ST.

MARY'S COLLEGE

DEPARTMENT OF ACCOUNTING

PROJECT WORK ON
Introduction to Computerized
Accounting

P r e p a r e d by : t h e D e p a rt m e n t of A c c o u n t i n g
St. Mary's College

January 28, 2006

 Computerized Accounting
Comprehensive Project
Exercise-1 Maintaining Company

1. Introduction

MYBA (Manage Your Business Adequately) is planning to purchase and install Peachtree
Accounting Software Packages for handling its financial affairs and related data. It will start
using the software to handle its financial affairs including payroll and fixed asset data in June
30, 2005. The company’s fiscal year starts on July1 and ends on June30. The following
sections provide additional information about the firm and its activities.

Company Background

Name: MYBA Plc

Business type: Registered partnership

Line of business: Retail: -buying and reselling electronic materials

Address: Ethiopia, Addis Ababa City Government

Bole Kifle Ketema, Kebele 17, house No. 2540l
Tel. +251-22-987000, Fax +251-22-987000

Chart of accounts: The firm wants to setup its own chart of accounts.

Accounting method: The firm buys and sells goods and services virtually on credit
basis and want to use the accounting method which best handles
its financial affairs and provide an accurate, fair and timely
financial information.
 Posting method: The firm wants to use the batching posting method.

Accounting periods: The firm wants to prepare Annual financial statements.(Doesn’t

match the calendar year)

Required: Based on the above data, create and setup MYBA Plc Note that, the word
“MYBA” represents your name.

2.User ID and passwords

You are assigned as an administrator of the Peachtree Accounting Software the company
maintains for recording and reporting its financial affairs. You should use your full name as
both your user ID and Password.

Below is list of employees whose jobs are directly related with PCASP, and their related ID
and passwords.

User Pass General

No. Name Duties Control level
ID word Duties
1 Auna AN admi administrato maintain user ID and full control over all PCASP
 n r password program areas
full control over all payroll
2 Buna BN 12pb payroll clerk prepare monthly payroll
tasks
perform all tasks related to full control over all purchase
purchase purchase tasks
3 Cuna CN 12pp
clerk gather inventory status and  read inventory reports only
sales data read sales reports only
perform all tasks related to full control over all inventory
inventory inventory tasks
4 Duna DN 12ID
clerk collect purchase and sales read purchase reports only
data read sales reports only
perform all sales related  full control over all sales
tasks tasks
5 Euna EN 12se sales clerk
collect purchase and read inventory reports only
inventory data read purchase reports only
maintain chart of accounts
full control over all general
6 Funa FN 12glf GL clerk maintain prior period
ledger tasks
adjustments
maintain company
information full control over all system
7 Guna GN 12SG system clerk
backup and restore tasks
company

Note: All users are “Active”. And all users, except Auna, the administrator, should not have
access to the “maintain user” window.

Required: Based on the above data, set up user records.

2. Additional requirements
i. Change the existing company name to a name consisting of the first names of the members
of your group and the word MYBA"..
 ii. Replace the administrators (Auna's) user ID by the first words making up the new name of
the company. For example, if the new name of the company is your name, the
administrator's user ID will be your name

iii. Change the posting method to “real-time”.

3. Audit trial
The firm wants to trace any activities performed in its Peachtree Accounting company records
through all possible options the program provides.

Required: Activate the “use audit trial” option

Note: Before performing the following activities, close your company and reopen it
using the user ID and password you have maintained earlier.

