AIS

Project 1 (Manual Process) Instructions

Read the Getting Started document first that discusses the project, how to get started and the information, documents and excel files you will need from Canvas.Part A of the project has you processing documents and recording transactions in special journals (when needed) for the day to day operations of a business.You will also update the general ledger and prepare a pre adjusting entry trial balance.Part B will have you do adjusting entries, post the adjusting entries, prepare a trial balance and prepare financial statements.

PART A - Recording Transactions

One Time Hits Electronic Company buys and sells DVD players, VHS players, and Phonographs.They use the periodic inventory method to record cost of goods sold.This means that all purchases of inventory will be recorded to purchases, not inventory, and that cost of goods sold will be recorded with the adjusting entries, not for each shipment.

Following are a list of events for 2003.You are responsible for completing the documents related to these events (from the revenue and expenditure cycles), recording the transactions, if required, in the special journals, posting these to the ledgers (general ledger and subsidiary ledger when applicable), and prepare some reports.As part of this assignment you will take on the many roles of the individuals from the different departments that are responsible for the transactions.

Events:

Dec. 12:Received Customer order 2011 from Shawn Patrick.It was for a total of $1,950.They ordered 10 DVD40s ($80 each), 20 DVD30s ($50 each), and 5 VHS30 ($30 each).They would like these goods on December 19.Please Process Sales Order #1200. (but do not ship the goods). This is Revenue Cycle Step 1.

Dec. 13:Received approved requisition form from Operations requesting the purchase of20DVD Players-Basic and 25 DVD Players-Premium.These items will be purchased from 3DN Inc with an expected delivery date of Dec 30.Issue P.O. Number 358. This is Expenditure Cycle Step 1.

Dec 16:Paid amount due ($750) to Abbey Roads Inc. for Purchase Order Number 320.Issue check number 154.This is Expenditure Cycle Step 4.

(Note: from Documents in process you will need:a) invoice from Abbey Roads Inc, b) PO 320 (accounts payable copy) and c) receiving report.

Dec. 17:Received all of the product promotion pamphlets purchased for the marketing department.The purchase order (P.O.) was 356.The receiving department verified that all 1,000 pamphlets were there and in good condition.The pamphlets were sent to the marketing department.Use receiving number 121.This is Expenditure Cycle Step 2.

(Note: from Documents in process you will need: PO 356 receiving department copy)

Dec 18:Accounts Payable received invoice from Beach Bum Inc. for the promotion pamphlets ordered on P.O. 356.Record these as Promotion and advertising expense (account # 50300).

(Note: from Documents in process you will need: Invoice#488 from Beach Bum and PO 356 accounts payable copy).(Note: this is not inventory.This is for account 50300-Promotion and Advertising Expense)

Dec. 20:Received approved requisition form from the Accounting Department requesting the purchase of 10 Pads of Columnar Paper (cost $5 each), 2 Printer Toners ($70 each), and 2 boxes of copy paper ($20 each).These items will be purchased from Highway Suppliers with an expected delivery date of January 3, 2004.Issue P.O. Number 359.

Dec 19:Shipped the goods for Sales Order number 1200.Please process the required documents and prepare packing slip/Shipping Notice # 1305, bill of lading#1305 and invoice # 1649.DO NOT include freight on the invoice.

Dec. 21:Received Customer order 15666 from Tiny Tim's.It was for a total of $850.They ordered 5 DVD40s ($80 each) and 15 PHN10s ($30 each).They would like these goods shipped on December 31.Please Process Sales Order #1201. (but do not ship the goods).

Dec. 27.Pay amount due to Beach Bum Inc for PO number 356.Use check 155.

Dec 29:Received notification from the bank they received payment (check 899) from Shawn Patrick for invoice#1649.(Use the customer copy for the Remittance Advice sent by the bank).

Dec 30:Received inventory from 3DN Inc. for Purchase Order Number 358.All items ordered were received in good condition (20 DVD Players Basic and 25 DVD Players-Premium).These items were delivered to the warehouse.Use receiving number 122.

Dec 31:Received invoice from 3DN for PO number 358.

(from Documents in process you will Customer Invoice from 3DN.)

Dec 31:Shipped the goods for Sales Order number 1201.Please process the required documents and prepare packing slip/Shipping Notice # 1306, bill of lading#1306 and issue invoice # 1650.DO NOT include freight on the invoice.

Required:

1)Complete the documents and record the transactions, if required, in the correct special journals. (Hint:Do not use the general journal for these entries.For this project, the general journal will only be used for adjusting entries).Post the information to the subsidiary ledgers (where applicable-see note 4)) but not to the general ledger.

NOTE 1:Not all of the events require entries in the journals.For example the processing of a sales order (Dec. 12) is not an economic event (it will lead to one in the future) and thus no accounting entry is required for this event. To determine what need to be done, for each event identify the event as one of the events on the Cycle Processes and follow the steps.You need to prepare the documents and process them as you do an event.You can not do them at the end.For the first 4, the Cycle Processes step has been identified for you.

NOTE 2:Do not use the general journal for the entries in this part.For this project, the general journal will only be used for adjusting entries in part B.

NOTE 3:Blank Forms needed for processing are included on the excel spread sheets (Revenue Cycle Forms and Expenditure Cycle Forms).The revenue forms include sales orders, bill of ladings, and invoices. They need to be single-sided (Please DO NOT PRINT THEM DOUBLE-SIDED.) The expenditure forms include purchase orders, receiving reports, and checks.Some of these forms are multi-copies.Some of the copies (marked N/A) will not be required.Please complete all required copies of the forms.(To help you, the copies have been linked to the first copy.If you input information on the first copy it will be duplicated on the other copies).You need to print these out and process them according.Please see the Cycles processes document for narratives on the process.For this project you will complete each type of form twice (that means you will have to print out 2 sets of each form).

Note 4:Posting to the subsidiary ledger:For every transaction recorded in the special journals that involves accounts receivables or accounts payables, when you record the transaction in the special journal don't forget to update the accounts payable or accounts receivable subsidiary ledger.Don't post to the general ledger until the end of the period which will be done in step 2.You should look at the transaction processing notes for information to help with posting to ledgers.

2)Post the information to the general ledger (where applicable).(Hint:Don't forget to include the transactions from Dec. 1 - 15 that are already included on the special journals. See our Transaction Processing Lecture Notes for more detail.

Note 5:Posting to the general ledger:At month end, for each special journal, draw a single line in each column (for totaling) at the bottom of the line for the last transaction.Then skip one row on the special journal and write 'December Totals' in the description column.Total each column (including the 'Other' column) and write the total for each column.Note that the transactions from December 1-15 need to be included in the totals.Cross-foot the special journal (add the totals for the debits and credits and make sure they equal) and then draw double lines under each column total.For each special column (except for the other column), post the total to the correct account in the general ledger.Write the total of the special journal column in proper account and complete the balance.Don't forget to put a checkmark under the column total of the special journal when you have finished posting.For the other column you can not post the total.Instead post each item in this column to the general ledger.When complete put a check in the column next to the amount.

3)Prepare a pre-adjusting entry trial balance.

4)Prepare an A/R aging report showing the customer balances and the ages of those balances (customers down the side, current=30, 30-60, 60-90, >90 days across).Aging is based on the days from the invoice date to the date of the report.Note, the $3,000 balance for Smart's accounts receivable is from an old invoice and is over 90 days.The other customer balances will be from December unpaid invoices and will be current.

Go to Part B below.