing your General Journal. Your Journal should now have the following four additional entries:

b. Trial Balance As at 6/30/07

Note the differences between this Trial Balance and the one you completed earlier. c. General Ledger Report (Start: 6/1/07, Finish 6/30/07, Select All). Select landscape orientation to print this report. It should be approximately 4 pages long. It is available through the same menu operation as the General Journal and the Trial Balance Reports.

d. Income Statement (Start 6/1/07, Finish 6/30/07). In QuickBooks® this is called the Profit & Loss Statement. You open this statement by using the submenu Company & Financial in the Reports menu. Use the Standard format to get the following report. You may print this one for handing in to your instructor.

e. Lastly, you will need to print a Balance Sheet As at 6/30/07. the report is found in the same submenu as the Profit and Loss statement. Print this to hand in to your instructor. Again, use the standard format Balance Sheet from the menu selections. The report is displayed below:

Type the dates in the appropriate spaces in the report window

Review your printed reports. If you have made an error in a posted entry, make any corrections needed and reprint the above reports. 10. Simply Accounting® and QuickBooks Pro® both have the capability of performing the first three steps of the closing process automatically. QuickBooks® automatically does this when the date goes beyond the closing date originally specified when the company is set up. You need not do anything to facilitate this. The following three steps are performed at the fiscal year-end: Step 1: Clear Revenue balance and transfer it to Income Summary Step 2: Clear individual Expense balances and transfer them to Income Summary Step 3: Clear balance in Income Summary and transfer it to Retained Earnings It does not have the capability to perform the fourth step of the closing process, transferring the Owner’s Withdrawals to the Retained Earnings account, so you will need to record this closing entry by making a separate General Journal entry dated June 30, 2007. Step 4: Clear the Withdrawals account balance and transfer it to Retained Earnings. Open the General Journal window and make an entry to transfer 3120 Owner’s Withdrawals to 3900 Retained Earnings account.

11. After you have posted the above closing entry for Juan Valdez’s withdrawals account, close the General Journal to return to the Company Navigator Window. 12. Make a backup of your data at this point. Name this backup ValJun2. 13. You now have three sets of company data files for Valdez Realty. The current data still lives where you put it (we suggest D:\Homework\Valdez). The two sets of backup data for June are stored on your backup media under the file names ValJun1 and ValJun2. 14. Print a Post-Closing Trial Balance As at 7/1/07. Note that all revenue and expense accounts have zero balances at this date.

15. Click the File menu; then click Close Company to end the current work session and return to your Windows® desktop. 16. Complete the Valdez Realty Report Transmittal for June located in Appendix A of your Study Guide with Working Papers. Take a well-deserved break!

PART B The July Accounting Cycle 1. Start QuickBooks Pro® 2. Choose Valdez Realty from the list provided or click on Select an Existing Company then choose Valdez Realty from the list of choices in the folder D:\Homework\. 3. Click Open to open your Valdez Realty data set. 4. Open the General Journal window and record the following journal entries for July: (enter appropriate comments for each transaction and the exact Date) JULY 2 PAID FOR JUNE OFFICE SUPPLIES PURCHASED ON ACCOUNT, $150. CHEQUE #611.

JULY 2 PURCHASED MORE OFFICE SUPPLIES ON ACCOUNT FROM OFFICE DEPOT, $700, THEIR INVOICE NUMBER D1996035.

JULY 3 PAID ADVERTISING BILL FOR JUNE. CHEQUE #612.

JULY 4 SOLD A HOUSE FOR A. TRAN AND COLLECTED A COMMISSION, #6,600. DEPOSIT 4.

JULY 6 PAID FOR GAS EXPENSE TO ANDERSON PETROLEUM, $29. CHEQUE #613.

JULY 8 COLLECTED COMMISSION FROM SALE OF BUILDING LOT ON 6/17/07.

JULY 12 PAID $300 TO HAMILTON REALTORS’ ASSOCIATION RE: ATTENDANCE AT REALTOR’S WORKSHOP. CHEQUE #614.

JULY 15 PAID SALARY OF THE OFFICE SECRETARY PAMELA DAWSON, $350. CHEQUE #615.

JULY 17 SOLD A HOUSE FOR H. HOLLEMEYER EARNING A COMMISSION OF $2,400. RECEIPT TO BE RECEIVED AUGUST 10. 2007.

JULY 18 SOLD A BUILDING LOT FOR B. GAME AND DEPOSITED A COMMISSION OF $7,000. DEPOSIT 5

JULY 22 SENT A CHEQUE TO MUSTARD SEED MINISTRIES FOR $40 TO HELP SPONSOR A LOCAL ROAD RACE TO AID THE POOR. (NOT ADVERTISING EXPENSE, BUT IT IS A BUSINESS EXPENSE).

JULY 24 PAID TO AUTO CITY WEST FOR REPAIRS TO AUTOMOBILE, $590. CHEQUE #617.

JULY 28 JUAN VALDEZ WITHDREW $1,800 FROM THE BUSINESS TO PAY PERSONAL EXPENSES. CHEQUE #618.

JULY 30 PAID THE SALARY OF THE OFFICE SECRETARY, PAMELA DAWSON, $350. CHEQUE #619.

JULY 30 PAID THE JULY TELEPHONE BILL TO PHONES ONTARIO, $590. CHEQUE #620.

JULY 30 ADVERTISING BILL FOR JULY RECEIVED FROM CITY NEWS, $1,400. THEIR INVOICE NUMBER 5400 WILL BE PAID ON AUGUST 4, 2007.

5. After you have made and posted each of these July journal entries, close the General Journal (by clicking on Save & Close), then print the following reports; a. General Journal (by Posting Date; all ledger entries 7/1/7 to 7/31/7)

You should have 16 transactions numbered 22 to 37. Print this report. b. Trial Balance As at 7/31/07

Review your reports. If you have made an error, see Correcting a Journal Entry in chapter 3 to make your correction and reprint the reports. This is a good time to practice your backup steps. Call this backup ValJul1. 6. Open the General Journal then record the following adjusting journal entries: a. ONE MONTH’S RENT HAS EXPIRED. ADJUSTMENT #1.

b. AN INVENTORY SHOWS $340 OF OFFICE SUPPLIES REMAINING. ADJUSTMENT #2.

c. AMORTIZATION ON OFFICE EQUIPMENT, $100. ADJUSTMENT #3.

d. AMORTIZATION ON AUTOMOBILE, $200. ADJUSTMENT #4.

7. After you have posted these adjusting journal entries, close the General Journal and print the following reports:

a. General Journal (by posting date, start 7/1/07, finish 7/31/07)

You should have four additional journal entries as shown above with the total amount showing as 31,479.00 in both debit and credit columns. b. Trial Balance As at 7/31/07

c. General Ledger Report (start 7/1/07, finish 7/31/07)

Once again, there will be about four pages of the General ledger Report. Make sure the dates are as shown. d. Income Statement (start 7/1/07, finish 7/31/07)

e. Balance Sheet As at 7/31/07

Review your reports. If your have made and error, make corrections and reprint the reports 8. Make another backup of your company files using the backup utility. Call this copy ValJun2. 9. You now have three sets of July company data files for Valdez Realty. The July current data is still stored under the path D:\Homework\Valdez Realty. The

backup data for July is stored twice – once under the file name ValJul1 and again as ValJul2. You also have two backups of your data from June – one called ValJun1 and the other ValJun2. Note that the working copy of your data as it was at the end of June no longer exists, except as a backup called ValJun2. 10. Under the File menu, click Close Company to end your work session. Then, exit QuickBooks Pro® to return to your Windows® desktop.