4. Chart of Accounts

Budget Balance
Particular Account ID
July1,2005 June30,, 2005
Cash at Bank 111A1 200000 110,000
Cash on Hand 111A2 50000 55,000
Notes Receivable 112A2 20000 19800
Account Receivable 113A3 300000 220,000
Allowance for Uncollectible 113A3C 20000 13200
Merchandise Inventory 114A4 3000000 2,970,000
Prepaid Insurance 115A5 40000 22,000
Advances to Employee 119A9 50000 44,000
Computers 116A6 800000 440,000
Accumulated Depreciation-computers 116A6C 30000 16.500
Vehicles 117A7 600000 550,000
Accumulated Depreciation-vehicles 117A7C 500000 27500
Other Fixed Assets 118A8 1000000 990,000
Accumulated Depreciation-other fixed 118A8C 50000 49500
assets
Accounts Payable 211A1 40000 37400
Salary Payable 212A2 - --
Employee PFC Payable 213A3 - --
Employer PFC Payable 214A4 - --
Employer Employee Tuition Fee Payable 219A9 - --
Employee Income Tax Payable 215A5 - --
Employee Bank Loan Payable 216A6 - --
Employee Union Due 217A7 - --
Sales Tax (VAT) Payable 218A8 - 6600
Common Stock ($100 par) 311A1 - 4,400,000
Additional Paid-in Capital 312A2 - 550,000
Retained Earnings 313A3 - 391,000
Treasury Stock 314A4C - 430100
Sales 411A1 - --
Sales Discounts 411A1C - --
Sales Returns and Allowances 411A2C - --
Interest Income 418A8 - --
Other Income 419A9 - --
Purchases 511A1 - --
Purchases Discounts 511A1C - --
Purchases Returns & Allowances 511A2C - --
Cost of Goods Sold 512A2 - --
Salary Expense 611A1 - --
Payroll Expense 612A2 - --
Supplies Expense 613A3 - --
Insurance Expense 614A4 - --
Utility Expenses 615A5 - --
Income Tax Expense 616A6 - --
Miscellaneous Expenses 619A9 - --
Note that you may add new accounts when the need for doing so arises.

Required: Based on the above data, setup the chart of accounts for the company and allocate
the given budget
5. Vendor Information
 The company buys goods and services from different vendors/suppliers both on cash and credit
basis. Majority of its vendors allow the company to buy goods and services worth up to
$1,450,000 on credit and earn a 2% discount if invoices are paid within 15 days from the date
of purchase or else pay within 35 days. The company wants to record information about the
office manager of each of its vendors. The company uses the Purchases Account No. 511A1
to record all purchases of goods from vendors, while it records purchases of utility services in
the Utility Expenses Account No. 615A5. Purchase discounts taken are recorded in the
Purchase Discounts Account No. 511A1C while Purchases Returns and Allowances are
recorded in Purchases Returns & Allowances Account No. 511A2C. The company allowed its
vendors to deliver goods and services in the best ways possible. The company wants to age
vendor invoices by due date. The invoices are to be categorized as follows; 0-35, 36-71, 72-
127, and over 127 days overdue in categories I, II, III and IV, respectively. Besides, the
company has special agreements with the following vendors.

Vendo Vend Contact/

Address /Vendor Beg.
r Name or Office Terms
since/ Balance
ID type Mgr
11EE Ethiopian Servic Ato KIBE Addis Standard Jan 4, $2400
Electric Power e Ato Ababa 1995 Bill #01
Corporation LEMA W14 K52 Invo#09
Tel. 8
1234567
EtAiopia
12ET Ethiopian Servic W/ro Addis Mainly Mar 6, $4,000
Telecommunica e nunu Ababa prepaid 1999 Inv. #
tion Ato abebe W01 K18 22
Corporation Tel. Bill # 91
6666666
EtAiopia
13AIE VJ Goods Mr. jkl OklaAama 3/30, n/60 Jun 9, $15,000
Import-Export M/SSuzi A2 Pun $2 million 2001 Inv. #
Share Road 36
Company Tel. PO #
6565656 512
AIE@japan
.A
Japan
14EB GK Goods Ato alemu Addis 2/10, n/45 Jan 4, $13,000
G Business W/ro Ali Ababa $1.5 million 2000 Inv. #
Group W28 K02 92
Share Tel. 222222 PO #
Company EtAiopia 012
15FIR Federal Inland Tax Ato Addis Due on tAe ---$3000
A Revenue benyam Ababa 9tA Jun 7, Invo#95
Authority W/ro W13 K22 day - next 1999
hiwot Tel. montA
1111111 No credit
EtAiopia limit
Note: All vendors are active and all vendor-beginning balances are as of July1, 2005.

