CHAPTER I

INTRODUCTION TO COMPUTERIZED
ACCOUNTING

CHAPTER II SAMPLE PROBLEM 1 - S

Follow the step-by-step instruction in this problem to practice what you have
learned in this chapter. Each step lists a task to be completed at the computer. More
detailed information on how to complete the task is provided immediately following
the step.
Before starting this problem, be sure you have a properly formatted data disk
( or establish a folder on a hard disk or network or in the USB ) for saving your data.

1 Start up Integrated Accounting 3e

2 Open the file name IA3 Problem 01-S

Choose Open from the File menu or click on the Open toolbar button. When the
open file dialog box appears, select the drive and folder containing the opening
balance files. Then choose file IA3 Problem 01-S from the list box.

3 When the User Name dialog box appear, enter your name in the User
Name text
box and click on OK.
Check carefully that you have entered your name correctly because you will not be
able to change it for the duration of the problem.

4 Save the file to your disk or USB and directory. Enter a file name of 01-S
followed by Your Name.

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Choose Save As from the file menu or click on the Save As toolbar button and save
the file to your disk or USB and folder as 01-S Your Name, where 01-S represents
Chapter 1 Sample Problem.
5 Experiment with accessing the Help System.
Select the Help Content and Index menu item from the Help menu or use the F1
function key to obtain information about Accounting Drills and Planning Tools.

6 Familiarize yourself with the use of the on-screen calculator by

multiplying
3,895.00 by 2%.
Choose Calculator from the Options menu or click on the Calculator toolbar button.
When calculator appears, type 3895. Then, press the asterisk key (* for multiply),
type 2, and press the % key. As an alternative, use mouse to click on each of the
appropriate keys to perform the calculation, the result should be 77.90.

7 Calculate the annual contribution toward the cost of college using the
College
Planner.
Choose Planning Tools from the Data menu or Click on the Tools toolbar button.
When the Planning Tools window appears, click on the College Planner tab (if not
already selected). Click on the Annual Contribution option in the Calculate section,
and then enter the information provided below.

Beginning College Saving 5,000.00

Annual Yield (Percent) 8.25
Years Until College 8
Number of Years of College 4
Annual Cost 12,000.00

Press Tab after entering Annual College Cost, And the calculated Annual
Contribution will appear.

2
8 Enter the following transactions into the accounting equation and
display the accounting equation report.
Sept. 1 Received cash from owner as an investment, 9,000.00
2 Paid cash for supplies, 185.00
3 Paid cash for insurance, 850.00 (Note: Prepaid insurance account
is used.)
4 Paid cash for legal expense, 350.00
4 Bought supplies on account, 1,000.00
6 Owner withdrew cash for personal use, 1,200.00
6 Paid cash on account, 600.00

a. Choose Accounting Drill by clicking on the Drill toolbar button.

b. Select the Accounting Equation tab.
c. Enter the accounting transactions. After entering the first line of transaction,
press Enter to go to the next line.
d. Click on the Report button to obtain a display of your work. Click on the close
Report button.

9 Identify account classifications, normal account balances, and debit or

credit increases for each account in the general ledger.
a. Choose Accounting Drill by clicking on the Drills toolbar button and then
click on the Classify Accounts tab.
b. Select the desired account from the drop-down list by clicking on the
drop-down arrow button and selecting one of the accounts listed above.
Click on the Next button to proceed.
c. Select the account classification by clicking on the drop-down arrow
button and selecting the appropriate account classification. Click on the
Next button to proceed.
d. Select the appropriate normal balance. Click on the Next button to
proceed.

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 e. Select whether the account is increase with a debit or credit. Click on the
Finish button.
f. Repeat steps b-e for each of the remaining accounts listed above.
g. Click on the Report button to obtain a display of your work (items that
are incorrect are displayed in RED). Click on the Close report button.

10 Use the Explore Accounting System to display the Cash account’s

activity and current balance.
a. Choose the Explore Accounting System by clicking on the Explore
Accounting System menu item in the Report menu or by clicking on the
Explore toolbar button.
b. Click on the plus sign (+) in front of the Chart of Accounts in the left
frame (a listing of all account will appear).
c. Click on Cash in the left frame. The Cash account’s activity and current
balance will appear in the right frame.
d. Click on the Close box (X) in the upper right corner of the window to exit
the Explore Accounting System.

11 Access the Web browser to learn how to find information on the World
Wide Web.
a. Choose the browser by clicking on the Web browser menu item in the Internet
menu or by clicking on the browser toolbar button.
b. Click on the earth icon in front of search in the left frame. Read the
corresponding information that appears in the frame.
c. Click on the close box (X) in the upper right corner of the window to exit the
browser.

12 Save the data file.

Click on the Save toolbar button. The file will saved to disk with the current path and
file name ( note the file name in the title bar of the Integrated Accounting 3e
application window).

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 CHAPTER 1I STUDENT EXERCISE

I. MATCHING

Direction: For each of the definitions, write the letter of the appropriate term in the
space provided.

a. help system i. toolbar

b. option buttons j tab sequence
c. check boxes k. text boxes
d. command buttons l. insertion point
e. window m. clipboard
f. drop-down menu n. focus
g. list box o. tool tips
h. menu bar p. grid cells

1. __________ The legal sequence in which the computer is expecting each grid cell,
textbox, option button, and/ or command to be accessed.
2. __________ A bar displayed continuously on the top line of the screen, showing the
menus available.
3. __________ A list of items appearing immediately below the selected menus.
4. __________ Fields in a window that are used to enter, change or delete text.
5. __________ A rectangular area of the screen in which the software is
communicating with the user.
6. __________ A list of options associated with the text box from which the user may
choose.
7. __________ Buttons representing options, where the selected option contains a
filled circle icon and only one option may be selected.

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8. __________ A button that initiates an immediate action.
9. __________ A box located to the left of each of several choices that is either blank
or contains a checkmark and permits the user to select or deselect the choices.
10. __________ A bar displayed on the top of the application window that contains
icons representing common processing tasks a user is likely to perform.
11. __________ An arrangement of rows and columns that is used to enter, edit, or
delete data and text.
12. __________ The location within a window in which the computer will receive the
next piece of input as identified by a highlight bar, insertion point, or dotted
box.
13. __________ A character that appears when the mouse pointer is position over a
text box to mark the current position where data will be entered or edited.
14. __________ A provision within the software that offers a quick way to find
information about key terms, what to enter into text boxes, the effect of option
button setting, the steps required to perform a particular procedure, and
shortcut keys the user may use to accomplish various tasks.
15. __________ A brief informational message that automatically appears when
pointer is positioned on a toolbar button.
16. __________ A temporary storage area where data may be copied and then pasted
elsewhere.

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II. QUESTIONS

1. What is the definition of accounting

_________________________________________________________
2. What is the name of the occupation of a person who summarizes
detailed accounting information and then analyzes and interprets the
information to assist owners and managers in making financial
decisions? ________________________________________________
3. What is a business? ________________________________________
4. What is a management information system (MIS)?
_________________________________________________________
5. State the accounting equation? ________________________________
6. What is an account classification? _____________________________
7. What is the double-entry accounting system? ____________________
8. What is the purpose of the Explore Accounting System?
_________________________________________________________
9. What is the purpose of the web Browser? _______________________
10. What is the purpose of the Internet FTP feature of the software?
_________________________________________________________
11. Identify the five planning tools provided in Integrated Accounting?
_________________________________________________________

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 PROBLEM 1-A

In the following problem, you will practice what you have learned in this chapter. As
you complete this problem, access the Browser for helpful check figures to audit your
work.

1 Remove the Audit Test Question I-A at he end of this problem and fill the
answers as you work through the following steps.
2 Start up Integrated Accounting 3e.
3 Open and load file IA3 Problem 01-AB.
4 Enter your name in the User Name dialog box.
5 Choose Save as and save the file to your disk and folder with a file name of
01-A your name.
6 Access the help system to obtain information about using the web browser
to search the internet.
7 Use the on-screen calculator to multiply $4,225.50 by 2%.
8 Calculate the annual cost of college based upon savings using the college
planner.
With the annual college cost option on, enter the data provided below and then
display the schedule of college savings and payments reports.
Beginning College Savings $6,000.00
Annual Yield (percent) 8.75
Years Until College 8
Number of years of college 4
Annual Contribution $3,600.00
9 Use the accounting Equation tab in the drills window to enter the
following transactions.
Sept. 1 Received cash from owner as an investment, $8,000.00
2 Paid cash for supplies, $200.00
3 Paid cash for insurance covering next 3 months, $395.00

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 4 Paid cash for advertising, $450.00
5 Bought supplies on account, $1,200.00
6 Owners withdraw cash for personal use, $1,500.00
6 Paid cash on accounting, $ 700.00

10 Display the accounting Equation report.

11 Use the classify accounts tab in the drills window to identify the account
classification, normal account balance, and debit or credit increase
for each of the following accounts:
Cash
David Lindsay, Capital
Prepaid Insurance
Legal Expense
Miscellaneous Expense
Accounts payable

12 Display the classify accounts report.

13 Use the Explore Accounting System to display the supplies account
activity and current balance.
14 Save the data file.
Internet Activity: If you have access to the internet, use the browser to
find information about careers in the accounting field.
Hint: Use a search string of accounting careers to narrow your search.
Select one of the carrers and report your findings. Be sure to include the
source and the URL ( Internet address) of your search.

15 End the integrated Accounting 3e session.

9
AUDIT QUESTION I-A
Direction: Write the answers to the following questions in the space provide.

1. From the help system, note the procedure for using the browser to
search the Internet. _________________________________________________
2. What is the result of using the calculator to find 2 percent of $4,225.50?
___________________________________________________________
3. From the college planner, what is the calculated annual college
payments? ____________________________________________________________
4. What is the total amount of assets shown on the accounting equation
report? _____________________________________________________
5. What account number is assigned to fees? _________________________
6. From the explore accounting system, note the transaction activity for
supplies account.______________________________________________

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PROBLEM I-B

In the following problem, you will practice what you have learned in this
chapter.

1. Removed the audit test Questions 1-B at the end of this chapter and
fill in the answer as you work through the following steps.
2. Start up Integrated Accounting 3e.
3. Open and load file IA3 problem 0I-AB.
4. Enter your name in the user name dialog box.
5. Choose save as and save the file to your disk and foldr with a file
name of 01-B your name.
6. Access the help system to obtain information about using the
internet feature of the software to download accounting files.
7. Use the on-screen calculator to divide $48,840.00 by 12.
8. Calculate the annual cost of college based upon savings using the
college planner.
With the annual college cost option on, enter the data provided below,
and then display the schedule of college savings and payments reports
Beginning College Savings $3,000.00
Annual Yields (Percent) 8.25
Years Until College 12
Number of years of college 4
Annual contribution $2,400.00
9. Use the accounting equation tab in the drills window to enter the
following transactions.
Sept. 1. Received cash from owners as an investment, $10.000.00
2. Paid cash for supplies, $410.00
2. Paid cash for insurance covering next 6 months, $500.00
3. Bought supplies on account, $ 2,600.00

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 4. Paid cash for utility bills, $168.50
5. Owners withdraw cash for personal use, $2,000.00
6. Paid Cash on account, $1,200.00

10.Display the accounting Equation report.

11. Use the classify accounts tab in the drills window to identify the
account classification, normal account balance, and debit or credit
increase for each of the following accounts:
Supplies
Accounts Payable
Advertising Expense
Utilities Expense
David Lindsay, Drawing
Rent Expense
12. Display the classify accounts report.
13. Use the Explore Accounting System to display the accounts payable
account activity.
14. Save the data file.
Internet Activity: If you have access to the internet, use the browser to
find information about foreign currency exchange rates,
Hint: Use a search. Select one of the currency denominations and report
your findings. Be sure to include the source and the URL (Internet
address) of your search.
15. End the integrated Accounting 3e session.

12
AUDIT QUESTION I-B
Direction: Write the answer to the following question in the space
provided.

1. From the help system, note the procedure for using the internet to
download accounting files. __________________________________
2. What is the result of using the calculator to find the quotient of
$48,840 divide by 12? ______________________________________
3. From the college planner, what is the calculated annual college
payments? _______________________________________________
4. What is the total amount of assets shown on the accounting equation
report? __________________________________________________
5. What account number is assigned to Utilities Expense?
________________________________________________________
6. From the Explore Accounting System. Note the transaction activity
for Accounts payable. _________________________________________

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 CHAPTER II
ACCOUNTING CYCLE OF A SERVICE BUSINES
AND BANK RECONCILIATION

CHAPTER III PROBLEM 2-S

The operating procedure introduced in this chapter will be used in this

computer problem. To complete the problem, follow the step-by-step
instructions provided. Each step lists a task to be completed at the computer.
More detailed information on how to complete the task is provided
immediately following the step. Also, remember that the Help System is
always available.
The transactions for Marlow Consulting occurred during the period of
November 1 through November 30 of the current year. The general journal
entries are illustrated within the step-by-step instructions. Maintenance data
for the chart of accounts are also provided.

1. Start up Integrated Accounting 3e.

2. Load the opening balance problem file, IA3 Problem 02-S
3. Enter your name in the User Name text box and click on OK.
4. Save the file to your disk and folder with the file name of 02-S Your
name.
5. Enter the addition to the chart of accounts.
Click on the accounts toolbar button. Enter the following maintenance
data:
Add Repair & Maintenance to the chart of accounts. Assign account
number 5185 for repair & maintenance so that it will be positioned
immediately following Insurance Expense.

14
 Add Dues & subscription to the chart of accounts. Assign account
number 5195 to due & subscriptions so that it will be positioned
immediately following Advertising Expense.
6. Enter the general journal transactions.
Click on the journal toolbar button. When the journal Entries window
appears, click on the general journal tab (if not already chosen), and
enter the journal entries. The reference numbers that are to be keyed
into the journal are the check numbers and invoice numbers provided in
the following transaction statements.
General Journal Transaction
Nov. 01 Paid Cash for month’s rent, $ 1,500.00; check No. 3815.
01 Paid cash for monthly telephone bill, $ 264.97: Check No.
3816.
02 Purchased supplies on account, $ 128.50; Invoice No. 2509.
02 Received cash on account, $ 2,000.00; Sales Invoice No.
5328.
03 Paid Cash for charitable contribution, $ 75.00; Check No.
3817.
03 Paid cash on account for supplies, $ 95.40; Check No. 3818.
03 Purchase supplies on account, $ 307.25; Invoice No. 2510.
06 Paid cash for mileage reimbursement, $ 335.78; Check No.
3819. Charge to auto mobile expense.
06 Purchase computer repair service on account, $395.00;
invoice No. 2511
07 Paid cash for travel expense, $265.90; Check No. 3820.
07 Purchase office equipment on account, $225.00; Invoice
No.
2512.
09 Billed client for services rendered, $ 2,500.00;Invoice no>
5432.
09 Received cash on account, $810.15; Sales Invoice No. 5430.

15
 Nov. 13 Billed client for services rendered, $3,250; Invoice No.
5433.
14 Purchased advertising on account, $ 500.00; Invoice No.
2513
14 Paid cash for flowers, $ 42.62; Check No. 3821. Charge to
miscellaneous expense.
17 Purchase a news letter subscription on account, $ 150.00;
Invoice No. 2514.
20 Billed client for services rendered, $ 3,750.00; Invoice No.
5434.
22 Paid cash for prepaid fire and theft insurance, $325.00;
Check No. 3822.
27 Paid cash on account, $487.63; Check No. 3823.
27 Paid cash on account, $795.66; Check No. 3824.
28 Received cash on account, $ 2,850.00; Sales Invoice No.
5431.
28 Received cash on account, $ 2,500.00; Sales Invoice No.
5432.
30 Paid cash on account, $ 306.78; Check No. 3825.
30 Paid cash on account, $ 307.25; Check No. 3826.
30 Received cash on account, $ 3,600.00; Sales Invoice No.
5429
30 Paid monthly salaries, $ 2,054.38; Check No. 3827.
30 Withdrew cash for owner’s personal use, $ 3,500.00; Check
No. 3828.

7. Display the chart of accounts.

Click on the reports toolbar button. When the report selection window
appears, choose the account lists option from the select a report group.
Select the Chart of accounts report from the choose a report to display
list (if not already highlighted). And click on OK.

16
8. Display the general journal report.
From the reports button, choose the journals option and the general
journal report, then click OK. When the journal Report Selection window
appears, choose the customize journal report option. Set the start date to
11/01/-- and the end date to 11/30/-- (where the current year). Now
click on OK.
9. Display the trial Balance.
Choose Ledger Reports in the report selection window, select trial
balance, and click on OK.
10.Enter the adjustment data for the month of November for Marlow
Consulting.
Click on the journal toolbar button, click on the general journal tab, and
enter the adjusting entries.
Insurance expired during November $ 75.00
Inventory of supplies on November 30 976.50
Depreciation on office equipment for November 410.17
11.Display the adjusting Entries.
Click on the reports toolbar button. When the reports selection dialog
box appears, choose the journals option button, select the general
journal report, and click on the OK button. When the journal report
selection dialog box appears, choose the customize journal report option,
and enter a reference restriction of Adj. Ent. So that only the adjusting
entries are reported.
12.Display the income statement.
Choose the financial statement option button from the report selection
dialog box, select the income statement report, and click on OK.
13.Display the yearly consulting fees account detail from the income
statement .
Click on the yearly Amount of consulting fees (109,882.73), then click on
the show Detail button.

17
14.Display the balance sheet.
Select the balance sheet report, then click on the Ok button.
15.Display the cash account detail from the balance sheet.
Click on the cash amount ($7,808.71), then click on the show detail
button.
16.Display the statement of owner’s equity.
Select the statement of Owners Equity report, then click on the OK
button.
17.Generate a 3-D expense distribution graph.
Click on the graphs toolbar button. When the graph selection dialog box
appears, click on the expense Distribution button.
18.Process the bank reconciliation data listed below.
Click the other toolbar button. When the bank Reconciliation active tab
appears, enter credit, bank charge, balance shown on bank statement,
and outstanding deposit amounts.( The check book balance will be
provided by the computer.) To enter the outstanding checks, move the
pointer to the checks from the journal list, select the desired check (point
and click to highlight). And click the select button. The selected check
will appear in the Outstanding checklist, and the Adjusted Bank Balance
will automatically be updated. Repeat this procedure for each
outstanding check.

Checkbook Balance $7,808.71

Bank credit 253.14
Bank Charges 15.50
Balance shown on bank statement 6,548.05
Outstanding deposit as follows:
$2,500.00
$2,850.00
$3,600.00
Outstanding check as follows

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 Check No. Amount
3823 487.63
3824 795.66
3825 306.78
3826 307.25
3827 2,054.38
3828 3,500.00

19.Display the bank reconciliation report.

Click the report button located at the button of Bank Reconciliation.

20.Save the data file.

Click on the save toolbar button.

21.Optional spreadsheet activity.

Marlow Consulting has asked you to create a spreadsheet report
showing only the amount of accounts receivable during the month of
November from the accounting system data. To complete this task,
follow steps below.
a. Display and copy the general journal report to the clipboard in
journal report. Follow the procedure in step 8 to display the general
journal report. When the general journal report appears, click on the
copy button, and select the option to copy the report to the clipboard
in spreadsheet format.
b. Start your spreadsheet software.
c. Open and load spreadsheet template file: IA3 spreadsheet O2-S
d. Select cell AI as the current cell (if not already selected)
e. Paste the general ledger journal report (copied to the clipboard in
step a) into the spreadsheet. Select the paste item from the Edit
menu.

19
 f. Delete all rows of data that are not accounts receivable/ consulting
fees transactions.
g. Change the title of the report from General Journal to Accounts
Receivable.
h. Replace the old totals with the sum of the debit and credit columns.
Enter the formulas in the appropriate format for your spreadsheet
software
i. Format the spreadsheet to match the completed spreadsheet shown
in figure 2.31
j. Print the completed report
k. Save your spreadsheet file to your disk and folder with a file name of)
@-S your name.
l. End your spreadsheet session, and return to the integrated
application.
Internet Application: If you have access to the internet, use the
browser identify accounting professional organizations in other
countries. For example, use Australia Accounting, Canada Accounting,
South Africa Accounting
22.End the Integrated Accounting 3e session.

20
 CHAPTER III STUDENT EXERCISE

I. Matching
Direction: For each of the definition, write the letter of the appropriate term
in the space provided.

a.accounting cycle i. income statement

b. fiscal period j. component percentage
c. maintaining accounts k. balance sheet
d. journal l. statement of owner’s
equity
e.posting m. graph
f. general journal n. closing journal entries
g.adjusting entries o. post-closing trial balance
h. general journal report p. bank reconcillation

1. _______ A pictorial representation of data that can be produced by the computer

and depicted on the screen and printer.
2. _______ A tab used to enter and post general journal entries and to make
corrections or delete existing journal entries.
3. _______ The process of updating the ledger accounts with all debits and credits
affecting each account.
4. _______ A display or printout that is useful in deleting errors and verifying the
quality of debits and credits.
5. _______ The process of adding new accounts, changing titles of existing accounts,
and deleting inactive accounts from the chart of accounts.
6. _______ A financial statement used to show the that have occurred to the owner’s
equity during the fiscal period.

21
7. _______ A financial statement that provides information on the net income or net
loss of a business over a period of time.
8. _______ A financial statement that provides information on the overall financial
strength of a business.
9. _______ A value that represents a percent of total operating revenue.
10. _______ The process that involves all accounting activities, beginning with
entering transactions and ending with closing.
11. _______ A regular interval of time for which a business analyzes its financial
information.
12. _______A record of a debit and credit parts of each transaction recorded in date
sequence.
13. _______ Changes entered into the computer to update general ledger accounts at
the end of a fiscal period.
14. _______ Journal entries automatically generated by the computer that closes all
temporary income statement accounts to the income summary accounts, closes
the income summary accounts to the capital accounts, and closes the drawing
accounts to the capital account.
15. _______ A report produced after the period end closing procedure is completed
that verifies the debits equal credits in the general ledger accounts.
16. _______ A report that reconciles the bank statement balance with the checkbook
balance.

22
II. TRUE/FALSE

Directions: If the statement is true, write T in the space provided. I f the statement is
false, write an F in the space provided.

1. ________ An entry to add a new account is entered in the

General Journal window.
2. ________ Only transactions that do not involve cash maybe
recorded in the general journal window.
3. ________ General Ledger accounts cannot be deleted unless
the account balance is zero.
4. ________ The find menu item in the edit menu could be
used to find a transaction that contained a specified debit or credit amount.
5. ________ The chart of accounts button on the general
Journal window generates a Chart of accounts selection list.
6. ________ A new general ledger account can be added ( for
change) while entering a journal entry.
7. ________ Instead of entering an account number in the
general Journal, you may select the account from a chart of accounts selection
list window.

23
III. Questions

Directions: Answer each of the following questions in the space provided.

1. Describe the process for adding an account to the chart of

accounts. _____________________________________________________
2. Describe the process for changing the title of an existing
account in the chart of accounts.
_______________________________________________________________________
3. Describe the process for deleting an account from the chart of
accounts that has a zero balance.
________________________________________________________________
4. What kind of transaction may be entered in the general
journal? ____________________
5. Describe the process for correcting a general journal entry.
________________________
6. Describe the process for deleting a general journal entry.
_________________________
7. Explain how the chart of accounts button can be used while
entering general journal transactions.
_____________________________________________________________
8. Complete the date range section of the following journal
report selection window to display all general journal entries from July 1
through July 31 of the current year.
________________________________________________________________________
9. Complete the following journal report selection window to
display all general journal entries from September 1 through September 10 of

24
 the current year with a reference of 5435.
___________________________________________________________________
10. If the balance in the supplies account after all transactions for
the fiscal period have been processed and before adjusting entries is $ 1,585.00
and the current supplies inventory is $ 1, 250.00, what is the amount of the
supplies adjusting entry?
___________________________________________________________________
11. What financial statements are available for non-
departmentalized business organized as a sole proprietorship?
_______________________________________________________
12. What information as automatically provided by the computer
from the journal entries for the bank reconciliation?
____________________________________________________
13. Briefly describe the closing entries automatically generated
by the computer. ________________________________________________________________________
14. Describe the procedure to correct an error discovered after
closing. ________________________________________________________________________

25
Problem 2-A

The problem is a continuation of sample problem 2-S. You will enter the general
journal entries for the month of December of the current year and complete the end-of-
fiscal period processing. Answer Audit Questions 2-A on pages 85-86 while you are
working on this problem as you complete this problem. Access the browser to helpful
check figures to audit your work.
General Journal Transactions
Dec. 01 Paid Cash for month’s rent, $ 1,500.00; check No. 3829.
01 Paid cash for monthly telephone bill, $ 294.83: Check No.
3830.
02 Paid cash for delivery charges, $32.50; Check No. 3831.
Charge to miscellaneous expense.
05 Purchase Advertising on account, $250.00; Invoice No.
2515.
05 Billed client for services rendered, $2,640.00; Invoice No.
5435
06 Purchase supplies on account, $ 131.75; Invoice No. 2516.
06 Paid cash for mileage reimbursement, $405.00; Check No.
3832. Charge to auto mobile expense.
07 Purchase repair service on account, $286.41; invoice
No. 2517
07 Paid cash for travel expense, $110.00; Check No. 3833.
09 Paid cash on account, $175.00; Check No.3834

26
 09 Purchase Supplies on account, $224.20; Invoice No. 2518
09 Billed client for services rendered, $ 2,000.00; Invoice no.
5436
12 Billed client for services rendered, $3,575.00; Invoice No.
5437.
13 Purchased advertising on account, $ 500.00; Invoice No.
2519
14 Paid cash for dues to a professional organization, $300.00;
Check No. 3835.
Dec. 15 Received cash on account, $2,650.00; Invoice No. 5435
16 Paid cash for charitable contribution, $35.00; Check No.
3836.
19 Received cash on account, $3,750.00; Invoice No. 5434
20 Billed client for services rendered, $1,000.00; Invoice No.
5438.
21 Purchase Supplies on account, $120.00; Invoice No. 2520.
23 Paid cash on account, $136.85; Check No. 3837.
27 Paid cash on account, $250.00; Check No. 3838.
28 Received cash on account, $ 3,250.00; Invoice No. 5433
30 Paid cash on account, $ 311.86; Check No. 3839.
30 Received cash on account, $ 2,000.00; Invoice No. 5436
30 Paid monthly salaries, $ 2,054.38; Check No. 3840.
30 Withdrew cash for owner’s personal use, $ 3,000.00; Check
No. 3841.
1. Start up Integrated Accounting 3e.
2. Open the opening balances file named 1A3 problem 02-AB.
3. Enter your name in the user Name text box.
4. Save the file to your drive and folder with a file name of 02-ABC your
name, where 02_A is the problem number, and BC stands for “ Before
Closing”
5. Enter the December general Journal Transactions.

27
6. Display the general Journal report for the month of December.
7. Display the Trial Balance.
8. Enter the Adjusting Entries for the Month of December for Marlow
Consulting:
Insurance expired during December 75.35
Inventory of supplies on December 30 1,187.50
Depreciation on office equipment for December 410.17
9. Display the December adjusting Entries.
10.Display the Income Statement.
11.Display the yearly Consulting fees account detail from the income
statement.
12.Display the balance sheet.
13.Display the supplies account detail from the balance sheet.
14.Display the statement of the owner’s Equity.
15.Generate an expense distribution graph.
16.Process the bank reconciliation data listed
Checkbook Balance $10,853.29
Bank credit 283.96
Bank Charges 12.00
Balance shown on bank statement 5,091.49
Outstanding deposit as follows:
$2,650.00
$3,750.00
$3,250.00
$2,000.00
Outstanding check as follows
Check No. Amount
3838 250.00
3839 311.86
3840 2,054.38
3841 3,000.00

28
 17.Display the bank reconciliation report.
18.Save your data file ( with a file name of ) 02-ABC Your name).
19. End the Integrated Accounting 3E session.

AUDIT QUESTION III-A

DIRECTION: Write the Answers to the following questions in the space provided.

1. What is the amount of check number 3829 shown on the general journal report?
_______________________________________________________________
2. What is the total of the debit and credit columns of the general journal reports
( being adjusting entries)? ________________________________________________
3. What is the balance in the Rent Expense account? _______________________
4. What is the balance in the Dues & subscriptions Expense account?
_______________________________________________________________
5. What are the debit and credit totals shown in the trial balance report?
_______________________________________________________________
6. What is the total of the debit and credit columns of the adjusting entries shown
on the general journal report for adjusting entries?
_______________________________________________________________
7. What is the total operating revenue for the year? _______________________
8. What is the total operating expenses for the year? _______________________
9. What are the total operating expenses for the month as a percentage of total
operating revenue? _______________________________________________________
10. What is the net income for the month? ________________________________

29
11. What is the net income for the year as a percentage of total operating revenue?
_______________________________________________________________
12. What are the total assets? ___________________________________________
13. What are total liabilities? ____________________________________________
14. What is the Owner’s Equity at the end of the fiscal period? _________________
15. From the expense Distribution bar graph, what are the three highest expense?
_________________________________________________________________
16. From the bank reconciliation report, what is the amount of the adjusted
checkbook and bank balance? _____________________________________________________
17. What is the total of the debit and credit columns of the closing entries shown on
the general journal report? ____________________________________________________
18. What is the debit and credit total shown in the trial balance after closing?
____________

30
PROBLEM 2-B

This problem is the continuation of sample problem 2-S. You will enter the general
journal entries for the month of December of the current year and complete the end-of-
fiscal period processing. Answer Audit Questions 2-B on page 91-92 as you complete
this problem.

General Journal Transaction

Dec. 01 Paid Cash for month’s rent, $ 1,500.00; check No. 3815.
01 Paid cash for monthly telephone bill, $315.27: Check No.
3816.
02 Paid cash for delivery charges, $24.35; Check No. 3817.
Charge to miscellaneous expense.
05 Purchase Advertising on account, $185.00; Invoice No.
2515.
05 Billed client for services rendered, $2,800.00; Invoice No.
5435
06 Purchase supplies on account, $160.00; Invoice No. 2516.
06 Paid cash for mileage reimbursement, $358.60; Check No.
3832. Charge to auto mobile expense.
07 Purchase repair service on account, $350.00; Invoice
No. 2517
07 Paid cash for travel expense, $94.86; Check No. 3819.

31
 09 Paid cash on account, $137.42; Check No.3820
09 Purchase Supplies on account, $239.95; Invoice No. 2518
09 Billed client for services rendered $ 1,500.00; Invoice no.
5436
12 Billed client for services rendered, $4,000.00; Invoice No.
5437.
13 Purchased advertising on account, $ 600.00; Invoice No.
2519
14 Paid cash for dues to a professional organization, $275.00;
Check No. 3821.
Dec 15 Received cash on account, $2,800.00; Invoice No. 5435
16 Paid cash for charitable contribution, $25.00; Check No.
3822.
19 Received cash on account, $3,750.00; Invoice No. 5434
20 Billed client for services rendered, $850.00; Invoice No.
5438.
21 Purchase Supplies on account, $105.00; Invoice No. 2520.
23 Paid cash on account, $145.00; Check No. 3823.
27 Paid cash on account, $215.00; Check No. 3824.
29 Received cash on account, $ 3,250.00; Invoice No. 5433
30 Paid cash on account, $ 309.10; Check No. 3825.
30 Received cash on account, $ 21,500.00; Invoice No. 5436
30 Paid monthly salaries, $ 2,054.38; Check No. 3826.
30 Withdrew cash for owner’s personal use, $ 3,200.00; Check
No. 3827.

1. Start up Integrated Accounting 3e.

2. Open the opening file named 1A3 problem 02-AB.
3. Enter your name in the username text box.

32
4. Save the file to your drive and folder with a file name of 02-BBC your
name, where 02-B is the problem number, and BC stand for “ before
closing”.
5. Enter the December general journal transactions.
6. Display the general journal report for the month of December.
7. Display a trial balance.

8. Enter the adjusting Entries for the month of December for Marlow
Consulting
Insurance expired during December 75.35
Inventory of supplies on December 30 1,162.50
Depreciation on office equipment for December 410.17
9. Display the December adjusting entries.
10.Display the income statement.
11.Display the yearly consulting fees account detail from the income
statement,
12.Display the balance sheet.
13.Display the Supplies account detail from the balance sheet.
14.Display the statement of owner’s equity.
15.Generate the expense distribution graph.
16.process the bank reconciliation data listed below:
Checkbook Balance $10,454.73
Bank credit 219.62
Bank Charges 17.50
Balance shown on bank statement 5,280.33
Outstanding deposit as follows:
$2,800.00
$3,750.00
$3,250.00
$1,500.00

33
 Outstanding check as follows
Check No. Amount
3823 145.00
3824 215.00
3825 309.10
3826 2,054.38
3827 3,200.00

17.Display the bank reconciliation report.

18.Save your data file ( with a file name of 02-BBC your name)
19.End the integrated Accounting 3e session.

34
AUDIT QUESTION 2-B

Direction: Write the answer to the following question in the space provided.

1. What is the amount of check number 3824 shown on the general journal
report?__________________________________________________________
2. What is the total of the debit and credit columns of the general journal
reports ( before adjusting entries)?__________________________________________
3. What is the balance in the accounts payable account?_____________________
4. What is the balance in the Advertising Expense account? __________________
5. What are the debit and credit totals shown in the trial balance report?
__________________________________________________________
6. What is the total of the debit and credit columns of the adjusting entries
shown on this general journal report for adjusting entries?
__________________________
7. What is the total operating revenue for the year? __________________________
8. What are the total operating expenses for the month?
_______________________
9. What are the total operating expenses for the year as a percentage of
total operating revenue? __________________________________________________
10. What is the net income for the year?____________________________________
11. What is the net income for the month as a percentage of total operating
revenue?__________________________________________________________

35
12. What are the total assets?_____________________________________________
13. What are the total liabilities? __________________________________________
14. What is the owner’s equity t the end of the fiscal year?______________________
15. From the Expenses Distribution bar graph, what are the two highest
expenses?_________________________________________________________
16. From the bank reconciliation report, what is the amount of the adjusted
checkbook and bank balances?_________________________________________
17. What is the total of the debit and credit columns of the closing entries
shown on the general journal entries report?
______________________________________
18. What is the debit and credit total shown in the trial balance after closing?
___________________________________________________________

36
 CHAPTER III
ACCOUNTING CYCLES OF A
MERCHANDISING BUSINESS

SAMPLE PROBLEM 3-S

This problem illustrates hoe the accounting cycle for a merchandising business is
completed. You will learn to use a computerized accounting system to complete the
accounting cycle using special journals.
The chart of accounts, vendor list, customer list, and opening balances for tanner
wholesale Co. will be the basis for this sample problem. All transaction for Tanner
Wholesale Co. given in the step by step instruction, occurred during April of the
current year. If you wish to print a displayed report, press the print command button at
the button of the report window.

1. Start up Integrated Accounting 3e.

2. Load the Opening balances template file, IA3 problem 03-S.
3. Enter your name in the user name text box and click on Ok.
4. Use Save As to save the data with a file name of 03-S your name.

37
5. Add three accounts to the chart of accounts: Delivery Expense, account
number 6125: Telephone Expense, account number 6560: and Heating &
Lighting Exp. Account number 6570.
Click on the Accounts toolbar button. Enter the chart of accounts
maintenance data
6. Delete Briggs & Associates from the customer list.
Click on the Customer tab of the account maintenance window. Select Briggs &
Associates from the customer list and click on the Delete button.

7. Change the name of the customer Mercy Clinic. Ltd to Mercy Clinic, Assoc.,
and add a new customer, Mason Corporation, to the customer list.
Use the customer tab on the account maintenance window to enter the
customer maintenance data.
8. Enter the general journal transactions.
Click on the journal toolbar button. When the journal Entries window appears,
click on the General journals tab and enter the journal entries.
General Journal Transactions
Apr. 13 Granted credit for damaged merchandise to Kimble Carpet
Center,
$398.75; the credit memo applies to Sales Invoice No. 5291.
26 Returned merchandise to Lindemann Company, $636.42; the
debit memo applies to Invoice No. 3507.
9. Enter the April Purchases journal transaction.
Click on the Purchases tab and enter the journal transactions. Each purchases
journal entry includes a credit to accounts Payable. In each case this Entry will
be made automatically by the computer.

Purchase Journal Transactions

Apr. 1 Purchase merchandise on account from Albright Company,
$4,015.40; Invoice No. 3526
16 Purchase advertising on account from Schemmel Publications,

38
 $1,406.75; Invoice No. 3527
18 Purchase merchandise on account from Kenward, Inc., $8,895.00;
Invoice 3528
25 Purchase the following on account from Lindemann Company:
supplies, $625.15; office equipment, $1,795.00; Total, $2,420.15;
Invoice No. 3529.
25 Purchase merchandise on account from Huntly Corporation,
$9,934.80; Invoice No. 3530.
26 Purchase merchandise on account from Hinkey Company,
$6,385.00; Invoice No. 3531
27 Purchase merchandise on account from Geppert Supply Corp.,
$7,355.95; Invoice No. 3532.
10.Enter the April Cash payments journal transaction.
Click on the cash payments tab and enter the cash payments journal transaction.
Each cash payments journal entry includes a credit to cash, in each case; this
entry will be made automatically by the computer.

Cash Payment Journal Transactions

Apr. 02 Paid cash for month’s rent, $825.00; Check No. 2228.
04 Paid cash for monthly telephone bill, $397.51; Check No. 2229
04 Paid cash on account to Albright Company, Covering an invoice
amount of $1,544.06, less 2% discount, $30.88; Check No. 2230.
05 Paid $3,000.00 on a note payable, plus interest of $207.96; total
payment, $3,207.96; Check No. 2231
10 Paid cash on account to Geppert Supply Corp., covering an invoice
amount of $2,262.13, less 2% discount, $45.24; Check No. 2232.
24 Paid cash on account to Finch Corporation, covering an invoice
amount of $3,234.90, no discount; Check No. 2233.
26 Paid cash on account to Huntey Corporation, Covering an invoice
amount of $892.42, no discount; Check No. 2234.

39
 28 Linde Tanner, owner, withdrew cash for personal use, $2,400.00;
Check No. 2235.
28 Paid cash for insurance premium, $1,050.00; Check No. 2236.
29 Paid cash on account to Hinkey Company, covering an invoice
amount of $2,040.50, no discount; Check no. 2237.
30 Paid cash for monthly salaries, sales salaries, $3,256.07; office
salaries, $2,711.34; total, 45,967.41; Check No. 2238..
30 Paid cash for delivery charges, $85.00; Check No. 2239.
30 Paid cash for electric bill, $694.20; Check no. 2240.
30 Paid cash for tax liability, $199.17; Check no. 2241.
30 Paid cash on account to Kenward, Inc., covering an invoice
amount of
$1,182.05, no discount; Check No. 2242.

11.Enter the April sales journal transaction.

Click on the sales tab and enter the sales journal transactions. Each sales journal
entry includes a debit to accounts receivable. In each case, this entry will be made
automatically by the computer.

Sales Journal Transactions

Apr. 08 Sold merchandise on account to Harris Market, $11,974.25; Sales
Invoice No. 5356.
09 Sold merchandise on account to Baxter Legal Services, $815.00;
Sales Invoice No. 5357
26 Sold merchandise on account to Stoffel Manufacturing, $4,200.00;
Sales Invoice No. 5358.
29 Sold merchandise on account to United Corporation, $4,895.95;
Sales Invoice No. 5359.
29 Sold merchandise on account to Mason Corporation, $1,500.00;
Sales Invoice No. 5360.

40
 30 Sold merchandise on account to Campbell Interiors, $17,350.00;
Sales Invoice No. 5361.
30 Sold merchandise on account to Matson Boutique, $9,986.00;
Sales Invoice No. 5362.
12.Enter the April cash receipts journal transaction
Click on the cash receipts tab and enter the cash receipt journal transactions.
Each cash receipts journal entry includes a debit to cash. In each case, this Entry
will be made automatically by the computer.

Cash Receipts Journal Transactions

Apr. 05 Received cash on account from Campbell Interiors, covering Sales
Invoice No. 5341 for $7,522.73, less 2% discount, $150.45.
09 Received cash on account from Mercy Clinic, Assoc., covering
Sales Invoice No. 5336 for $8,135.00, less 2% discount, $162.70.
10 Received cash on account from Matson Boutique, covering Sales
Invoice No. 5330 for $5,000, no discount..
11 Received cash on account from Telshaw Rental Agency, covering
Sales Invoice No. 5338 for $1,019.44, No discount.
16 Received cash on account from Matson Boutique, covering Sales
Invoice No. 5343 for $6,694.62, no discount.
17 Received cash on account from Baxter Legal Services, covering
Sales Invoice No. 5328 for $8,688.77, no discount.
20 Received cash on account from Burgess Service Center, covering
Sales Invoice No. 5321 for $125.00, no discount.
24 Received cash on account from Stoffel Manufacturing, covering
Sales Invoice No. 5342 for $13,218.31, no discount.
29 Received cash on account from Burgess Service Center, covering
Sales Invoice No. 5339 for $5,307.43, no discount.

41
 30 Recorded cash sales for April 16 through April 30, $3,406.50, plus
6% sales tax, $204.39; total, $3,310.89. Cash Receipt No. 1202.
13.Display the Chart of accounts.
Click on the reports toolbar button. When the report selection window appears,
choose the account list option from the select a report group list. Select the
chart of accounts report from the choose a report to display list and click OK.
14.Display the Customer list.
Select the customer list and click Ok.

15.Display the journal entries.

Choose journals from the select a report group, list. Select the desired journal
report from the choose a report to display list and click Ok. Choose to include all
journal entries in the reports.
16.Display a trial balance.
Choose Ledger reports in the report selection window, select the trial balance,
and click on Ok.
17.Display the schedule of accounts payable and accounts payable ledger
reports.
Select the desired report and click Ok.
18. Display the schedule of accounts receivable and accounts receivable
ledger reports.
Select the desired report and click on ok.

