MINI Setting Up Accounting Records

PRACTICE for a Sole Proprietorship

SET 1
Canyon.com
Main Task Canyon.com Web Sites
Set up the accounting records
▲

Company Background: Whether you are

and perform the daily activities
interested in a Web site for your new hair
for Canyon.com Web Sites.
salon or a corporate intranet site, Canyon
Summary of Steps .com Web Sites can provide design, hosting,
and maintenance services for the small mom-
Open general ledger accounts.
▲

and-pop business and the multinational

Analyze, journalize, and post corporation alike. Jack Hines, owner of
▲

transactions. Canyon, is known for his unique and

dynamic presentations on the Web. His creativity and knowledge of
Prepare a trial balance.
▲

Web culture makes him a success in electronic content delivery.

Organization: Canyon is organized as a sole proprietorship. The
Why It’s Important business is fully owned and operated by Jack Hines.
You could one day work with Your Job Responsibilities: As Canyon’s accounting clerk, use the
▲

a sole proprietor as he or she accounting stationery in your working papers for these tasks.
starts a business from scratch. (1) Open a general ledger account for each account in the chart of
You might even open your accounts.
own business! (2) Analyze each business transaction.
(3) