Champion Wave Surf, Inc

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Champion Wave Surf, Inc.

1st Edition

Computer Simulation Project

STUDENT’S MANUAL

 

 

 

 

 

 

 

Champion Wave Surf, Inc.

Preface

Champion Wave Surf, Inc. is a computerized accounting project designed for students taking Financial Accounting. The project is intended to reinforce concepts taught in Financial Accounting courses, while allowing students the use of Wave Accounting software to aid in their understanding of computerized accounting. The project is not intended to teach Wave Accounting, but simply uses Wave in a limited capacity to give students the opportunity to understand the usefulness of computers and software in the accounting world, but still compelling them to fully comprehend each accounting transaction and the accounting process.

Introduction

Background

Champion Wave Surf, Inc. is a small corporation, operated by Max Kolbe, the majority stockholder. The business opened on January 1, 2007, at its beautiful location in Morro Bay, California. Champion Wave has been successful in its first two months of operations, gaining popularity among the locals and tourists on the Central Coast. In addition to selling surfboards, accessories and apparel, Champion Wave also provides surfboard repair services and offers private surfing lessons.

As the new accounting intern for the company, you have been asked to complete the accounting for the last two weeks of March, prepare the financial statements and close the books at the end of the first quarter, March 31, 2007. This will require that you post all accounting transactions for the last two weeks of the month of March, reconcile the bank account, post any adjusting entries, print and analyze the financial statements, and, finally, post the closing entries. During the process, you are expected to audit your own work and make any correcting entries as you go. Max has provided you with the accounting files which have been completed through March 17, 2007.

Before you begin recording the transactions, it is important that you become familiar with Champion Wave's chart of accounts and you thoroughly understand the company's accounting procedures. Max has provided you with the complete chart of accounts along with some detailed information from his CPA that you should review.

 

 

 

Chart of Accounts
Summary
ASSETS
101	Cash
102	Petty Cash
115	Certificate of Deposit
120	Accounts Receivable
125	Credit Cards Receivable
130	Interest Receivable
150	Merchandise Inventory
160	Prepaid Advertising
161	Prepaid Insurance
162	Prepaid Rent
170	Store Supplies
180	Equipment
181	Accumulated Depreciation, Equipment
185	Furniture & Fixtures
186	Accumulated Depreciation, Furniture & Fixtures
LIABILITIES
201	Accounts Payable
210	Dividends Payable
220	Interest Payable
240	Sales Tax Payable
250	Wages Payable
260	Unearned Revenue
280	Notes Payable
STOCKHOLDERS' EQUITY
310	Common Stock
320	Retained Earnings
390	Dividends
REVENUE
401	Sales Revenue
410	Lesson Revenue
420	Repair Revenue
COST OF GOODS SOLD
501	Cost of Goods Sold

 

 

EXPENSES
601	Advertising Expense
605	Bank Charges
607	Cash Over / Short
610	Credit Card Processing Expense
612	Delivery Expense
615	Depreciation Expense, Equipment
616	Depreciation Expense, Furniture & Fixtures
620	Insurance Expense
625	Professional Fees
630	Rent Expense
635	Repairs & Maintenance
650	Salaries & Wages Expense
660	Store Supplies Expense
665	Telephone Expense
667	Utilities Expense
OTHER INCOME & EXPENSES
700	Interest Income
750	Gain on Disposal of Asset
800	Interest Expense
850	Loss on Disposal of Asset
Detail for Selected Accounts
ASSETS
101	Cash
	This account is used for all cash and check transactions and includes amounts in the bank account and on hand at the store.
102	Petty Cash
	This account is used for the small petty cash fund the company has established. The petty cash fund is $100 and is maintained on the imprest basis.
115	Certificate of Deposit
	This account is used to record the company's investment in the Certificate of Deposit (CD). The company put $8,000 into the CD on February 1, 2007. The CD has a 6% annual rate of interest and an 18 month term to maturity.
120	Accounts Receivable
	This account is used to record amounts due from customers.

 

 

125	Credit Cards Receivable
	This account is used to record amounts due from the credit card processing company when a customer pays via credit card. Approximately 2-3 days after a customer pays with a credit card, cash is received into the bank account, at which time the receivable should be relieved and the receipt of the cash should be recorded. The credit card processing company charges a 2.5% fee on each transaction and deducts the fee from the amount deposited to the bank account.
130	Interest Receivable
	This account is used to record interest due to the company but not yet received.
150	Merchandise Inventory
	This account is used to record all of the store's inventory, including surfboards, accessories and apparel. All product costs, including transportation-in go into this account. The account is debited for purchases of inventory and credited following the sale of inventory. (See also: Cost of Goods Sold.)
160	Prepaid Advertising
	This account is debited when advertising costs are paid more than one month in advance. The account is adjusted at the end of each month. Advertising services for the year have been paid in advance, totaling $1,500.00.
161	Prepaid Insurance
	This account is debited when insurance premiums are paid more than one month in advance. The account is adjusted at the end of each month. Insurance premiums for the entire year totaling $1,920.00 were paid in advance in January.
162	Prepaid Rent
	This account is debited when rent is paid for a future month. The account is adjusted at the end of each month. Rent totaling $5,400.00 was paid in January for the first quarter of 2007.
170	Store Supplies
	This account is used for the purchase of all store supplies. The account is adjusted at the end of each month to reflect the amount of supplies on hand and expense the supplies that have been consumed.
180	Equipment
	This account is used to record the purchase of fixed assets. The company purchased $5,360.00 of equipment on January 1, 2007. The equipment has an expected life of 5 years. The salvage value is estimated to be $800.00.

 

 

185	Furniture & Fixtures
	This account is used to record the purchase of fixed assets. The company purchased $4,532.00 of equipment on January 1, 2007. The furniture & fixtures have an expected life of 7 years. The salvage value is estimated to be $500.00.
LIABILITIES
210	Dividends Payable
	This account is used for dividends that are declared but not yet paid to stockholders.
240	Sales Tax Payable
	This account is credited for sales tax collected from customers on all merchandise sales (surfboards, accessories and apparel). The sales tax rate is 7.75%. Sales tax is not charged for repair services or lessons. Sales tax remains payable until remitted to the State Board of Equalization at a later date.
260	Unearned Revenue
	This account is used record payments from customers for lessons before revenue has been earned. When the revenue is earned, it should be debited from this account and recognized in the appropriate revenue account.
280	Notes Payable
	This account is used to record amounts borrowed from the bank and other sources of financing from creditors. The company borrowed $30,000.00 at 8.5% from Central Coast Credit Union on January 1, 2007.
REVENUE
401	Sales Revenue
	This account is used to record the sale of merchandise (surfboards, accessories or apparel) to customers.
410	Lesson Revenue
	This account is used to record revenue from teaching surfing lessons. Customers are charged a rate of $50.00 per hour for lessons. Customers can pay in advance for 10 hours of lessons for only $450.00. Revenue should not be recognized until it is earned.
420	Repair Revenue
	This account is used to record revenue from surfboard repairs.

