CHAPTER 3– OPERATING PROCEDURE - MERCHANDISING BUSINESS

Problem 3 – 1
1. Start up Integrated Accounting 7e.
2. Go to File  Open Enter your name in the User Name text box and click OK.
3. Go to File  Open  Click 05-S, IA7
4. Go to Setup

Save the file to your folder with the file name of (your surname) Global Corp.

5. Go to Accts Add Customers

Tian Chon Realty Corp Natuto Structural Design
HM Financial Consultant Majic Tax Consultant
Amar and Associates KJ Construction Inc.

6. Go to Accts Add Vendors

JM Business Solutions Tramp Paper Depot
Amcar Industries Inc. Wil Win Trading
Sun $ Mun Enterprises Newton Industries Inc.
7. Go to Tasks  Budgets Enter the following information:

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 Account Title Budget
Total Revenue P 600,000
Cost of Merchandise Sold 480,000
Advertising Expense 3,000
Rent Expense 15,000
Salaries Expense 50,000
Telephone Expense 15,000
Supplies Expense 8,000
Heating and Lighting Expense 6,000
Insurance Expense 4,000
Depreciation Expense-Warehouse Equipment 12,000
Depreciation Expense-Office Equipment 6,500
Miscellaneous Expense 1,000
Interest Income 2,500
Interest Expense 1,000

8. Enter Purchase Order, Purchase Invoice and Sales Invoice transactions:

Purchase Order, Purchase Invoice and Sales Invoice transactions:

Mar 01 Ordered the following merchandise from Amcar Industries Inc.: terms 2/10 n30;
Purchase Order No. 267.
Item Qty Amount
Color Laser Copier 4 P 1,699.00

Menu Path : Tasks  Purchase Order

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Mar 02 Sold the following merchandise to KJ Construction Co., terms 2/10, n30; 7%
sales tax, Sales Invoice No. 725:
Item Qty Amount
All-Pro Business Copier 2 P 899.00
Office Color Copier 2 1,685.00
AMS 24 lb Copy Paper 3 42.50

Menu Path : Tasks  Sales Invoice

Mar

07 Received the following merchandise for Purchase Order No. 265 from Starr
Enterprises, terms 2/10, n30. Purchase Invoice No. 427.
Item Qty Amount
All-Pro Business Copier 3 P 525.00

Menu Path : Task  Purchase Invoice

Mar 9 Ordered the following merchandise from Amcar Industries Inc.; terms 2/10, n30
Purchase Order No. 268.

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 Item Qty Amount
All-Pro Business Copier 6 P 525.00

Mar 10 Sold the following merchandise to HM Financial Consultant., terms 2/10, n30; 7%
sales tax; Sales Invoice No. 726:
Item Qty Amount
Office Color Copier 1 P 1,685.00
Color Copier Cartridge 2 89.35

Mar 13 Sold the following merchandise to KJ Construction Co., terms 2/10, n30; 7% sales
tax; Sales Invoice No. 727:
Item Qty Amount
AMS 16 lb Copy Paper 5 P 21.95
Laser Copier Cartridge 2 69.00

Mar 15 Sold the following merchandise to Tian Chon Realty Corp., terms 2/10, n30; 7% sales
tax; Sales Invoice No. 728:
Item Qty Amount
Phone Answer & Fax 2 P 329.95
Facsimile Roll Paper 2 24.95

Mar 19 Sold the following merchandise to Majic Tax Consultant, terms 2/10, n30; 7% sales
tax; Sales Invoice No. 729:
Item Qty Amount
Superb Mini Copier 1 P 225.00
AMS 16 lb. Copy Paper 2 21.95
Recycled 20 lb Paper 4 27.95

Mar 20 Sold the following merchandise to Amar and Associates, terms 2/10, n30; 7% sales
tax; Sales Invoice No. 730:
Item Qty Amount
Professional Fax 1 P 999.00
CX10 Fax Cartridge 2 45.00

Mar 23 Received the following merchandise from Carol’s Office Products; 7% sales tax;
Sales Return No. R705 (Enter the quantity as a negative value).
Item Qty Amount
Desktop Facsimile -1 475.00
Mar 23 Received the following merchandise for Purchase Order No. 267 from Amcar
Industries Inc., terms 2/10, n30. Purchase Invoice No. 428.
Item Qty Amount

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 Color Laser Copier 4 P 1,699.00

Mar 26 Sold the following merchandise to HM Financial Consultant , terms 2/10, n30; 7%
sales tax; Sales Invoice No. 731:
Item Qty Amount
AMS 24 LB Copy Paper 15 P 42.50
Copier 12 oz. Toner 4 12.95
Recycled 20 lb paper 2 27.95

Mar 30 Sold the following merchandise to Tian Chon Realty Corp.., terms 2/10, n30; 7%
sales tax; Sales Invoice No. 732:
Item Qty Amount
Color Laser Copier 1 P 2,895.00
Color Copier Cartridge 10 89.35

9. Enter the following Cash Receipts and Cash Payment transactions

Mar 02 Received cash on account from Mallot Realty Co., covering Sales Invoice No. 718 for
P 12,712.50, less 2% discount, P 254.25.

Menu Path : Journals Cash Receipts

Mar 05 Cash Receipt No. 30. Received cash for the maturity value of a long term note
receivable. Principal – P 8,000.00, Interest P 160.00. Interest Rate 2%.

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Mar 05 Paid Office rent for March P 1,500. Check No. 8440.

Menu Path : Journals Cash Payment

Mar 09 Received cash on account from Klein & Associates., covering Sales Invoice No. 720
for P 1,445.25, less 2% discount.

Mar 08 Paid note payable (Principal + Interest) with Check No 8441. Principal P 900.00;
Interest Rate – 30%.

Mar 16 Paid heating and lighting bill for the month of March amounting to P 800.00. Issued
Check No. 8442.

Mar 21 Received additional Investment from the owner amounting to P15,000. Cash Receipts
No. 26.

Mar 22 Payment for Inv. 416 – Starr Enterprises, P670.82. Less 2% discount. Issued check
No. 8443.

Mar 26 Paid advertising expense amounting to P450.00, Issued check No. 8444.

Mar 28 Paid telephone bill for the month of March amounting to P 950.00. Issued check No.
8445.

Mar 29 Paid miscellaneous expenses – P 275, Issued check no. 8446.

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Mar 30 Paid employees salary amounting to P 6,000.00 Issued check no. 8447.

Mar 31 Ms. Taylor withdrew cash amounting to P 3,000.00 for personal use. Issued check no.
8448.

10. End of Month Activities

After posting the monthly transactions, the following information is also available:
a. Expired insurance during the month P 250.00
b. Inventory of cleaning supplies on hand 2,000.00
c. Depreciation for the month:
Warehouse equipment 700.00
Office equipment 300.00
d. Accrues salaries 8,000.00

11. Display Purchase Order, Purchase Invoice, and Sales Invoice Registers for the
month of March.

12. Display the Special Journals (General, Purchase, Cash Payments, Cash Receipts,
Sales).

13. Display a Trial Balance.

14. Display the Income Statement, Statement of Owner’s Equity and Balance Sheet.

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