Higher Colleges of Technology BUS 4113 – Financial Accounting Sage 50 (Peachtree) Software

Using Peachtree Accounting software

Demo exercise
Fabulous Fruit Company
P.O. Box 12345, Dubai, UAE

Fabulous Fruit (FF) is a new corporation that imports fruit from Africa to sell to supermarkets in Dubai. It sells the
following:

Product Selling price Cost Price Supplier

1 Mangoes AED 20 per kilo AED 16 per kilo Magnificent Mangoes Inc.
2 Papayas AED 15 per kilo AED 12 per kilo Plump Papayas Farms
3 Bananas AED 10 per kilo AED 8 per kilo Bermuda Bananas Ltd.

The purchase terms for all suppliers are n/30 and the credit limit is AED 100,000 each.

FF has 3 main customers:

1. Spinneys terms 2/10, n/30, credit limit 100,000
2. Union Co-op terms 2/10, n/30, credit limit 100,000
3. Choithrams terms 2/10, n/30, credit limit 100,000

FF is starting business on January 1, 2014 and they would like you to set up their company on Peachtree using the
accrual basis, real time, and a perpetual FIFO inventory system.

Prepare Your Chart of Accounts:

A/C A/c Name A/C A/c Name
code code
Current Assets – (100 – 149) Equity – (300 – 399)
100 Cash -- (Cash) 300 Common Stock—(Equity-doesn’t close)
105 Accounts Receivable -- (Accounts receivable) 301 Retained Earnings—(Equity-Retained earnings)
110 Inventory -- (Inventory)
115 Office Supplies-- (Other Current Assets) Revenue (Income) – (400 – 499)
120 Prepaid Rent -- (Other Current assets) 400 Sales Revenue – (Income)
125 Prepaid Insurance-- (Other Current assets) 401 Sales discounts – (Income)

Fixed Assets – (150 – 199) Expenses – (500 – 599)

150 Office Equipment—(Fixed Assets) 500 Cost of goods sold -- (Cost of Sales)
151 Acc. Depreciation- Off.Eq. – (Acc. Depreciation) 505 Utilities expense – (Expenses)
510 Salaries expense– (Expenses)
Current Liabilities – (200 -- 249) 515 Rent expense– (Expenses)
200 Accounts payable—(Accounts payable) 520 Insurance expense– (Expenses)
525 Office supplies expense– (Expenses)
530 Depreciation expense– (Expenses)

Transactions for January, 2014

Jan 1 Issued 10,000 common shares for AED50 each.

Jan 1 Paid AED 7,200 for the next six months rent of a part of a warehouse to Global Storage solutions.
Check # 101 (Invoice # GSS1011)

Jan 2 Paid AED 24,000 for an insurance policy for a year to Nexus Insurance. Check # FF102
(Invoice # NI1010)

Compiled:Rao KVN 1
Higher Colleges of Technology BUS 4113 – Financial Accounting Sage 50 (Peachtree) Software

Jan 3 Purchased some office equipment for AED 32,000 cash from Office Solutions – Check # FF103
(Invoice # OS2109).

The equipment has a useful life of 5 years and a salvage value of AED 2,000. The company uses the
straight line depreciation method for this asset.
Jan 4 Purchased on credit 200 kilos of bananas at AED 8 per kilo (invoice # 356), 100 kilos of mangoes at
AED16 per kilo ( invoice # 67), and 150 kilos of papayas at AED12 per kilo. (invoice # 2005)

Jan 5 Purchased office supplies for AED 4,000 cash from Staioney Solutions. Check # FF104
(Invoice # SS2213)

Jan 5 Sold 110 kilos of bananas and 90 kilos of mangoes to Spinneys on credit. (invoice # 2014-1)

Jan 8 Sold 60 kilos of bananas and 80 kilos of papayas to Union Co-op on account. (invoice # 2014-2)

Jan 9 Paid the amount owing to all three suppliers.

(Invoice # 356; Check # FF105)
(Invoice #67; Check # FF106)
(Invoice #2005; Check # FF107)
Jan 10 Purchased 250 kilos of bananas on account. Price has risen to AED 9 per kilo (invoice # 393) and 120
kilos of mangoes at AED 16 per kilo. (invoice # 74).

Jan 11 Collected the amount owing from Union Co-op (check # 667) and gave them the discount.

Jan 14 Sold 200 kilos of bananas, 50 kilos of mangoes and 50 kilos of papayas to Choithrams. (invoice
#2014-3)

Jan 19 Purchased 300 kilos of bananas at AED 9 per kilo (invoice # 423), 100 kilos of mangoes at AED 16
per kilo (invoice # 79) and 200 kilos of papayas at a reduced price of AED 10 per kilo.
(invoice # 2449)

Jan 20 Returned 50 kilos ofmangoes to the supplier. (invoice # 79)

—Debit note was issued (Debit note # VCRN1) (Peachtree calls Debit notes as vendor credit notes)
Jan 22 Collected the money owing from Spinneys (check # 7361)

Jan 25 Sold 150 kilos of bananas and 140 kilos of papayas to Spinneys. (invoice #2014- 4)

Jan 28 Paid electric bill of AED 500 cash. Check # FF108

Jan 30 Paid salaries of AED 1,500 in cash. Check # FF109

Jan 30 Sold 60 kilos of papayas to Choithrams (invoice #2014- 5)

Jan 31 Choithrams returned 20 kilos of papayas. (invoice #2014- 5)

—Credit note was issued (Credit note # CRN1)
Jan 31 Prepare all the necessatry adjusting journal entries at the end of the first month .
Assume Office supplies on hand is AED 1,000.

(Prepaid Rent; Prepaid Insurance; Depreciation expense; Office supplies expense)

Compiled:Rao KVN 2