 

 

COST OF GOODS SOLD
501	Cost of Goods Sold
	This account is debited for the cost of merchandise sold. All merchandise is sold at a 100% mark-up over its cost. Each merchandise sales transaction should be followed by an entry debiting this account and crediting Merchandise Inventory.
EXPENSES
601	Advertising Expense
	This account is used for advertising expenses incurred in the current month. Advertising costs paid in advance should be debited to Prepaid Advertising.
607	Cash Over / Short
	This account is used for small, immaterial discrepancies, usually arising in relation to petty cash transactions.
610	Credit Card Processing Expense
	This account is used to record fees related to accepting payment from customers via credit card. The credit card processing company charges a 2.5% processing fee on each transaction, which is deducted from the amount deposited to the bank account. There is an additional monthly fee that gets recorded at the end of the month from data on the bank statement.
612	Delivery Expense
	This account is used to record costs incurred when shipping merchandise to customers. This could also be called "transportation-out."
615	Depreciation Expense, Equipment
	This account is used to record depreciation adjustments. Depreciation expense is calculated using the straight-line method and is recorded monthly.
616	Depreciation Expense, Furniture & Fixtures
	This account is used to record depreciation adjustments. Depreciation expense is calculated using the straight-line method and is recorded monthly.
620	Insurance Expense
	This account is used to record adjustments for insurance expiring in the current month. Insurance premiums paid in advance should be debited to Prepaid Insurance.
630	Rent Expense
	This account is used for rent in the current month. Rent paid in advance should be debited to Prepaid Rent.

 

 

 

 

Accounting Methods

Accrual Basis

The company uses the accrual basis of accounting. Adjusting entries are made monthly in order to recognize revenues and expenses in the appropriate month.

Depreciation

The company depreciates assets using straight-line depreciation. Depreciation is recorded monthly.

Inventory

The company uses the perpetual inventory method, updating the Merchandise Inventory and Cost of Goods Sold accounts after each sales transaction. Inventory is sold at a 100% mark- up over its cost. Each merchandise sales transaction should be followed by an entry debiting Cost of Goods Sold and crediting Merchandise Inventory (for 50% of the amount of the sale).

Purchase Discounts

The company uses the gross method to record purchase discounts, meaning that it records inventory purchases at the gross price (list price). If the company does not make payment to the vendor in time to receive the discount, there is no additional entry or calculation necessary. However, if the company makes payment within the discount period, the Inventory and Accounts Payable accounts each should be reduced for the amount of the discount.

Returns & Allowances

The company does allow sales returns on occasion. Sales returns are debited from the related sales account directly and Sales Tax Payable gets adjusted. The merchandise then needs to be received back into inventory and removed from Cost of Good Sold (as it is no longer sold!). Just as there are two journal entries necessary when recording the sale of merchandise, there will be two entries needed to reverse the sale.

 

 

Champion Wave Surf, Inc.
Set-up & Instructions
1. Open your browser and go to www.waveapps.com. In the middle of the page you will see a “Start Now” button. This will take you into the registration and download process. 2. On the opening page you will be asked to give your name, business name, and what your business does. Your business is Champion Wave, Inc and it is a retailer. 3. Choose “Manage your accounting”. 4. You currently do your accounting manually, on your own, don’t need to run payroll, you are a Sole Proprietor. 5. At this point choose “Manage Transactions” and you are ready to start. 6. You may have to add an account or two as you go. To do this: a. Click on Accounting>Chart of Accounts b. Select “Add A New Account” in the upper right corner c. Fill out the information and click “Save”

 

 

Data Entry

In Wave Accounting, you will only be entering General Journal Entries (called “transactions” in Wave) to post data. While there are other methods of entry in the software, the purpose of your accounting internship with Champion Wave Surf, Inc. is to demonstrate your knowledge of accounting, which is best done through posting journal entries for each transaction and adjustment.

1) To begin, with the company file open, click on “Accounting” from the menu bar down the left side of the screen, then select "Transactions." This will open the transactions screen that will show all of the transactions that have been entered. 2) In the upper right-hand corner click on “More”, then “Add journal transaction”. Use the tab key to move from field to field. 3) A window will open on the right enter a brief description including the number in BOLD included in the instructions, then the date. 4) Next are two fields for the debits/credits of the transaction. Each description field has a drop-down menu in order to enter the appropriate account. If you enter the first few letters of the account you want, it will show in the window. Tab to enter the amount of the debit. Tab again for the credit. If you have more than one debit or credit, there are two buttons below the transactions, one to add a debit another for a credit. Add as many as you need. In the description field enter a simple description of the reason for the entry. When all is good, click on save and move to your next entry. 5) The first entries are the ending balances for February 28, 2007. You will find these on the next page. 6) Next, enter the adjustment for March 17, 2007 Which follows the previous entry. You now have a tied-out balance through March 17th. Your job is to enter the remaining entries for the third and fourth weeks. 7) If a transaction refers to a prior entry from week one or two, you will have to look in the instructions, find the entry, and calculate the data you need for the transaction. There aren’t many, thankfully. 8) You are now ready to begin the week three transactions.

Corrections   1) Begin by identifying the journal entry that needs to be corrected. You will need to completely reverse that entry, so you may want to write down or print out the details of the transaction (account(s) debited / credited and respective amounts). 2) Start a new journal entry and post the "reversal" of your incorrect entry. Using the date of the original entry, you will debit the account(s) you originally credited and credit the account(s) you originally debited. You should include "Reversal of ERROR" in the memo field. 3) Start another new journal entry and post the transaction correctly, following the procedures for data entry.   If you use delete, I will be able to see that when I review your G/L, so please follow the above instructions.

