ACCTG/BTM 437 Accounting Information Systems
ACCT/BTM 437 Project 2
Objectives:
● Gain proficiency in using a popular accounting software system
● Be able to understand connections among relational tables in a simple enterprise information system
● Better understand the strong connection between database systems and accounting software
Overview:
On January 1st this year, you opened astore in Edmonton (therefore Jan 1st is the company start date).
Requirements:
Set up company by using the following basic information (using other information you deem proper in the tutorial):
● Company Name: Use your own name.
● Business Number: same as in tutorial
● Accounts to create:
● Owner (you already have).
● Two separate employee accounts; one for serving Customers and the other for Suppliers (See Section 1.3.2)
● You can reuse the accounts you have used in tutorials.
● The checking account (CIBCCHK1) has the initial balance $3AAAA as of Oct 30th, this year, where AAAA is your last four digits of student ID.
Note:
QBO version we are using does not support create custom ID fields such as CustID and SupplierID, so you do not need to enter such info. The project will be marked on the correctness of your financial statements;
1. Enter the following information for your customers, suppliers, and products (initial balances were last confirmed as of Oct 20th this year; and there have been no changes or transactions until the end of Oct):
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Customers
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Telephone
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Initial Balance (GST included)
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C1
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Amy Smith
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11 11 st
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666-6661
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$500.00
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C2
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John Deol
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22 22nd Ave
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666-6662
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$200.00
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C3
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Justin Johnson
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33 33th Road
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666-6663
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$400.00
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C4
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Amanda Lam
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44 44 Ave
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666-6664
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$700.00
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Suppliers
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SupplierID
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Name
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Address
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Telephone
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OpeningBal (GST included)
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VD1
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Best Supplies Inc.
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105 105 St
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888-8887
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$1,000.00
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VD2
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Computer Components Inc.
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106 106 Ave
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888-8814
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$1,500.00
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VD3
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Office & Computer Supplies Inc.
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101 101 Road
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888-8888
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$2,000.00
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Inventory
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ItemID
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UM
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PurchCost
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SellingPrice
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ReorderPoint
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# on Hand
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BestSoftware
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Each
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$40.00
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$50.00
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10
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15
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HardDisk1
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Each
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$100.00
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$120.00
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15
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26
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LaserPrinter1
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Each
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$220.00
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$260.00
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10
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13
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Mouse1
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Box of 2
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$10.00
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$20.00
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10
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12
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Tape2
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Box of 4
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$15.00
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$20.00
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20
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24
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TaxSoftware1
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Each
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$110.00
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$140.00
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15
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30
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2. Transactions in the month of November
They can be found at the Appendix 1. Draw a simple (draft) REA diagram to help yourself understand the connections of the tables in Appendix 1 and three tables (Customers, Suppliers, Inventory).
● Both purchase and sales cycles should be on one diagram which includes attributes and relationships but not cardinalities (It will NOT be marked so strictly as in Project 1).
● Lines can cross each other. Foreign keys can be ignored in the (conceptual) REA diagram.
● You will need to turn it in with your project
Pay attention to the following:
● Use the Suppliers account to enter transactions for acquisition process and the Customers account for sales process.
● All sales transactions are credit sale, not cash sale.
● Warning: Product prices could change over time; standard, quoted, and actual prices could be different. When you record transactions, use the actual numbers.
● Cash receipts from customers are written in checks and you make bank deposit on the same day.
● Also, use the Admin account enter the following transactions.
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Date
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Transaction
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Nov 1
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Purchased a BMW SUV for $80,000 (plus GST) with $24,000 down payment (with Check No 21). The rest $60,000 was financed on 5-year car loan from CIBC with simple annual
interest rate 5%. The total service life of the vehicle is expected to be 10 years with salvage value $8,000.
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Nov 2
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You contributed $1,000 worth of office furniture for use in the business
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Nov 3
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Bought office equipment from West Edmon on credit $14,000 (GST included)
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4. John Deol, the customer left you a note saying that he was sorry, could not pay his balance and would not be found in the future. Wrote down his balance as bad debt on Nov 10th using Bad Debt Expense Account.
5. Complete the following month end adjustment transactions on Nov 30th :
● The inventory count taken on Nov 30th showed 2 pieces of BestSoftware are missing. Make adjustment if needed.
a. Adjustment Account: use an Inventory Adjustment account
● Use straight-line depreciation on the vehicle for the month.
● Pay the first month carloan with the interest calculated as the following:
● Monthly Interest amount =Loan outstanding x annual rate/12
● Adjust rental expense for the month
6. On Dec 5th, you received the bank statement (see the Appendix 2) and please do the bank reconciliation.
a. The initial balance is $3A,AAA and the ending balance should be $(4011.25+AAAA) where AAAA is your last four digits.
Turn in:
1. Turn in a combined PDF file assembled in the following order (important):
● The first page should be the cover page with your name and your last four digits of student ID
● The second page should be your simple (draft) REA diagram. You can draw by hand and scan it using your smartphone.
● Assemble the reports in the following order (important!) which should have professional looking, e.g., all columns for a report should be on the same page and so on.
o Profit and Loss Detailed Statement for the month of November.
o Balance Sheet Standard as of Dec 10th this year
o Reconciliation Report
● On the last page (optional), answer the following two optional questions:
o What do you like most about this project?
o What are the specific improvements for this project you would like to suggest?
2. Invite me (yji@ualberta) as your company’s accountant.
Attention: This is an individual project. Avoid any behaviour which could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University.