Abby's Art Mart (AAM) is a specialty retailer in Iowa City, Iowa. Abby Martin has a passion for art and art education. AAM sells art supplies of all kinds and provides art lessons to aspiring artists of all ages. AAM has three employees who are artists and highly educated in the field. However, none has accounting or bookkeeping experience. Therefore, AAM hired an accounting firm, Peterson CPA Group (Peterson), to record transactions and keep financial records. 

You are a staff accountant with Peterson. Your supervisor asked you to evaluate the supporting documents and construct an accounts payable (AP) rollforward for AAM from November 30, year 5, to December 31, year 5. The AP rollforward will provide a broad overview of the transactions with vendors during the month of December. The supporting documents include the December vendor invoices, the December bank statement, and emails describing various events that impact the vendor accounts for the month of December, year 5. The December 31, year 5, ending balance payable to vendors is $4,100. 

• In the column "Description," click on the cell and select a title from the list provided. A selection may be used once, more than once, or not at all.
• In the column "Amount," enter the dollar amount.
• If an item is not needed, then select None from the item list and enter 0 (zero) in the Amount column.

For grading purposes: 

• When entering an addition to a balance, enter the number and use comma separators but do not use dollar signs.
• When entering a subtraction, use parentheses ( ). For example, enter "(2,000)" to subtract $2,000.

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                                             A  

                                B  

 1  

Accounts Payable Rollforward

 2  

November 30, Year 5 to December 31, Year 5

 3  

                               Description

                        Amount

 4  

Accounts Payable Balance November 30, year 5

                        $

 5  

Options

• Add vendor credit memos
• Add vendor invoices
• Deduct sales invoices
• Add sales invoices
• Add vendor discounts
• None

                          $

 6  

Options

• Deduct mortgage payment
• Add discounts
• Deduct utility payments
• Deduct vendor payments
• Add credit memos
• None

                       $

 7  

Options

• Add vendor invoice not received
• Deduct accrued interest
• Add discounts
• Deduct vendor invoice not received
• Add invoices not accrued
• None

                       $

 8  

Options

• Add discounts
• Deduct sales invoices
• Add vendor credit memos
• Add prepayments
• Deduct vendor credit memos
• None

                       $

 9  

Options

• Deduct accrued expenses
• Deduct sales invoices
• Add invoices not accrued
• Deduct prepayments
• None

                         $

 10  

Accounts Payable Balance December 31, year 5

                         $

 

Exhibit 1: November 30, Year 5 Accounts Payable by Customer Subledger Detail

 

Abby's Art Mart Accounts Payable Vendor Subledger for the period November 1, Year 5, to November 30, Year 5
Account	520	Office Supplies, Inc.
Date	Trans	Description	Beginning Balance	Purchase	Payment/ Return	Ending Balance
11/01 year 5	Balance		325
11/06 year5	CK1425	Payment			(325)	0
11/13 year 5	INV6330	Paper		120		120
11/30 year 5	Balance					120
Account	521	Bob's Paint& More
11/01/year 5	Balance		0
11/15/year 5	INV86438	Oil, watercolor		920		920
11/18 year 5	INV86445	Acrylic paint		425		1,345
11/30/year 5	Balance					1,345
Account	522	B&L Art Supply Co.
11/01/year 5	Balance		2,120
11/19/year 5	INV0052	Pencils, etc.		550		2,670
11/22/year 5	CK1430	Payment			(2,120)	550
11/30/year 5	Balance					550
Account	523	Art Paper Supply
11/01/year 5	Balance		0
11/29/year 5	INV7855	Sketch pads		420		420
11/30/year 5	Balance					420
Account	524	Sculpture Supply
11/01/year 5	Balance		600
11/07/year 5	CK1427	Payment			(600)	0
11/15/year 5	INV3-4-4	Clay and tools	525			525
11/30/year 5	Balance					525
Account	526	Tony's Cleaning Service
11/01/year 5	Balance		440
11/05/year 5	CK1424	October			(440)	0
11/12/year 5	CK1428	October			(440)	(440)
11/30/year 5	Balance					(440)
11/30/year 5	Totals					2,520

 

Exhibit 2: December Vendor Invoices

Below are the vendor invoices related to materials purchased during the month of December, year 5.

 

B&L Art Supply Co. 55258 North St Des Moines, IA 50211 515-558-6565
Invoice No.         0066 Invoice Date:     December 27, year 5 Customer #:       1820
Address: 1500 N. 15th St Iowa City, Iowa 52245 Phone: 319-525-6368
TERMS: Net 30
Description	Quantity	$ Cost Per Unit	$ Amount
Wood pallets	20	30	$600
Metal pallets	25	5	125
	40	7	280
	40	9	360
Wood panels	20	8	160
Delivery			35
Total Balance Due			$1,560

 

 