 

 

 

 

 

13

 

Champion Wave Surf, Inc.			9:40 PM
Trial Balance			08/03/2013
As of February 28, 2007			Accrual Basis
Feb 28, 07
	Debit		Credit
101 · Cash	15,613.29
102 · Petty Cash	100.00
115 · Certificate of Deposit	8,000.00
120 · Accounts Receivable	795.00
125 · Credit Cards Receivable	483.25
130 · Interest Receivable	40.00
150 · Merchandise Inventory	13,452.08
160 · Prepaid Advertising	1,250.00
161 · Prepaid Insurance	1,600.00
162 · Prepaid Rent	1,800.00
170 · Store Supplies	877.53
180 · Equipment	5,360.00
181 · Accum. Depreciation-Equipment			152.00
185 · Furniture & Fixtures	4,532.00
186 · Accum. Depreciation-Furn & Fix			96.00
201 · Accounts Payable			991.90
220 · Interest Payable			425.00
240 · Sales Tax Payable			2,476.31
250 · Wages Payable			240.00
260 · Unearned Revenue			1,215.00
280 · Notes Payable			30,000.00
310 · Common Stock			10,000.00
401 · Sales Revenue			31,943.54
410 · Lesson Revenue			2,185.00
420 · Repair Revenue			935.00
501 · Cost of Goods Sold	15,972.67
601 · Advertising Expense	250.00
605 · Bank Charges	36.00
607 · Cash Over / Short	9.85
610 · Credit Card Processing Expense	587.60
612 · Delivery Expense	132.00
615 · Depreciation Expense-Equipment	152.00
616 · Depreciation Expense-Furn & Fix	96.00
620 · Insurance Expense	320.00
625 · Professional Fees	849.00
630 · Rent Expense	3,600.00
635 · Repairs & Maintenance	485.19
650 · Salaries & Wages Expense	3,040.00
660 · Store Supplies Expense	447.92
665 · Telephone Expense	173.15
667 · Utilities Expense	220.22
700 · Interest Income			40.00
800 · Interest Expense	425.00
TOTAL	80,699.75		80,699.75

 

 

 

 

 

 

 

 

 

Adjusting Entries for March 17, 2007

 

Account Debit Credit

 

Cash 2,507.51

Petty Cash 0.00

Certificate of Deposit 0.00

Accounts Receivable 87.50

Credit Cards Receivable 33.25

Interest Receivable 0.00

Merchandise Inventory 959.39

Prepaid Advertising 0.00

Prepaid Insurance 0.00

Prepaid Rent 0.00

Store Supplies 293.15

Equipment 0.00

Accumulated Depreciation - Equipment 0.00

Furniture and Fixtures 0.00

Accumulated Depreciation - F & F 0.00

Accounts Payable 1,125.65

Dividends Payable 4,000.00

Interest Payable 0.00

Sales Tax Payable 305.71

Wages Payable 240.00

Unearned Revenue 630.00

Notes Payable 0.00

Common Stock 0.00

Dividends 4,000.00

Sales Revenue 3,944.74

Lesson Revenue 770.00

Repair Revenue 157.50

Cost of Goods Sold 1,972.37

Advertising Expense 0.00

Bank Charges 0.00

Cash Over/Short 1.25

Credit Card Processing Expense 79.45

Delivery Expense 0.00

Depreciation Expense - Equipment 0.00

Depreciation Expense F&F 0.00

Insurance Expense 0.00

Professional Fees 270.00

Rent Expense 0.00

Repairs & Maintenance Expense 55.00

Salaries & Wages Expense 560.00

Store Supplies Expense 0.00

Telephone Expense 118.73

Utilities Expense 0.00

Interest income 0.00

Interest Expense 0.00

Loss on Disposal of Asset 0.00 0.00

 

$11,055.60 $11,055.60

 

 

 

 

Champion Wave Surf, Inc.
Week of March 4 - 10, 2007
Transactions
1	March 4, 2007
Sold surfboard and apparel to customer for $435.00 plus sales tax (7.75%). The customer paid cash. The sales receipt number was 7030401.
	a)	101 · Cash	468.71
		401 · Sales Revenue	435.00
		240 · Sales Tax Payable	33.71
		Sold merchandise to customer for cash.
	b)	501 · Cost of Goods Sold	217.50
		150 · Merchandise Inventory	217.50
To record cost of merchandise sold and relieve inventory
This transaction is already posted as an example. You can view the two journal entries posted by opening the General Journal Entries window, and clicking the "Previous" arrow to find the entries. Do not post the entries again.
2	March 4, 2007
Received cash into the bank account from the credit card processing company for a transaction of $483.25 processed on February 28, 2007, sales receipt number 7022805.
		101 · Cash	471.17
		610 · Credit Card Processing Expense	12.08
		125 · Credit Cards Receivable	483.25
Received payment from credit card processing company, less fees.
This transaction has not been posted yet.
3	March 4, 2007
	Sold apparel to customer for $75.00 plus sales tax. The customer paid cash. The sales receipt number was 7030402.
		101 · Cash	80.81
		401 · Sales Revenue	75.00
		240 · Sales Tax Payable	5.81
		501 · Cost of Goods Sold	37.50
		150 · Merchandise Inventory	37.50

 

 

Week of March 4 - 10, 2007

 

 

 

 

 

 

 

4	March 4, 2007
Sold apparel to customer for $279.50 plus sales tax. The customer paid with a credit card. The sales receipt number was 7030403.
	125 · Credit Cards Receivable	301.16
	401 · Sales Revenue	279.50
	240 · Sales Tax Payable	21.66
	501 · Cost of Goods Sold	139.75
	150 · Merchandise Inventory	139.75
5	March 5, 2007
Wrote check number 10026 to Pacific Gas & Electric for $68.30 to pay the utilities bill received and posted last month.
	201 · Accounts Payable	68.30
	101 · Cash	68.30
6	March 5, 2007
Wrote check number 10027 to AT&T for $118.73 for the telephone bill received in the mail today.
	665 · Telephone Expense	118.73
	101 · Cash	118.73
7	March 5, 2007
Sold accessories and apparel to customer for $338.98 plus sales tax. The customer paid cash. The sales receipt number was 7030501.
	101 · Cash	365.25
	401 · Sales Revenue	338.98
	240 · Sales Tax Payable	26.27
	501 · Cost of Goods Sold	169.49
	150 · Merchandise Inventory	169.49
8	March 6, 2007
	Received cash into the bank account from the credit card processing company for sales receipt number 7030403, processed on March 4, 2007.
	101 · Cash	293.63
	610 · Credit Card Processing Expense	7.53
	125 · Credit Cards Receivable	301.16

