2 A/P- Case: Chai Tea Room Business BackgroundChai Tea Room serving specialty teas from all around world, also provides light lunches and superb dessert,coffee and other beverageChai Tea Room does not pay HST on its food purchase, but its other purchases subject to HST, and HST 13% is charged to customer on all good and service in cafe.To keep the cafe clean, their supplier “Sudbury Cleaning” do clean and wax the floor, and steam clean the carpets and furniture once a week.Instruction:Supplier InformationAccounting ProceduresOpen Invoice Accounting for Payable, not using General JournalDiscount: when payment term are set up correctly for supplier, and the date are entered correctly, discount are calculated automatically and credit to “ purchase discount”, contra expense account with credit balance and reduce overall expensesPurchase of Inventory Item and Cost of Good SoldFood purchased are recorded in inventory asset account, usually at month end, manager will count inventory and determine the value of item remaining in inventory. Then, manger will issue the memo to reduce the inventory (assets account) and charge the cost price to Cost of Good Sold (expenses account).
3 Chai Tea Room (1) Session Date: August 7,2013 #Input DateSource TypeSource CodeDescriptionAccounting Prodedure1August 1,2013Purchase InvoiceFG-642Purchase from Fundy Gift House, $800 plus $104 HST for eight tea services set, invoice total $904, term net 30Open-Invoice Accounting2BF-1243From Bathurst Food Supplies, $800 for bread, there is no HST on food products, term 1/10,n/30.Store as weekly recurring entryOpen Invoice Accounting,Recurring entry“ Recall Tool”August 7, 2013SC-701From Sudbury Cleaning Company, $250 plus $32.5 HST for weekly cleaning of store premise, purchase invoice total $282.5.Recurring Entry
4 Chai Tea Room (1) Session Date: August 7,2013 Input DateSource TypeSource CodeDescriptionAccounting Prodedure3August 2,2013Payment Cheque#171To Fundy Gift House, $700 in payment, to reference invoice #FG-361Accounting for Payment4August 3, 2013Cash Purchase InvoiceACA-3492From All Campus Ads, $200 pluse $26 HST for advertising brochures, term: due on receipt, paid by cheque #173Adding a New Supplier Record
5 Chai Tea Room (1) Session Date: August 7,2013 Input DateSource TypeSource CodeDescriptionAccounting Prodedure5August 4,2013Memo#13From Owner, adjust purchase invoice FG-642, the order recieved from Fundy House was 10 tea services, not 8 services, the invoice amount is $900 plus $117 HST.Change purchase invoice by open invoice method6August 4, 2013Payment Cheque#174The payment to Bathurst Food Supply, $792 in payment, including $8 discount for early payment, reference invoice BF-1044Accounting for earlier payment
6 Chai Tea Room (1) Session Date: August 14,2013 Input DateSource TypeSource CodeDescriptionAccounting Prodedure7August 8,2013Purchase Invoice#BF-2100From Bathurst Food Supplies, $800 for bread, there is no HST on food products, term 1/10,n/30.Recall restored entryRecall Restored entry8August 9, 2013Memo#14From Owner: Edit the supplier record for NB Gas to include the default expenses account, create a new Group account 5110 Heating expensesSet up or change supplier’s information
7 Chai Tea Room (1) Session Date: August 21,2013 Input DateSource TypeSource CodeDescriptionAccounting Prodedure9August 21,2013Purchase InvoiceSC-1790Cleaning company “ Sunbury Cleaning” $300 plus $39 HST for weekly service, purchase invoice total $339.Restore the changed entryChange a Stored Entry10August 21, 2013Memo#17From Owner: making adjusting entry to reflect inventory used in tea room during August, inventory was sold as following:Beverage inventory: $2200Food inventory: $3300All used inventory is charged to COST OF GOOD SOLD.Record month end inventory count and journal entry for COGS.
9 A/R- Case: AirCare Services Business Background: providing solar energy. Revenue come from installation, repair and subcontracting.Instruction:Customer InformationAccounting Procedures:Open Invoice Accounting for receivablesDiscount for earlier paymentNSF ChequesCash & Credit Card Sales of Services
10 AirCare Services (1) Session Date: May 8, 2013 Input DateSource TypeSource CodeDescriptionAccounting Prodedure1May 1, 2013Sales InvoiceA-710Sales To Selkirk Community Centre, $1800 plus $90 GST & $126 PST for removing and reapplying solar panels for roof replacement, term: 1/10, n/30Create a new account 4120 Repair revenueOpen Bill methodCustomize the Sales InvoicePreviewing Invoice2May 2, 2013Cash Receipt#20From Grande Pointe Tower, cheque#3499 for $8662 including $6662 in full payment of invoice #A-696 AND $2000 partial payment of invoice #A-698.Allowing $138 discount for earlier payment.Customize the journal by changing tabbing ordersCustomer Payment
11 AirCare Services (1) Session Date: May 8, 2013 Input DateSource TypeSource CodeDescriptionAccounting Prodedure3May 3, 2013Cash Sales InvoiceA-711Sales to Midwestern Funeral Home, $19000 plus $950 GST and $1330PST for installation solar panel.Term: cash on completion of workReceived cheque #394 for full paymentpayment4Sales InvoiceA-712To Hazel Estates, $1200 plus $60 GST & $84 PST for one year service contract*use Full Add fro new customerAdd new customer
12 AirCare Services (1) Session Date: May 8, 2013 Input DateSource TypeSource CodeDescriptionAccounting Prodedure5May 4, 2013Bank Debit Memo14321From Flatlands Credit Union, cheque #3499 for $8662 from Grande Pointe Tower has been returned because of non-sufficient fundReverse the payment and notify customer of outstanding chargeNSF cheque6Credit Card Sales InvoiceA-713Sales Summary from various customerRepair revenue: $3600Service contract revenue: $2800HST charge: $320 GST & 448 PSTCredit Card Sales
13 ASSISGNMENT 2- Due: Oct 17/18 Format: In Class Group ProjectRequirement: review the cases of todayChai Tea RoomAircare ServicesComplete all entries as per requestSubmission methodsSubmit in class with instructor’s reviewSubmit in backup format with your USB.
14 Midterm – Oct 17/18 Multiple Choices: 18x 4marks/question=72 Short Answers: 4x7marks/question=28Total Marks 100How to prepare?Install the Simply Accounting SoftwareDo sample exams, get yourself familiar with the each modules: General Journal, A/R, A/PFind your sample exam attached in your student account in Words Doc.Answers to Sample exam are blue colored.