Required: Based on the above data, maintain vendor defaults information and vendor records
(10 marks).
6. Sales Tax Authority

The company collects 15% VAT (description: Federal Value Added Tax) and submit the sum
collected to the Federal Inland Revenue Authority (ID: 15FIRA). Thus, it has one Sales Tax
Code-FVAT (Federal Value Added Tax). Taxes collected from customers are recorded in the
Sales Tax (VAT) Payable Account NO. 218A8. VAT is not payable on freight charges.
 Required: Based on the above data, setup sales tax authority and code (5 marks).

7. Inventory Information
The firm buys and sells 3 inventory items, which are all stock items, and LIFO is considered to
be the default inventory costing method. All inventory items are subject to VAT. The company
uses the Merchandise Inventory (114A4), Sales (411A1) and Cost of Goods Sold (512A2)
accounts to record transactions related to inventory items. The Miscellaneous Expenses
Account No. 619A9 is used to record delivery costs. Inventory items are received from vendors
through the appropriate and best method of delivery. The company wants to record additional
information related to alternative vendors and substitutes (subst.) of all its inventory items. At
present the company uses two price levels named Wholesale (W) and Retail (R) but has the
plan to use additional three price levels at which its inventory items are offered for sell. The
current price levels need no calculation.
Given below is additional information related to the inventory items the company sells.

Vendor Beg. Bal. Min.

Subst. Price stock
Item Item Last/
Description (Bran Levels and
ID Preferred Type Unit Unit
d) (W/R) Reorder
cost
Q.
21D Computer GKlBusiness Office Acer $990000 Lastcost+100 100
C Group Share Co. Machine ??? .0 Last cost + 1,000
200
22T Television House Sharp $990000 Last cost 100
V Machine +300 2,000
VJ ??? Last cost
Import-Export +400
23T Tape recorder Share Co. House Sony $990000 Last cost +50 300
R Machine ??/ Last cost 3,000
+100
All inventory items are measured in pieces and stored in WareAouse-10.Beginning balances
are as of December 31, 2004.

Required: Based on the above data, maintain inventory default information and inventory
records (10 marks).
 8. Customers information
The company sells goods to its customers both on cash and credit basis. Sales and related
discounts are recorded in the Sales Account No. 411A1 and Sales Discounts Account No.
411A1C, respectively. Finance charges on overdue accounts are recorded in the Interest
Income Account No. 418A8. All credit customers, except those having special agreements
with the company, are required to settle their obligations for goods bought on credit within 32
days from the date of each credit sales invoice. They are entitled to 3% discount for payments
within 14 days from the date of each credit invoice. The credit limit is set at $500,000 per
credit customer. All customers failing to pay within the credit period (42 days) are subject to
5% interest on balances up to $15,000 and 8% interest on balances above $25,000. The
minimum finance charge is determined to be $10. The company does not charge interest on
finance charges. Finance charges are included and explained in customer invoices and
statements as Fiancé charges. The following warning message is declared in customer
statements and invoices; “Let’s keep our relationship smooth by timely discharging our
respective duties!” At present, the company accepts only cash and checks as payment
methods. The company wants to record information about the second contact, office manager
and establishment (est.) date of each of its customers. Customer invoices are age by due date
and are to be categorized as follows; 0-45, 46-90, 91-120, and over 120 days overdue in
categories I, II, III and IV, respectively. Deposit Ticket ID is assigned to collections from
customer at the time of collection. Besides, the company has special agreements with the
customers included in the following table. Wholesale prices are offered to these customers.
Goods are delivered to customers via means preferred by each customer. All customers reside
in Ethiopia.