 

 

 

 

9	March 6, 2007
Performed repairs on a surfboard and mailed invoice number 30601 for $157.50 to customer Brett Constance to bill for the services.
	120 · Accounts Receivable	157.50
	420 · Repair Revenue	157.50
10	March 6, 2007
Wrote check number 10028 to Surfer's Supply for payment in full on an invoice for merchandise received and posted last month. The original amount of the invoice was 463.89. The invoice was dated February 27, 2007, with terms of the purchase 1/10, n/30. The invoice was recorded using the gross method.
	201 · Accounts Payable	463.89
	101 · Cash	459.25
	150 · Merchandise Inventory	4.64
11	March 6, 2007
Wrote check number 10029 to Pipeline Surfwear for payment in full on an invoice received last month. The original amount of the invoice was $285.71. The invoice was dated February 7, 2007, with terms of the purchase 2/10, n/20. The invoice was recorded using the gross method.
	201 · Accounts Payable	285.71
	101 · Cash	285.71
12	March 7, 2007
Received cash payment of $175.00 from customer Ken Bruce for surfing lessons taught last month. The customer was billed in February with invoice number 22802, for 3.5 hours of lessons.
	101 · Cash	175.00
	120 · Accounts Receivable	175.00
13	March 7, 2007
Received cash payment from customer Bobby Earl for $450.00 in advance for 10 hours of surfing lessons. Bobby will begin taking lessons in April. Gave Bobby receipt number 30701 for record of his payment.
	101 · Cash	450.00
	260 · Unearned Revenue	450.00
14	March 8, 2007
	Taught a 1 hour surfing lesson. Provided receipt number 30801 for the customer, Budd Charles, who paid cash at the time of the lesson.
	101 · Cash	50.00
	410 · Lesson Revenue	50.00

 

 

 

 

15	March 8, 2007
Purchased surfboards and accessories from vendor for $1,050.00. Paid cash at the time of purchase for invoice number CCB1298.
	150 · Merchandise Inventory	1,050.00
	101 · Cash	1,050.00
16	March 9, 2007
Sold apparel to customer for $252.26 plus sales tax. The customer paid with a credit card. The sales receipt number was 7030901.
	125 · Credit Cards Receivable	271.81
	401 · Sales Revenue	252.26
	240 · Sales Tax Payable	19.55
	501 · Cost of Goods Sold	126.13
	150 · Merchandise Inventory	126.13
17	March 9, 2007
Purchased $194.65 of store supplies on account from Premier Distributing. The invoice number was PD897 and the terms were Net 15.
	170 · Store Supplies	194.65
	201 · Accounts Payable	194.65
18	March 10, 2007
Taught a 4 hour surfing lesson to Madeline Taylor. Prepared invoice number 31001. She will pay later.
	120 · Accounts Receivable	200.00
	410 · Lesson Revenue	200.00
19	March 10, 2007
Sold 3 surfboards and accessories for $1,132.50 plus tax. The customer paid with a credit card. The sales receipt number was 7031001.
	125 · Credit Cards Receivable	1,220.27
	401 · Sales Revenue	1,132.50
	240 · Sales Tax Payable	87.77
	501 · Cost of Goods Sold	566.25
	150 · Merchandise Inventory	566.25
20	March 10, 2007
	After two months of successful operations, the board of directors met and declared $4,000 of dividends, which would be paid to the stockholders at the end of the month. Ref: Div 3/10/07
	390 · Dividends	4,000.00
	210 · Dividends Payable	4,000.00

 

 

 

 

 

 

Check Figures
Selected figures from the trial balance as of March 10, 2007 are below. If your account balances do not match the check figures provided, you need to correct your errors before proceeding. Be sure to carefully review the instructions for correcting errors.
Champion Wave Surf, Inc.
SELECTED Check Figures
As of March 10, 2007
Mar 10, 07
	Debit		Credit
101 · Cash	15,985.87
120 · Accounts Receivable	977.50
125 · Credit Cards Receivable	1,492.08
150 · Merchandise Inventory	13,240.82
170 · Store Supplies	1,072.18
201 · Accounts Payable			368.65
240 · Sales Tax Payable			2,671.08
390 · Dividends	4,000.00
401 · Sales Revenue			34,456.78
410 · Lesson Revenue			2,435.00
420 · Repair Revenue			1,092.50
501 · Cost of Goods Sold	17,229.29
610 · Credit Card Processing Expense	607.21
660 · Store Supplies Expense	447.92
665 · Telephone Expense	291.88
667 · Utilities Expense	220.22
800 · Interest Expense	425.00
TRIAL BALANCE TOTAL	87,642.01		87,642.01
Assignment
After posting all of the transactions and ensuring your trial balance matches the check figures provided, print the trial balance as of March 10, 2007, as well as the journal for March 4 - 10, 2007. These reports can be found by selecting "Reports" from the menu bar across the top, then choosing "Accountant & Taxes." The Trial Balance and Journal can both be found here. Be sure to adjust the dates in each report to reflect the transactions in Week #1, March 4 - 10, 2007.

 

 

 

 

Champion Wave Surf, Inc.
Week of March 11 - 17, 2007
Transactions
1	March 11, 2007
Received cash into the bank account from the credit card processing company for sales receipt number 7030901, processed on March 9, 2007.
	101 · Cash	265.01
	610 · Credit Card Processing Expense	6.80
	125 · Credit Cards Receivable	271.81
2	March 11, 2007
Purchased merchandise on account from Central Coast Boarding. Central Coast Boarding provided invoice number CCB1335 totaling $1,648.50. Terms of the purchase are 2/10, n/30.
	150 · Merchandise Inventory	1,648.50
	201 · Accounts Payable	1,648.50
3	March 11, 2007
Wrote check number 10030 for $174.00 to pay the February bill from Law Office of C. Brown for services provided on account.
	201 · Accounts Payable	174.00
	101 · Cash	174.00
4	March 12, 2007
Taught 6 hours of surfing lessons to a customer who had paid in advance during February (sales receipt number 21402) at the special discounted rate of $45 per hour.
	260 · Unearned Revenue	270.00
	410 · Lesson Revenue	270.00
5	March 12, 2007
	Received cash into the bank account from the credit card processing company for sales receipt number 7031001, processed on March 10, 2007.
	101 · Cash	1,189.76
	610 · Credit Card Processing Expense	30.51
	125 · Credit Cards Receivable	1,220.27