End-of-Month Activities

After the monthly transactions have been processed, the adjusting entries must be
entered into the computer and printed. The financial statements may be then be

42
displayed. Tanner Wholesale Co. had the following adjustment data for the month of
April.

Merchandise inventory on April 30 $134,985.00

Insurance expired during April 375.00
Inventory of supplies 2,750.00
Depreciation for April:
Warehouse equipment 651.37
Office equipment 228.00
Salaries Payable:
Sales Salaries 425.00
Office Salaries 304.00

1. Enter the adjusting entries.

Click on the journal toolbar button, click on the General Journal tab.
2. Display the adjusting entries.
Click on the reports toolbar button. When the report selection dialog box
appears, choose the journals option button, select the general journal report,
and click on Ok. When the journal report selection dialog box appears, choose
the customize journal report option and enter a reference restriction of Adj. Ent
so that only the adjusting entries are reported.
3. Display the income statement.
Choose the financial statement option button from the report selection dialog
box, select the income statement report, and click on ok.
4. Display the balance sheet.
Select the balance report and click on OK.
5. Display the Statement of owner’s equity.
Select the statement of owner’s Equity report and click on OK.
6. Generate a top customer’s and sale graph.
Click on the graphs toolbar button. Click on the Top customers button to
generate the customers sales bar graph.

43
7. Save the data file. Click on the save toolbar button.
8. Optional spreadsheet integration activity.
Use a spreadsheet integration activity. Use a spreadsheet to prepare a report
and pie chart showing the component percent owed each vendor as of April 30.
To complete this task, use the following steps.
a. Display and copy the schedule of accounts payable report to the
clipboard in spreadsheet format.
b. Start your spreadsheet software and load template file 1A3 spreadsheet
03-S.
c. Select cell A1 as the current cell
d. Paste the schedule of accounts payable report into the spreadsheet.
e. Enter percent in cell C7. Enter the formula to calculate the sum of the
balance column. Enter the formula to calculate the component percent in
cell C9. Copy and paste the formula in cell C9 to cells C10 thru C15.
f. Format the amount in currency format and calculated percentages in
percentage format if necessary.
g. Generate a pie chart. Select the range of cells A9 thru B15, then choose
the Chart or graph menu item from the spreadsheet program you are
using. If the computer ask for a graph name, enter Vendors in the graph
name text box and click on Ok. Choose pie chart from the toolbar if the
graph that appears is not a pie chart. Finally, if the spreadsheet you are
using permits copying and pasting the graph into the worksheet, copy
and paste the graph into cells A22 thru E40.
h. Print the spreadsheet and pie chart. The completed spreadsheet and pie
chart are shown in Figure 3.24.
i. Save your spreadsheet data to your disk with a file name of 03-S your
name.
j. What if Hunley Corporation’s balance amount is changed to 48,600.00?
Enter this change. Notice the effects of this change on the component
percentage and the pie chart.
k. End your spreadsheet session.

44
9. Optional word processing integration activity.
Tanner Wholesale Co. consults with Levine &Associates, a local accounting firm,
for financial advice. Donald Levine, owner and CPA of the accounting firm, has
asked for a list of the vendors with their account balances at the end of each
month. You are to use the word processing fax template used by the Tanner
Wholesale Co. for most of its facsimile transmittals to prepare this document for
the month ended April 30.
a. Display and copy the schedule of accounts payable report to the
clipboard in word processing format.
b. Start your word processing application software and load template file
IAW Wordprocessing 03-S.
c. Enter your name in the form field and complete the remainder of the top
portion of the facsimile as shown in Figure 3.25.
d. Position the insertion point one line after “Notes/Comments” and paste
the report. Delete report headings, totals, etc., and format the document
to match Figure 3.25. Experiment with adding further enhancement to
the appearance of the fax.
e. Print the completed document. Many computers have the capability to
fax documents directly from the word processor.
f. Save the document to your disk with a file name of 03-S Your Name.
g. End your word processing session. Internet Activity : If you have access
to the internet, use the browser to find the twelve U.S Federal Reserve
Banks. Use Federal Reserve Banks for your search. Identify the location
of each of the twelve Federal Reserve Banks and sure to include the
source and the URL of your search.

10.End the Integrated Accounting 3e session.

45
PROBLEM 3-A

Problem 3-A is a continuation of Sample problem 3-S. Follow the step-by-step

procedure to complete this problem for Tanner Wholesale Co. for the month of May of
the current year. Answer Audit Question 3-A on page 133 as you complete this
problem. Display reports as necessary to answer the Question. As you complete this
problem, access the Browser for helpful check figures to audit your work.

1. Start up Integrated Accounting 3e.

2. Open the file named IA3 problem 03-AB.

3. Enter your name in the User Name text box.

4. Use Save as to save the data with a file name of 03-A your name.

5. Add legal & Prof. Fees Exp. To the chart of accounts. Assign account
number 6580 so that it will immediately follow Heating &Lighting Exp.

6. Delete Saffert Imports from the vendor list.

46
7. Change the name of the vendor Hinkley Company to Hinkley, Inc., and add
a new vendor, Bresnan Mfg, Inc., to the vendor list.

8. Enter the general journal transactions

General Journal Transactions

May 01 Reversing entries required by April adjustments. Using the
adjustment data presented in Sample Problem 3 – S as the basis for your
reversing entries, the only entry that requires reversing is for Salaries
Payable.
05/01 Rev. Ent. 2130 Salaries Payable 729.00
05/01 Rev. Ent 6110 Sales salary expense 425.00
05/01 Rev. Ent 6540 Office salary expense 304.00
26 Granted credit for damaged merchandise to Stoffel
Manufacturing. $1,000.00; the credit memo applies to Sales
Invoice No. 5358.
26 Returned merchandise to Albright Company, $80.00; the debit
memo applies to Invoice No. 3526.

9. Enter the purchases journal transactions.

Purchase Journal Transactions

May 03 Purchase merchandise on account from Albright Company,
$2,983.70;
Invoice No. 3533.

47
 04 Purchased advertising on account from Schemmel Publication,
$2,125.00 Invoice No. 3534.
05 Purchase merchandise on account from Kenward Inc., $8,056.25;
Invoice No. 3535.
05 Purchased the following on account from Lindemann Company;
supplies, $915.00; office equipment, $890.00; total, $1,805.00;
Invoice No. 3536.
10 Purchase merchandise on account from Huntey Corporation,
$9,995.00; Invoice No. 3537.
12 Purchase merchandise on account from Hinkey, Inc., $8,235.50;
Invoice No. 3537.
13 Purchase merchandise on account from Geppert Suuply Corp.,
$10,139.16; Invoice No. 3539.
24 Purchase merchandise on account from Bresnan Mfg., $1,887.73;
Invoice No. 3540.

10.Enter the cash payments journal transactions.

Cash Payment Journal Transactions

May 03 Paid cash for month’s rent, $825.00; Check No. 2243.
04 Paid cash for monthly telephone bill, $502.38; Check No. 2244
04 Paid cash on account to Schemmel Publication, covering an
invoice amount of $2,412.53, no discount; Check No. 2245.
05 Paid $3,000.00 on a note payable, plus interest of $203.47; total
payment, $3,203.47; Check No. 2246.
05 Paid cash on account to Huntley Corporation, covering an invoice
amount of $9,934.80, less 2% discount, $198.70; Check no. 2247.
06 Paid cash on account to Lindemann Company, covering an invoice
amount of $2,441.49, no discount; Check no. 2248.

48
 07 Paid cash on account to Kenward Inc., covering an invoice amount
of $8,895.00, no discount; Check no. 2249.
17 Paid cash on account to Schemmel Publication, covering an
invoice amount of $2,125.00, no discount; Check no. 2250
18 Paid cash for delivery charges, $105.00; Check No. 2251.
19 Paid cash on account to Hinkey, Inc., covering an invoice amount
of $6,385.00, no discount; Check no. 2252.
20 Paid cash for legal fees, $3,250.00; Check No. 2253.
21 Paid cash for printing business cards, $300.00; Check No. 2254.
Charge to miscellaneous Selling Expense
27 Linda Tanner, owner, withdrew cash for personal use, $2,400.00;
Check no. 2255.
27 Paid cash on account to Geppert Supply Corp., covering an invoice
amount of $7,355.95, no discount; Check no. 2256.
30 Paid monthly salaries; sales salaries, $3,414.60; office salaries,
$2,859.45; total, $6,274.05; Check No. 2257.
30 Paid cash for electric bill, $718.37; Check No. 2258.
30 Paid cash for sales tax liability, $456.99; Check No. 2259.

11.Enter the sales journal transactions

Sales Journal Transactions

May 03 Sold merchandise on account to Harris Market, $15,050.00; Sales
invoice No. 5363.
04 Sold merchandise on account to Baxter Legal Services, $985.00;
Sales Invoice No. 5364.
06 Sold merchandise on account to Stoffel Manufacturing, $3,525.00;
Sales Invoice No. 5365.
10 Sold merchandise on account to United Corporation, $3,100.00;
Sales Invoice No. 5366.

49
 11 Sold merchandise on account to Mason Corporation, $1,209.10;
Sales Invoice No. 5367.
14 Sold merchandise on account to Campbell Interiors, $11,970.85;
Sales Invoice No. 5368.
18 Sold merchandise on account to Matson Boutique, $8,250.00;
Sales Invoice No. 5369.
19 Sold merchandise on account to Mercy Clinic, Assoc., $5,000.00;
Sales Invoice No. 5370.
21 Sold merchandise on account to Burgess Service Center,
$1,775.95; Sales Invoice No. 5371.
24 Sold merchandise on account to Kimble Carpet Center,
$11,695.00; Sales Invoice No. 5372.

12.Enter the cash receipts journal transactions.

Cash Receipts Journal

May 03 Received cash on account from Harris Market, covering Sales
Invoice No. 5356 for $11,974.25, no discount.
07 Received cash on account from Matson Boutique, covering Sales
Invoice No. 5362 for $9,986.00, less 2% discount, $199.72.
08 Received cash on account from Campbell, covering Sales Invoice
No. 5361 for $17,350.00, less 2% discount, $347.00.
10 Received cash on account from Baxter Legal Services, covering
Sales Invoice No. 5357 for $815.00, no discount.
11 Received cash on account from Kimble Carpet Center, covering
Sales Invoice No. 5291 for $16,777.75, no discount.
13 Received cash on account from Mason Corporation, covering Sales
Invoice No. 5360 for $1,150.00, no discount.
17 Sold merchandise for cash May 1 through May 15, $4,508.00, plus
6% sales tax, $270.48; total, $4,778.48. Cash Receipts No. 1203.

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 17 Received cash on account from Baxter Legal Services, covering
Sales Invoice No. 5364 for $985.00, no discount.
25 Received cash on account from United Corporation, covering
Sales Invoice No. 5283 for $19,625.15, no discount.
30 Sold merchandise for cash May 16 through May 31, $4,036.00,
plus 6% sales tax, $242.16; total, $4,278.16. Cash Receipts No.
1204.
13.Display the chart accounts.
14.Display the vendor list.
15.Display the journal entries and make corrections, if necessary.
16.Display the trial balance.
17.Display the schedule of accounts receivable and accounts receivable
ledger reports
18.Display the schedule of accounts receivable and account receivable ledger
report.

END-OF-MONTH ACTIVITIES

After the monthly transactions have been processed, the adjusting entries must be
entered into the computer and displayed. The adjustment data for the month of May
for Tanner Wholesale Co. follows. Use the trail balance prepared in step 16 as the basis
for preparing the adjusting entries.
Merchandise inventory on May 31 $130,435.00
Insurance expired during May 390.00
Inventory of supplies 2,350.00
Depreciation for May:
Warehouse equipment 651.37
Office equipment 254.00
Salaries Payable:
Sales Salaries 449.00
Office Salaries 324.00

51
1. Enter the adjusting entries in the general journal. Enter a reference of
adjusting entries in the reference box.

2. Display the adjusting entries.

3. Display the income statement.

4. Display the balance sheet.

5. Display the statement of owner’s equity.

6. Display the balance sheet graph.

7. Click on the save toolbar button to save the data file.

8. Optional spreadsheet integration activity.

a. Display and copy the schedule of accounts receivable report to the

clipboard in spreadsheet format.
b. Start your spreadsheet software and load template file !A3 spreadsheet
03-S
c. Select cell A1 as the current cell and paste the schedule of accounts
receivable report into the spreadsheet.
d. Enter the percent in cell C7. Enter the formula to calculate the sum of
balance column. Enter the formula to calculate the component
percentage in cell C9. Copy and paste the formula in cell C9 to
appropriate cells.
e. Format the amounts in currency format and calculated percentage
format if necessary.

52
 f. Generate a pie chart depicting the data in the report.
g. Print the spreadsheet and the pie chart.
h. Save the spreadsheet data to your disk with a file name of 03-A your
name.
i. What if Campbell Interior’s is now $15,000.00 and Kimble Carpet
Center’s balance is now $10,000.00? Enter these changes and the
formula to compute the total. Notice the effects of these changes on the
component percentage and pie chart.
j. End your spreadsheet session.

9. Optional word processing integration activity. You are to use company’s

word processing fax template to prepare the customer account balance
information for the accounting firm for the month ended May31,--:

a. Display and copy the schedule of accounts receivable report to the

clipboard in word processing format.
b. Start your word processing application software and load template file
IA3 Wordprocessing 03-S.
c. Enter your name in the from files and complete the remainder of the top
portion of facsimile as shown in figure 3.25. Remember to change the
subject line to end of the month customer account balances.
d. Paste the report; delete report headings, totals, etc; and format the
document to match Figure3.25.
e. Print the completed document.
f. Save the document to your disk with a file name of 03_A your name
g. End your word processing session.

53
 10.End the integrated Accounting 3e session.

AUDIT QUESTION 3-A

DIRECTION: Write the answer to the following question in the space provide.

1. What are the total debits and total credits shown on the purchases journal
report for the month of May?__________________________________________
2. What are the total debits and total credits shown on the cash payments
journal report for the month of May?_____________________________________
3. What are the total debits and the total credits shown on the sales journal
report for the month of May?__________________________________________________
4. What are the total debits and credits on the cash receipts journal report for
the month of May?___________________________________________________
5. As of May 31, what is the amount owed to Hinkley, Inc.?____________________
6. As of May 31, how much money does Stoffel Manufacturing owe to Tanner
Wholesale CO?__________________________________________
7. From the income statement, what is the cost of merchandising sold for the
month?
________________________________________________________-

54
 8. From the balance sheet, what are the total assets?___________________
9. From the balance sheet, what are the total liabilities?___________________
10. From the statement of owner’s equity, what is Linda Tanner’s capital at the
end of the period?____________________________________________________________

PROBLEM 3-B

Problem 3-B is a continuation of Sample problem 3 –S. Follow the step by step
procedure to complete this problem for Tanner Wholesale C.. for the month of May of
current year. Answer Audit Question 3-B as you complete this problem. Display reports
as necessary to answer the Question.

1. Start up Integrated Accounting 3e.

2. Open the file named 1A3 problem 03-Ab.

3. Enter your name in the user name text box.

4. Use save as to save the data with a file name of 03-B your name.

5. Add Legal & Proof fees Exp. To the chart of accounts. Assign account
number 6580 so that it will immediately follow Heating & Lighting Exp.

55
6. Delete Saffert Imports from the vendor list.

7. Change the name of the vendor Hinkley Company to Hinkley, Inc., and add
a new vendor, Bresnan Mfg., Inc to the vendor list.

8. Enter the general journal transactions.

General Journal Transactions

May 01 Reversing entries required by April adjustments. Using the
adjustment
data presented in Sample Problem 3 – S as the basis for your
reversing entries, the only entry that requires reversing is for
Salaries Payable.
05/01 Rev. Ent. 2130 Salaries Payable 729.00
05/01 Rev. Ent 6110 Sales salary expense 425.00
05/01 Rev. Ent 6540 Office salary expense 304.00
26 Granted credit for damaged merchandise to Stoffel
Manufacturing. $1,018.00; the credit memo applies to Sales
Invoice No. 5358.
26 Returned merchandise to Albright Company, $82.00; the debit
memo applies to Invoice No. 3526.

9. Enter the purchases journal transactions.

Purchase Journal Transactions

May 03 Purchase merchandise on account from Albright Company,
$3,105.00;
Invoice No. 3533.

56
 04 Purchased advertising on account from Schemmel Publication,
$1,893.50; Invoice No. 3534.
05 Purchase merchandise on account from Kenward Inc., $8,216.24;
Invoice No. 3535.
05 Purchased the following on account from Lindemann Company;
supplies, $1,015.00; office equipment, $775.85; total, $1,790.85;
Invoice No. 3536.
10 Purchase merchandise on account from Huntey Corporation,
$10,148.00; Invoice No. 3537.
12 Purchase merchandise on account from Hinkey, Inc., $7,934.80;
Invoice No. 3538.
13 Purchase merchandise on account from Geppert Suuply Corp.,
$11,000.00; Invoice No. 3539.
24 Purchase merchandise on account from Bresnan Mfg., $1,609.00;
Invoice No. 3540.
10.Enter the cash payments journal transactions.