Cus Contact Addresses

Cust t. Off. Beg. Cust. since &
Name Terms
. ID Typ 1st 2nd Bill to Ship to Mgr Balance Est. date
e
31E Snap R5 Ato W/rt W14 W14 1/15, Ato $20,000 Jun 4, 1999
S Pvt Co Nari Nini K52 K52 n/60 Bekre Invo#30 Jan 2, 1995
ANo. ANo. $800,00
123 124 0
Tel. Tel.
1234 1235
Assosa Assosa
32M LLL R1 Ato Ato W01 W01 Standard Ato $76,000 Jul 6, 1999
M Music Ali Kulu K18 K19 Mulu Inv. # 36 Feb 7, 1994
Shop ANo. ANo. PO # 11
369 2A4
Tel. Tel.
1111 2222
Mekelle Axum
33A GKL R4 W/ro Ato W14 W14 1/10, Ato $75,000 Dec 9, 2001
P Printer Num Laku K12 K12 n/45 Amro Inv. # 82 Mar 4, 2000
s ANo. ANo. $900,00 PO # 39
666 999 0
Tel. Tel.
6543 6555
Jimma Agaro
34B HJP R2 W/rt Ato W20 W21 2/15, W/ro $49,000 Jan 4, 2000
T Busine Lawa Tufa K02 K13 n/30 Tiru Inv. # 52 Feb 9, 1990
ss ANo. ANo. $700,00 PO # 99
Group 321 322 0
Tel. Tel.
1122 1213
Assayta Semera

Note: All customers are active and all beginning balances are as of December 31, 2004.

Required: Based on the above data, maintain customers default information and customer
records).

9. Employee information
Below is information related to employees of the company.
  Pay levels/Compensation-all employees receive the following monthly compensation
except - NIBA who is paid on hourly basis for his regular and overtime compensation.
 Basic salary
 Taxable allowance
 Nontaxable allowance
 Overtime
 Bonus (new year bonus amounting to 10% of basic salary, NIBA bonus is Birr 80)

 Deductions-the following are monthly deduction from each employees gross salary
 Income tax according to Schedule-A of the Ethiopian Income Tax Proclamation No.
286 of 2002.
 Permanent Employee Provident fund (7% of basic salary)
 Permanent Employee Labour Union Due (2% of basic salary)
 Bank loan
 Employer contributions
 Permanent Employees Provident fund (16% of basic salary)
 GL accounts - select the appropriate GL accounts to record payroll related transactions.
 Employee custom fields - the company wants to keep information related to each
employee’s position and employment status in the company, birthday, educational
qualification and marital status.
Table-2 below provides additional data related to employees of the company.

Custom Fields Pay Levels (Birr) Other

Basic Monthly
Status Salary Allowance Deductions
Employ Ove
Educati (Regula (Birr)
ee ID Birthd r-
Position on r hrs) Ban
Name ay tim Tax Non- Advan
Qualif. Emplo Marita k
e - taxa ce
y. l Loa
able ble Salary
n
11A G. 02/12/ Perman Marrie 1,00
Girma ,MBA 6,000 -- 800 400 --
B Manager 71 ent d 0
12C Personne 13/09/ Perman Marrie
Lemma MARM 4,500 -- 600 500 300 200
D l 78 ent d
13F Account 07/06/ Perman
Hiwot ACCA Single 3,000 500 300 200 -- 100
G ant 80 ent
Alemu 14T Purchase 26/07/ Diploma Perman Marrie 2,400 400 300 200 -- 200
 Y r 83 ent d
Secretar 19/01/ Perman Marrie
Vishnu 15JK Diploma 1,800 200 300 200 -- --
y 81 ent d
Office 22/03/ Tempor (100 40
NIBA 16SZ 10+2 Single 300 200 -- --
boy 85 ary hrs) hrs
Table-2 Employee Profile
Additional Information
1. All employees were hired on December 30, 2004.
2. NIBA’s average hourly compensation rates for regular and overtime work are Birr 10
and Birr 15, respectively. Besides, the company pays Birr 400 monthly tuition fee for
NIBA
3. The company's employee provident fund plan is maintained with Commercial
Nominees Plc.
4. All permanent employees of the company, except Girma -the GM, make monthly
contribution to the Ethiopian Labor Union of employees of private companies.
5. The company regularly remits employee withholding, including income tax, provident
fund contribution, union due and bank loan, to the appropriate institutions within 15
days of the month next to the salary month.
6. All employees dwell in an apartment the company leased for the same purpose. The
apartment is located at Addis Ababa, Bole Kifle Ketema, Kebele 12, Bole Road. The
residents use common telephone line -12121212- with extension numbers starting from
111 for Girma to 116 for NIBA.
Required: Based on the above information complete all the necessary payroll procedures and
generate payroll register for the month ended july30, 2005. (Note that
compensation information given on Table-2 above is for the month of JUlY 2005.)
Note that you should create all the necessary company payroll tax tables using your own Tax
ID and Name.
10. Fixed Assets
The following table provides data related to fixed assets of the company.