 

 

Week of March 11 - 17, 2007

 

 

16

 

 

6	March 12, 2007
Received payment of $145.00 on invoice number 7022403 from customer Mike Joseph for repair services performed on account during February.
	101 · Cash	145.00
	120 · Accounts Receivable	145.00
7	March 13, 2007
Returned $500 of damaged merchandise from the purchase on March 11, 2007 to Central Coast Boarding, invoice number CCB1335.
	201 · Accounts Payable	500.00
	150 · Merchandise Inventory	500.00
8	March 14, 2007
Sold apparel and accessories to customer for $595.00 plus sales tax. The customer paid with cash. The sales receipt number was 7031401.
	101 · Cash	641.11
	401 · Sales Revenue	595.00
	240 · Sales Tax Payable	46.11
	501 · Cost of Goods Sold	297.50
	150 · Merchandise Inventory	297.50
9	March 14, 2007
Sold surfboards to customer for $836.50 plus sales tax. The customer paid with a credit card. The sales receipt number was 7031402.
	125 · Credit Cards Receivable	901.33
	401 · Sales Revenue	836.50
	240 · Sales Tax Payable	64.83
	501 · Cost of Goods Sold	418.25
	150 · Merchandise Inventory	418.25
10	March 15, 2007
	Taught 5 hours of surfing lessons on account for customer Jonathon Richards. Provided the customer with invoice number 31501 for the services.
	120 · Accounts Receivable	250.00
	410 · Lesson Revenue	250.00

 

 

 

 

11	March 15, 2007
Received payment in full on invoice number 31001 from Madeline Taylor.
	101 · Cash	200.00
	120 · Accounts Receivable	200.00
12	March 15, 2007
Received partial payment of $175.00 on invoice 21703 from customer David Linthon for services provided on account during February.
	101 · Cash	175.00
	120 · Accounts Receivable	175.00
13	March 16, 2007
Received cash into the bank account from the credit card processing company for sales receipt number 7031402, processed on March 14, 2007.
	101 · Cash	878.80
	610 · Credit Card Processing Expense	22.53
	125 · Credit Cards Receivable	901.33
14	March 16, 2007
Customer, Allison Paige, paid $450.00 with a credit card for 10 hours of surfing lessons to begin during the summer. Provided the customer with receipt number 31601.
	125 · Credit Cards Receivable	450.00
	260 · Unearned Revenue	450.00
15	March 16, 2007
Wrote check number 10031 for $235.00 to Scanlan Accounting Services for accounting services provided today.
	625 · Professional Fees	235.00
	101 · Cash	235.00
16	March 16, 2007
	Wrote check number 10032 to pay two weeks of wages to the store clerk, totaling $800.00 for the time period 2/26 - 3/11. The store clerk works Monday through Friday and gets paid $80.00 per day. Three days of wages were accrued at the end of February.
	650 · Salaries & Wages Expense	560.00
	250 · Wages Payable	240.00
	101 · Cash	800.00

 

 

 

 

17	March 16, 2007
Purchased additional inventory from Surfer's Supply on account. Surfer's Supply provided invoice number SS9241 totaling $675.90 with terms 1/10, n/30. The merchandise was sent FOB shipping point. The responsible party will pay SLO Delivery & Trucking for delivery services directly.
	150 · Merchandise Inventory	675.90
	201 · Accounts Payable	675.90
18	March 17, 2007
Merchandise purchased from Surfer's Supply yesterday arrived. The responsible party paid $62.00 cash to SLO Delivery & Trucking for shipment number SLO3846.
	150 · Merchandise Inventory	62.00
	101 · Cash	62.00
19	March 17, 2007
Purchased $98.50 of store supplies on account from Premier Distributing. The invoice number was PD938 and the terms were Net 15, FOB Destination. The responsible party paid $25.00 cash to SLO Delivery & Trucking.
	170 · Store Supplies	98.50
	201 · Accounts Payable	98.50
20	March 17, 2007
	Replenished the petty cash fund by writing check number 10033 for $88.75. The petty cash box contained two receipts as follows: Repairs & Maintenance $55.00 and Professional Fees $35.00.
	635 · Repairs & Maintenance	55.00
	625 · Professional Fees	35.00
	101 · Cash	88.75
	607 · Cash Over / Short	1.25

 

 

 

 

 

 

Check Figures
Selected figures from the trial balance as of March 17, 2007 are below. If your account balances do not match the check figures provided, you need to correct your errors before proceeding. Be sure to carefully review the instructions for correcting errors.
Champion Wave Surf, Inc.
SELECTED Check Figures
As of March 17, 2007
Mar 17, 07
	Debit		Credit
101 · Cash	XX,120.80
120 · Accounts Receivable	707.50
125 · Credit Cards Receivable	450.00
150 · Merchandise Inventory	14,411.47
170 · Store Supplies	1,170.68
201 · Accounts Payable			2,117.55
240 · Sales Tax Payable			2,782.02
390 · Dividends	4,000.00
401 · Sales Revenue			35,888.28
410 · Lesson Revenue			2,955.00
420 · Repair Revenue			1,092.50
501 · Cost of Goods Sold	17,945.04
610 · Credit Card Processing Expense	667.05
TRIAL BALANCE TOTAL	XX,393.35		XX,393.35
Assignment
After posting all of the transactions and ensuring your trial balance matches the check figures provided, print the trial balance as of March 17, 2007, as well as the journal for March 11 - 17, 2007.

 

 

 

 

Champion Wave Surf, Inc.
Mid-Month Review
In order to answer the following questions, you may find it helpful to view the interim financials statements. These reports can be found by selecting "Reports" from the menu bar across the top, then choosing "Company & Financial." For the Income Statement, select "Profit & Loss Standard" and be sure to adjust the dates appropriately (March 1 - 17, 2007). For the Balance Sheet, select "Balance Sheet Standard" and, again, be sure to use the appropriate date (March 17, 2007).
1	What is net income for March 1 - March 17, 2007?
	1,817.94
2	What is net income year-to-date (January 1 - March 17, 2007)?
	10,124.88
3	What is the cash balance as of March 17, 2007?
	18,120.80
4	What is the accounts receivable balance as of March 17, 2007?
	707.50
5	Numerically express the accounting equation as of March 17, 2007.
	$57,294.45 = $41,169.57 + $16,124.88

 

 

Mid-Month Review

 

 

 

 

 

 

 

 

 

6	What is the trial balance total as of March 17, 2007?
		91,393.35
7	What is the current ratio as of March 17, 2007?
	17-Mar	47,650.45 / 11,169.57 = 4.266
8	How has the current ratio changed since February 28, 2007? What does this mean?
	28-Feb	44,011.15 / 5,348.21 = 8.229
The ratio was higher at 2/28 than at 3/17. The higher the ratio, the easier the company can pay its maturing debts. Liquidity has decreased dramatically, but is still very healthy.
9	What is the debt to assets ratio as of March 17, 2007?
	17-Mar	41,169.57 / 57,294.45 = .719
10	How has the debt to assets ratio changed since February 28, 2007? What does this mean?
	28-Feb	35,348.21 / 53,655.15 = .659
	The ratio was lower at 2/28 than at 3/17. The higher the ratio, the greater the financial risk, so risk has increased slightly.