Cash Payment Journal Transactions

May 03 Paid cash for month’s rent, $825.00; Check No. 2243.
04 Paid cash for monthly telephone bill, $564.37; Check No. 2244
04 Paid cash on account to Schemmel Publication, covering an
invoice
amount of $2,412.53, no discount; Check No. 2245.
05 Paid $3,000.00 on a note payable, plus interest of $203.47; total
payment, $3,203.47; Check No. 2246.
05 Paid cash on account to Huntley Corporation, covering an invoice
amount of $9,934.80, less 2% discount, $198.70; Check no. 2247.
06 Paid cash on account to Lindemann Company, covering an invoice
amount of $2,441.49, no discount; Check no. 2248.
07 Paid cash on account to Kenward Inc., covering an invoice amount
of $8,895.00, no discount; Check no. 2249.

57
 17 Paid cash on account to Schemmel Publication, covering an
invoice amount of $1,893.50, no discount; Check no. 2250
18 Paid cash for delivery charges, $95.00; Check No. 2251.
19 Paid cash on account to Hinkey, Inc., covering an invoice amount
of $6,385.00, no discount; Check no. 2252.
20 Paid cash for legal fees, $3,500.00; Check No. 2253.
21 Paid cash for printing business cards, $250.00; Check No. 2254.
Charge to miscellaneous Selling Expense
27 Linda Tanner, owner, withdrew cash for personal use, $2,750.00;
Check no. 2255.
27 Paid cash on account to Geppert Supply Corp., covering an invoice
amount of $7,355.95, no discount; Check no. 2256.
30 Paid monthly salaries; sales salaries, $3,569.70; office salaries,
$2,910.30; total, $6,480.00; Check No. 2257.
30 Paid cash for electric bill, $682.41; Check No. 2258.
30 Paid cash for sales tax liability, $456.99; Check No. 2259.
11.Enter the sales journal transactions

Sales Journal Transactions

May 03 Sold merchandise on account to Harris Market, $14,998.62; Sales
invoice No. 5363.
04 Sold merchandise on account to Baxter Legal Services, $1,250.00;
Sales Invoice No. 5364.
06 Sold merchandise on account to Stoffel Manufacturing, $3,104.81;
Sales Invoice No. 5365.
10 Sold merchandise on account to United Corporation, $3,050.90;
Sales Invoice No. 5366.
11 Sold merchandise on account to Mason Corporation, $907.67;
Sales Invoice No. 5367.
14 Sold merchandise on account to Campbell Interiors, $13,587.25;
Sales Invoice No. 5368.

58
 18 Sold merchandise on account to Matson Boutique, $8,085.00;
Sales Invoice No. 5369.
19 Sold merchandise on account to Mercy Clinic, Assoc., $5,409.35;
Sales Invoice No. 5370.
21 Sold merchandise on account to Burgess Service Center,
$2,005.00; Sales Invoice No. 5371.
24 Sold merchandise on account to Kimble Carpet Center,
$11,482.75; Sales Invoice No. 5372.

12.Enter the cash receipts journal transactions.

Cash Receipts Journal Transactions

May 03 Received cash on account from Harris Market, covering Sales
Invoice No. 5356 for $11,974.25, no discount.
07 Received cash on account from Matson Boutique, covering Sales
Invoice No. 5362 for $9,986.00, less 2% discount, $199.72.
08 Received cash on account from Campbell, covering Sales Invoice
No. 5361 for $17,350.00, less 2% discount, $347.00.
10 Received cash on account from Baxter Legal Services, covering
Sales Invoice No. 5357 for $815.00, no discount.
11 Received cash on account from Kimble Carpet Center, covering
Sales Invoice No. 5291 for $16,777.75, no discount.
13 Received cash on account from Mason Corporation, covering Sales
Invoice No. 5360 for $1,150.00, no discount.
17 Sold merchandise for cash May 1 through May 15, $4,496.84, plus
6% sales tax, $269.81; total, $4,766.65. Cash Receipts No. 1203.
17 Received cash on account from Baxter Legal Services, covering
Sales Invoice No. 5364 for $1,250.00, no discount.

59
 25 Received cash on account from United Corporation, covering
Sales Invoice No. 5283 for $19,625.15, no discount.
30 Sold merchandise for cash May 16 through May 31, $4,211.00,
plus 6% sales tax, $252.66; total, $4,463.66. Cash Receipts No.
1204.

13.Display the chart of accounts.

14.Display the vendor list.
15.Display the journal entries and make corrections, if necessary.
16.Display the trial balance.
17.Display the schedule of accounts payable and accounts payable ledger
reports
18.Display the schedule of accounts receivable and accounts receivable
ledger reports.

END-OF-MONTH ACIVITIES

After the monthly transactions have been processed. The adjusting entries must be
entered into the computer and displayed. The financial statements may be then
displayed. The adjustment data for the month of May for Tanner Wholesale Co. follows.
Use the trial balance prepared in Step 16 as the basis for preparing the adjusting
entries.

Merchandise inventory on May 31 $129,835.00

Insurance expired during May 435.00
Inventory of supplies 2,175.00
Depreciation for May:
Warehouse equipment 651.37
Office equipment 257.00
Salaries Payable:
Sales Salaries 457.00

60
 Office Salaries 331.50

1. Enter the adjusting entries in the general journal. Enter a reference of

Adjusting entries in the general journal. Enter a reference of adjusting
Entries in the reference text box.

2. Display the adjusting entries.

3. Display the income statement.

4. Display the balance sheet.

5. Display the statement of owner’s equity.

6. Display an income statement graph.

7. Click on the save toolbar to save the data file.

8. Optional spreadsheet integration activity.

Use a spreadsheet prepare a report and pie chart showing the component
percentage owed by each customer as of May 31.

a. Display and copy the schedule of accounts receivable report to the

clipboard in spreadsheet format.
b. Start your spreadsheet software and load template file 1A3 spreadsheet
03-S.
c. Select cell A1 as the current cell and paste the schedule of accounts
receivable report into the spreadsheet.
d. Enter percent in cell C7. Enter the formula to calculate the sum of the
balance column. Enter the formula to calculate the component
percentage in cell C9. Copy and paste the formula in cell C9 to
appropriate cells.

61
 e. Format the amounts in currency format and calculated percentage
format if necessary.
f. Generate a pie chart depicting the data in the report.
g. Print the spreadsheet and the pie chart.
h. Save the spreadsheet data to your disk with a file name of 03-B your
name.
i. What if Burgess Service Center’s Balance is now $4,000.00 and Matson
Boutique’s balance is now $ 13,585.00? Enter these changes and the
formula to compute the total. Notice the effects of these changes on the
component percentages and pie chart.
j. End your spreadsheet session.

9. Optional word processing integration activity. You are to use company’s

word processing fax template to prepare the customer account balance
information for the accounting firm for the month ended May31,--:

a. Display and copy the schedule of accounts receivable report to the

clipboard in word processing format.
b. Start your word processing application software and load template file
IA3 Word processing 03-S.
c. Enter your name in the from files and complete the remainder of the top
portion of facsimile as shown in figure 3.25. Remember to change the
subject line to end of the month customer account balances.
d. Paste the report; delete report headings, totals, etc; and format the
document to match Figure3.25.
e. Print the completed document.
f. Save the document to your disk with a file name of 03-B your name.
g. End your word processing session.

10.End the integrated Accounting 3e session.

62
AUDIT QUESTION 3-B

Direction: Write the answer to the following question in the space provided.

1. What are the total debits and total credits shown on the purchases journal
report for the month of May?
2. What are the total debits and total credits shown on the cash payments
journal report for the month of May?
3. What are the total debits and the total credits shown on the sales journal
report for the month of May?
4. What are the total debits and credits on the cash receipts journal report for
the month of May?
5. As of May 31, what is the amount owed to all vendors?
6. As of May 31, how much money does Campbell Interiors owed to Tanner
Wholesale Co. ?
7. From the income statement, what is the cost of merchandising sold for the
month?
8. From the balance sheet, what are the total assets?

63
9. From the balance sheet, what are the total liabilities?
10. From the statement of owner’s equity, what is Linda Tanner’s capital at the
end of the period?

64