Bob's Paint & more 55258 S. Bell St. Coralville, IA 50211 515-558-6565	INVOICE #86465
Date: December 7, year 5
Customer Number:440
1500 N. 15th St.
Iowa City,IA 52245
Terms:     Net 30
Description	Quantity    $ Cost Per Unit		$ Amount
Acrylic assortment 120 ml	50	5.50	$275
Acrylic assortment 250 ml	50	10.00	500
Watercolor sets of 10 .25 oz	10	36.00	360
Watercolor sets of 12 .25 oz	10	45.00	450
Shipping			50
Total Balance Due			$1,545

 

Bob's Paint & More   55258 S. Bell St. Coralville, IA 50211 515-558-6565	#86476
Date: December 10, year 5
Customer Number:440
1500 N. 15th St.
Iowa City,IA 52245
Terms:      Net 30
Description	Quantity    $ Cost Per Unit	$ Amount
Acrylic brushes  #2	50                                12	$600
Acrylic brushes  #3	40                                10	400
	20                                10	200
	15                                15	225
Shipping		20
Total Balance Due		$1,445

 

INVOICE    #6354 Office Supplies, Inc.  154 Lake St. Iowa City, IA 52245
Description	Quantity	$ Cost Per Unit	$Amount
Printer/copier	1	120	$120
	1	35	35
Printer ink black	2	38	76
Printer ink color	2	42	84
Shipping			15
Total Balance Due			$330

 

 

Exhibit 3: Correspondence with Bob's Paint & More

 

Date: December 6, year 5 

Subject: Defective products

 

Bob,

 

In November we received a supply of acrylic paint that is defective. Customers have been returning it to us because it is partially dried out. The defective paint was included on invoice #86445 in the amount of $220. We ordered 40 tubes of assorted 120 ml paint.

 

There are still 15 tubes in stock. I checked them out and removed them from the shelves. I plan to place a new order to replenish the stock. Please double check its freshness before you have it shipped.

 

Thank you, Abby Martin

 

 

Date: December 6, year 5 

Subject: RE: Defective products

 

Hello Abby,

 

I apologize for the defective paint. It is the first time we have encountered a problem like that. I am going to be near your store tomorrow. I would like to pick up the remaining supply and will issue you a credit for $220.

 

I assure you that I will check the next shipment for quality before it is shipped. Best regards,

Bob Hartley

Paint & More
 

 

Bob's Paint & More                             55258 S. Bell St. Coralville, IA 50211 515-558-6565
Date: December 6, year 5
Customer Number:440
1500 N. 15th St.
Iowa City, IA 52245
Terms:     Net 30
Description	Quantity    $ Cost Per Unit	$ Amount
Defective Acrylic Paint 120 ml assortment	40                            5.50	$(220)
Total Credit Issued		$(220)

 

Exhibit 4: Correspondence with Tony's Cleaning Service                

                       

 

Date: December 1, year 5

Subject: Over payment 

 

Tony,

I reviewed my bank statement and records. It appears we paid you twice for the work you did for us in October. Check #1424 was dated November 5. On November 12, we issued check #1428 in the same amount of $440.

 

Since we did not use your cleaning service in November, I would like to have you come back during December. The holiday traffic is increasing our needs for deep cleaning.

Will you consider the additional check a prepayment for work in December? Thank you,

Abby Martin

 

 

Date: December 1, year 5 

Subject: RE: Over payment

 

Dear Abby,

 

I should have contacted you when I received the second check, but I was busy and forgot to send you a note.

 

We can certainly apply the extra $440 to the cleaning I will provide during December. I will send you an invoice on December 20. Please note that the cost of my services increased to

$500. I will be closing then for the rest of the month for the holidays. Best regards,

Tony Jones

 

INVOICE    #6354

Tony's Cleaning Service

1356 Forest St. Suite A Iowa City, IA 52245

Date: December 20, year 5

Mart, 1500N. 15th St.,Iowa City, Iowa52245

Description

Monthly cleaning service for December                                                                                                                        $500

Less: duplicate check received for October services                                                                                                   (440)

 

 

Total Balance Due                                                                                                                                                                  $60

 

 

 

Exhibit 6: Checking Account Statement

 

City Park Bank P.O. Box 866 Iowa City,Iowa 52245         Checking Account Statement Account #00907-9879 December 1 through December 31, Year 5
Date	Description	Debit	Credit	Balance
12/1/year 5	Beginning Balance			4,565
12/1/year 5	Deposit	1,250		5,815
12/5/year 5	Check #1431 Electric Company		275	5,540
12/5/ year 5	Check #1432 Water Bill		175	5,365
12/5/ year 5	Check #1433 Garbage Service		140	5,225
12/10/year 5	Check #1434 Office Supplies, Inc.		120	5,105
12/13/year 5	Check #1435		1,345	3,760
12/13/year 5	Check #1436 Sculpture Supply		525	3,235
12/15/year 5	Deposit	2,250		5,485
12/17/year 5	Check #1437 B&L Art Supply		550	4,935
12/21/year 5	Check #1438		60	4,875
12/22/year 5	Deposit	1,750		6,625
12/27/year 5	Check #1439 Art Supply Company		420	6,205
12/29/year 5	Automatic Payment Mortgage #4554		3,325	2,880