 

 

Champion Wave Surf, Inc.	10:04 PM
Profit & Loss	08/03/2013
March 1 - 17, 2007	Accrual Basis
	Mar 1 - 17, 07
Ordinary Income/Expense
Income
401 · Sales Revenue	3,944.74
410 · Lesson Revenue	770.00
420 · Repair Revenue	157.50
Total Income	4,872.24
Cost of Goods Sold
501 · Cost of Goods Sold	1,972.37
Total COGS	1,972.37
Gross Profit	2,899.87
Expense
607 · Cash Over / Short	-1.25
610 · Credit Card Processing Expense	79.45
625 · Professional Fees	270.00
635 · Repairs & Maintenance	55.00
650 · Salaries & Wages Expense	560.00
665 · Telephone Expense	118.73
Total Expense	1,081.93
Net Ordinary Income	1,817.94
Net Income	1,817.94

 

 

 

 

 

Champion Wave Surf, Inc.	11:14 PM
Balance Sheet	08/03/2013
As of March 17, 2007	Accrual Basis
	Mar 17, 07
ASSETS
Current Assets
Checking/Savings
101 · Cash	18,120.80
102 · Petty Cash	100.00
115 · Certificate of Deposit	8,000.00
Total Checking/Savings	26,220.80
Accounts Receivable
120 · Accounts Receivable	707.50
Total Accounts Receivable	707.50
Other Current Assets
125 · Credit Cards Receivable	450.00
130 · Interest Receivable	40.00
150 · Merchandise Inventory	14,411.47
160 · Prepaid Advertising	1,250.00
161 · Prepaid Insurance	1,600.00
162 · Prepaid Rent	1,800.00
170 · Store Supplies	1,170.68
Total Other Current Assets	20,722.15
Total Current Assets	47,650.45
Fixed Assets
180 · Equipment	5,360.00
181 · Accum. Depreciation-Equipment	-152.00
185 · Furniture & Fixtures	4,532.00
186 · Accum. Depreciation-Furn & Fix	-96.00
Total Fixed Assets	9,644.00
TOTAL ASSETS	57,294.45
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
201 · Accounts Payable	2,117.55
Total Accounts Payable	2,117.55
Other Current Liabilities
210 · Dividends Payable	4,000.00
220 · Interest Payable	425.00
240 · Sales Tax Payable	2,782.02
260 · Unearned Revenue	1,845.00
Total Other Current Liabilities	9,052.02
Total Current Liabilities	11,169.57
Long Term Liabilities

 

 

 

 

 

 

	Mar 17, 07
280 · Notes Payable	30,000.00
Total Long Term Liabilities	30,000.00
Total Liabilities	41,169.57
Equity
310 · Common Stock	10,000.00
390 · Dividends	-4,000.00
Net Income	10,124.88
Total Equity	16,124.88
TOTAL LIABILITIES & EQUITY	57,294.45

 

 

 

 

 

 

 

Champion Wave Surf, Inc.
Week of March 18 - 24, 2007
Transactions
1	March 18, 2007
The customer who purchased surfboards on March 14, 2007, returned one surfboard with a list price of $425.00. The customer received the refund in cash and was provided receipt number 31801 for the transaction.
2	March 18, 2007
Sold apparel to customer for $198.24 plus sales tax. The customer paid cash. The sales receipt number was 7031802.
3	March 18, 2007
Received cash into the bank account from the credit card processing company for receipt number 31601, processed on March 16, 2007.
4	March 19, 2007
	Customer, Budd Charles, brought his surfboard in for repairs. Repairs were completed and the customer was given invoice number 31901 for $119.00.

 

 

Week of March 18 - 24, 2007

 

 

 

 

 

5	March 19, 2007
Collected $225.00 from customer, Betty Jane, who was invoiced in February for lessons taught, invoice number 21703.
6	March 19, 2007
Taught a 3 hour surfing lesson for cash. Provided the customer with receipt number 31902.
7	March 20, 2007
Sold 3 surfboards and accessories to customer for $1,649.50 plus sales tax. The customer paid cash. The sales receipt number was 7032001. Shipped the merchandise to the customer's home address, FOB destination. An invoice for shipping costs will be sent to the responsible party.
8	March 20, 2007
Taught 4.5 hours of surfing lessons to a customer who had paid in advance during February (receipt number 20703) at the special discounted rate.
9	March 20, 2007
	Received cash payment from customer, Brett Constance, referencing invoice number 30601.

 

 

 

 

10	March 21, 2007
Sold accessories to customer for $319.28 plus sales tax. The customer paid with a credit card. The sales receipt number was 7032101.
11	March 21, 2007
Received an invoice for $209.00 from the landlord, Coastal Properties, Inc., for repairs made in the store. The invoice number was CP200768, net 10.
12	March 21, 2007
Purchased merchandise from Pipeline Surfwear for $795.00, invoice number PS40627. The merchandise was delivered FOB shipping point at a cost of $45.00. All amounts due were paid in cash at the time of delivery.
13	March 22, 2007
Taught a 2 hour surfing lesson to customer David Linthon, who paid cash for the lesson, plus paid off the $75.00 balance he owed from an invoice in February. Provided the customer with receipt number 32201 for the payment.
14	March 22, 2007
	Wrote check number 10034 to Premier Distributing to pay the open invoices from March 9 and March 17, 2007 in full.