Economic Date
Serial Savage Depreciation
ID Description Cost Life In-
No. Value Acquired Method
(years) service
001 1CC Computers 400,000 20,000 5 06/22/04 06/30/04 DBMMS
002 1VV Vehicles 500,000 80,000 10 03/14/04 03/28/04 DBMMS
003 1BB Buildings 100,000 15,000 20 01/07/05 01/07/05 SLMM
004 1FF Furniture and Fixtures 40,000 5,000 10 01/07/05 01/07/05 SLMM
005 1LL Land 150,000 - - 01/07/05 01/07/05 -
006 1MM Other Fixed Assets 900,000 120,000 10 01/15/04 02/15/04 SLFM
Note:
 All fixed assets are to be used for only business purposes.
 Life-to-date depreciation is equal to the depreciation balance given as of December 31,
2004 in the chart of accounts of the company.
 No investment tax credit is offered on fixed assets.
 The depreciation method given in the above table is applicable starting from july 1, 2005.
 You should create additional fixed asset accounts when necessary.
 Other fixed assets refer to fixed assets, which cannot be categorized as computers,
vehicles, buildings, land or furniture and fixtures.

Required: Based on the above data and using Peachtree Fixed Assets Program maintain
fixed assets records for the company.

Note that you should select the appropriate GL accounts for recording fixed asset related
transactions and specify your own location and department for the fixed assets.

11. Transaction and related events

Record the following Sales transaction for the month of July

July 1. Sold 5 computer to Snap PVTCo @W. price level, invoice # 0001, including 15 % vat

July 4. Sold 3 Tape recorder on account to LLLmusic shop @R. price level by Invoice #0002
plus 15 % vat. And you want to give the company a phone call on July 20, 2005, and this
specific transaction will be record in a new template created by the company where in the new
template Payment terms and freight amounts are hide. And you are asked to save it by
memorized id No 01.

July 6. Sold 100 Television to LLLmusic shop on account @W.price level invoice # 0004,
plus 15% vat, by using the new template the company produced on May 4 and save it by
memory id 02.

July 7. Sold 20 Computer to Snap PVt co @ R. price level , invoice # 0005, plus 15%Vat.
July 10. An agreement was signed b/n the company and HJP Business Group To issue 50
Computer A @W.price level to be shipped 3 times in a week on the basis of credit sale. And
the company decided to use a special invoice #for this sale starting from 01.including
15%VAT.

July12. The company sold 4 Tape recorder to JKL Printer co @ R.price level ,invoice #0006,
including 15%Vat

July 15. The company sold 5 Computer to JKL Printer and signed an agreement to ship 4 times
in a month, including 15% Vat and the company is using a special format for this sale, where
in the new invoice (Template) “Job “ and “Date”are Hide. And the company wants to send a
note for appreciation ”Thank you”

July20 The company sold 10 Television,40 Tape-recorded @W.price level 1, invoice

#0007including 15% vat. To a new customer CGH co, id 006.

July 22, The company sold 20 Units of a new Product @W.price level, invoice #
0008,including Vat, where the decription of the new product is JJJ id for the new product was
0024 and beginning balance of 1000 unit @50.

July 28 The Company sold the new product to GKL Printer @R. Price Level, invoice #0009,
including 15%vat.

July 29. The company sold to CGH co 40 Tape recorder, 20 computer and 10 Television
@W.price level , , including Vat, invoice #0008.

July 30 .An agreement to B/n the new customer CGHand the accompany for all product of the
company Each 20 Television to be shipped @W. price level Including15% Vat.