 

 

 

 

15	March 23, 2007
Paid Surfer's Supply the amount due on invoice number SS9241 dated March 16, 2007.
16	March 23, 2007
Paid Central Coast Boarding the amount due on invoice number CCB1335 dated March 11, 2007.
17	March 23, 2007
Wrote check number 10035 to Law Office of C. Brown for $165.00 to pay for a legal consultation that day.
18	March 24, 2007
Wrote check number 10036 to pay the bill received from the landlord on March 21, 2007.
19	March 24, 2007
Wrote check number 10037 for $5,400.00 to pay rent for the second quarter (April, May & June 2007).
20	March 24, 2007
	Repaired surfboard for customer Chris Jackson. Provided customer with invoice number 32401 for $95.00.

 

 

 

 

 

 

Check Figures
Selected figures from the trial balance as of March 24, 2007 are below. If your account balances do not match the check figures provided, you need to correct your errors before proceeding. Be sure to carefully review the instructions for correcting errors.
Champion Wave Surf, Inc.
SELECTED Check Figures
As of March 24, 2007
Mar 24, 07
	Debit		Credit
101 · Cash	12,052.26
120 · Accounts Receivable	464.00
125 · Credit Cards Receivable	344.02
150 · Merchandise Inventory	14,373.70
201 · Accounts Payable			0.00
240 · Sales Tax Payable			2,917.02
401 · Sales Revenue			37,630.30
410 · Lesson Revenue			3,407.50
420 · Repair Revenue			1,306.50
501 · Cost of Goods Sold	18,816.05
610 · Credit Card Processing Expense	678.30
TRIAL BALANCE TOTAL	91,616.82		91,616.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Champion Wave Surf, Inc.
Week of March 25 - 31, 2007
Transactions
1	March 25, 2007
Received cash into the bank account from the credit card processing company for sales receipt number 7032101, processed on March 21, 2007.
2	March 25, 2007
Received invoice number SLO3953 from SLO Delivery & Shipping for $79.00 referencing sales receipt 7032001 from March 20, 2007. Terms are Net 10.
3	March 25, 2007
The customer who purchased accessories on March 21, 2007, returned one item with a list price of $38.00. The customer received the refund in cash and was provided receipt number 32501 for the transaction.
4	March 26, 2007
	Sold a surfboard and accessories to customer Neal Kelly for $512.92 plus sales tax. Neal also paid for ten hours of lessons in advance. The customer paid for the entire purchase with a credit card and was provided sales receipt number 7032601.

 

 

 

 

 

5	March 26, 2007
Repaired surfboard for customer Bobby Earl. Provided invoice number 32602 to Bobby for $72.00 to be paid later.
6	March 26, 2007
Received payment in full from customer Jonathon Richards referencing invoice number 31501.
7	March 27, 2007
Received invoice number PG4660998 from Pacific Gas & Electric for $127.32 and will pay later.
8	March 27, 2007
Sold surfboard to customer for $488.00 plus sales tax. The customer paid for the purchase with a credit card and was provided sales receipt number 7032701.
9	March 27, 2007
	Shipped the merchandise from sales receipt number 7032701 to the customer's address at a cost of $65.00. The shipping terms were FOB destination. The responsible party paid cash to the shipping company directly.

 

 

 

 

10	March 28, 2007
Purchased merchandise from Pipeline Surfwear on account. The vendor provided invoice number PS2015 for $1,138.00 with terms 2/15, n/25. The merchandise was shipped FOB destination and the responsible party paid the shipping costs of $95.00 in cash.
11	March 28, 2007
Mr. Kolbe decided to get additional insurance coverage to provide more protection relating to the risk of shark bites while teaching surfing lessons. Received invoice number F9111 from Farmtown Insurance for $630.00 for six months of coverage commencing on April 1, 2007.
12	March 28, 2007
Wrote check number 10038 to pay SLO Delivery & Shipping in full for invoice number SLO3953.
13	March 28, 2007
Received cash into the bank account from the credit card processing company for sales receipt number 7032601, processed on March 26, 2007.
14	March 29, 2007
Received check for $119.00 from customer Budd Charles referencing invoice number 31901.
15	March 29, 2007
	Taught 3 hours of lessons to Neal Kelly (sales receipt number 7032601).

 

 

 

 

16	March 29, 2007
Received cash into the bank account from the credit card processing company for sales receipt number 7032701, processed on March 27, 2007.
17	March 30, 2007
Mr. Kolbe decided to launch a new advertising campaign, hoping to boost sales for the months leading up to the summer. Received an invoice number A6390 from A-Town Advertising for $795, for advertising during April, May and June.
18	March 30, 2007
Wrote check number 10039 to pay two weeks of wages to the store clerk, totaling $800.00 for the time period 3/12 - 3/25. The store clerk works Monday through Friday and gets paid $80.00 per day.
19	March 31, 2007
Distributed cash to pay dividends declared earlier in the month to the shareholders. Ref: Div 3/10/07
20	March 31, 2007
	The company sold equipment for $350.00. The equipment orignally cost $536.00 and there is accumulated depreciation on that equipment of $22.80. Ref: S033107

 

 

 

 

 

 

Check Figures
Selected figures from the trial balance as of March 31, 2007 are below. If your account balances do not match the check figures provided, you need to correct your errors before proceeding. Be sure to carefully review the instructions for correcting errors.
Champion Wave Surf, Inc.
SELECTED Check Figures
As of March 31, 2007
Mar 31, 07
	Debit		Credit
101 · Cash	9,456.66
120 · Accounts Receivable	167.00
150 · Merchandise Inventory	15,030.24
201 · Accounts Payable			2,690.32
240 · Sales Tax Payable			2,991.64
260 · Unearned Revenue			1,957.50
401 · Sales Revenue			38,593.22
420 · Repair Revenue			1,378.50
501 · Cost of Goods Sold	19,297.51
610 · Credit Card Processing Expense	725.12
TRIAL BALANCE TOTAL	91,843.88		91,843.88
The bank statement for the month ending March 31, 2007 has just arrived. You need to reconcile the bank account (manually) in the form provided on the next page. After you complete the reconciliation prepare and enter the adjusting entries for the books (description: Bank Rec). Assume that all transactions prior to 3/18 cleared.   Central Coast Credit Union Customer Service 123 Higuera Street (805) 555-BANK San Luis Obispo, CA 93401 Statement for the Month Ending March 31, 2007               Beginning Balance 16,378.48     Account 1234567890       Deposits & Credits 10,696.12     Champion Wave, Inc       Checks & Debits (13,431.61)     123 Embarcadero Road       ENDING BALANCE 13,637.99     Morro Bay, CA 93442                   DEPOSITS                                   4-Mar 471.17   12-Mar 145.00 20-Mar 157.50     4-Mar 468.71   14-Mar 641.11 23-Mar 175.00     4-Mar 80.81   15-Mar 200.00 25-Mar 335.42     5-Mar 365.25   15-Mar 175.00 26-Mar 250.00     6-Mar 293.63   16-Mar 878.80 28-Mar 977.60     7-Mar 450.00   18–Mar 438.75 29-Mar 119.00     7-Mar 175.00   18-Mar 213.60         8-Mar 50.00   19-Mar 225.00 Interest Earned     11-Mar 265.01   19-Mar 150.00 31-Mar 27.66     12-Mar 1,189.76   20-Mar 1,777.34                                             Checks     Debits   Other Withdrawals                         10024 275.00   8-Mar 1,050.00 30-Mar 119.00 NSF   NSF 10025 485.19   17-Mar 62.00 31-Mar 12.00 Bank Svc Chg   Serv Chg 10026 68.30   18-Mar 457.94 31-Mar 75.00 C/Card Proc Fees   Credit Card Proc Fee 10027 118.73   21-Mar 840.00         10028 459.25   23-Mar 669.14         10029 285.71   23-Mar 1,148.50         10030 174.00   25-Mar 40.95         10031 235.00   27-Mar 65.00         10032 800.00               10033 88.75               10034 293.15               10036 209.00               10037 5,400.00

 

 

 

 

 

Bank Reconciliation
March 31, 2007
Balance per books:
Add:
Deduct:
Reconciled Book Balance:
Balance per bank:
Add:
Deduct:
Reconciled Bank Balance:

 

 

 

 

 

 

Champion Wave Surf, Inc.
Adjusting Entries
Prepare and post journal entries at March 31, 2007 for each of the month-end adjustments.
(All adjusting entries for January and February have been posted already.)
1	Interest Receivable	AJE #1
The company put $8,000 into the CD on February 1, 2007. The CD has a 6% annual rate of interest and an 18 month term to maturity. Interest earned during February was already posted at February 28, 2007.
2	Prepaid Advertising	AJE #2
Advertising services for the year (Jan 2007 - Dec 2007) have been paid in advance, totaling $1,500.00.
3	Prepaid Insurance	AJE #3
Insurance premiums for the entire year totaling $1,920.00 were paid in advance in January.
4	Prepaid Rent	AJE #4
Rent totaling $5,400.00 was paid in January for the first quarter of 2007.
5	Store Supplies	AJE #5
	A count of the store supplies at month-end indicated that there was $632.50 of supplies on hand.

 

 

Adjusting Entries

 

 

 

 

 

6	Depreciation - Equipment	AJE #6
The company purchased $5,360.00 of equipment on January 1, 2007. The equipment has an expected life of 5 years. The salvage value is estimated to be $800.00.
7	Depreciation - Furniture & Fixtures	AJE #7
The company purchased $4,532.00 of equipment on January 1, 2007. The furniture & fixtures have an expected life of 7 years. The salvage value is estimated to be $500.00.
8	Interest Payable	AJE #8
The company borrowed $30,000.00 at 8.5% from Central Coast Credit Union on January 1, 2007.
9	Wages Payable	AJE #9
The store clerk works Monday through Friday and gets paid $80.00 per day.
10	Inventory	AJE #10
	A count of the inventory at month-end indicated that there was $14,771.60 of merchandise on hand.

 

 

 

 

 

 

 

Check Figures
Selected figures from the adjusted trial balance as of March 31, 2007 are below. If your account balances do not match the check figures provided, you need to correct your errors before proceeding. Be sure to carefully review the instructions for correcting errors.
Champion Wave Surf, Inc.
SELECTED Check Figures
As of March 31, 2007
Mar 31, 07
	Debit		Credit
101 · Cash	X,X56.66
120 · Accounts Receivable	286.00
150 · Merchandise Inventory	14,771.60
201 · Accounts Payable			2,690.32
240 · Sales Tax Payable			2,991.64
260 · Unearned Revenue			1,957.50
401 · Sales Revenue			38,593.22
700 · Interest Income			107.66
800 · Interest Expense	637.50
TRIAL BALANCE TOTAL	XX,648.04		XX,648.04

 

 

Champion Wave Surf, Inc.
Final Review & Analysis
1	What is net income for March 1 - March 31, 2007?
2	What is net income year-to-date (January 1 - March 31, 2007)?
3	What is the cash balance as of March 31, 2007?
4	What is the accounts payable balance as of March 31, 2007?
5	Numerically express the accounting equation as of March 31, 2007.
6	Hypothetically, if the company used the allowance method for accounting for bad debts, and determined that it needed to set-up an allowance of 1/2% of total income for the quarter, what would be the net realizable value of accounts receivable?

 

 

Final Review & Analysis

 

 

 

 

 

 

 

 

7	What is the return on sales ratio for the quarter ending March 31, 2007? (Use "Total Income" as your sales figure.)
8	What is the gross margin percentage for the quarter ending March 31, 2007? (Use "Total Income" as your sales figure.)
9	What is the current ratio as of March 31, 2007? How has the current ratio changed since February 28, 2007? What does this mean?
10	Would you invest in Champion Wave Surf, Inc.? Why or why not? Be specific and analytical!

 

 

 

 

Champion Wave Surf, Inc.
Financial Statements
Now that you have posted all of the transactions for the month, reconciled the bank statement at month end and posted the adjusting journal entries, it is time to prepare the financial statements for Mr. Kolbe to review. Mr. Kolbe will want each of the following to review and discuss with you:
1	Income Statement (Profit & Loss) for March 1 - 31, 2007
2 3	Income Statement (Profit and Loss) for the quarter, January 1 – March 31, 2007 Balance Sheet as of March 31, 2007
4	Trial Balance as of March 31, 2007
	Be sure you print each of these documents before doing the closing entries!
You will find the reports by clicking on Reports> Get the Big Picture. Make sure to enter the appropriate dates for each report and click on “Export” in the upper right of the page. Combine the reports in one email to me. Then Enter your closing entries.
Closing Entries   Prepare and post the closing journal entry to close the books as of the end of the first quarter (March 31, 2007). After closing the books, print the Trial Balance as of March 31, 2007 one last time! ***Be sure that you have prepared all of your financial reports correctly and completed the Final Review questions before posting the closing entry! Hint: Use the Trial Balance as of March 31, 2007 and zero out all of the temporary accounts into Retained Earnings.