Record thee following Quotes/sales order for the month of July

July 1. Apply quotes to snap PVT Co for 100 computers @W. Price level,Qoute #1 Good
throu july 15,2005
July 5. Apply sales order to GKL Printers for 20 tape recorder,10 computer and 5 television
@W. price ,sales order #1,invoice #02

July 10 Convert quote 01 in to sales order #2

July 15 Apply quotes to LLL music shop for 20 computer @R.price level Quote #2,

July 20 Convert sales order #1&2 in to sales invoice #01&02

July 25 Convert quote # 2 in to sales invoice#03

July 27 Apply and enter quote to Snap Pvt Co for 100 Computer @R.Price level, quote #3 and
use your own template (when you form a template make sure that your template should not
have any payment terms including ship to and bill to add. And save it by using memorized
transaction Id 03.

July 28 convert Quote #03 in to sales invoice #04

July 29 Apply Memorized transaction #3 to HJP business group quote #4

July 30 Convert quote #4 in to sales invoice #05

Record the following Cash receipt Transaction for the month of July

July 10 Received cash on account from Snap PVT Co for half settlement of Invoice #0001,
Receipt #01 Depo tick #01 and Refer #01.

July 12 Received cash on account from LLLmusic shop for full settlement of Invoice
#0002,Recipt #02,Depotick#02 and Refre #02.

July 13 Cash sale to the cash customer for 200 computers @ R. Price level,Depo id.03, Recipt
#03,Refe #03

July 14 Received cash as additional investment in the business from the owners of the business
$5,000,000, Depo Id 04,Recipt #04,refer #04
July 16 Received cash on account from CGH for full settlements of Depo Id 05,Receipt
#05,Ref #05.

July 20 Received cash on account From JKL Printer for half settlements of Invoice
#0007,Depo Id 06,Recipt #06,Ref #06.

July 25 Cash sale to snapPvt Co 10 television @R.price level . Depo Id 07.Recipt #07.Ref#07

Record the following Purchase and related transaction for the month of July

July 1 Apply purchase order From GK Business group for5000 Computer @W.Price level,
purchase order #001.

July 2 Apply purchase order FromVJImport Export for 1000 Television @W. price level,
purchase order #002

July 3 apply purchase order FromVJImport Export co 2000 Computer/price level, purchase
order #003

July 10, Convert purchase order #002 in to purchase invoice #001

July 11 Convert purchase order# 001 in to purchase invoice#002

July 12 Convert purchase order #003 in to purchase invoice #003

July 15 purchase on account from FromVJImport Export for 40 Tape recorder @W.Price level,
invoice #004
.
July 20 purchase on account FromVJImport Export for 140 Television @W. Price level,
invoice #005.

July 22 Purchase on account From GK Business group 2000 Computer @w.Price level,
Invoice #006

Record the following cash payments Transaction For the month of July
July 23 Paid cash on account FromVJImport Export for invoice ##003,Check # 001

July 24. Paid cash on account to GK Business group for invoice #006. check #002

July 25 paid cash on account to GK Business group co for invoice # 002 ,Check #003

July 28 Rent is paid for the month of July .$2000, check #0004

July 29 Salary is paid for the month of July $30000.,Check#0005

Record the following Debit Memo and credit Memo for the month of july

July 7 Returned 50 television from sale of July 6 to LLL music shop because of some defect
on it .Credit memo#001.

July 23 Returned 500 computer to Gk business group because it has some defect when we
purchase on July 22 Debit memo#002

12.Bank Reconciliation

Bank Statement as of July 30, 2005

Checks Cleared
No. 01 $330,000
02 $820,000
03 $2,050,000
Deposits Received
Ticket ID 01 $20,500 $
02 $ 6,300
03 $ 840,000
04 $5,000,000

Debit Memos
Bank service charge………………. $300.00
NSF checks……………………….. 2,000,000.00
Commission on transfers…………. 600.00

Credit Memos
Collection of Note: $500,000 principal and $2000 interest

Bank balance, July 30, 2005………………………………………$1,167,900.00

Note that any discrepancies in deposit records and those related to checks are attributable to
the bank.

Required: Prepare statement of bank reconciliation for the month ended July30, 2005. (10
marks)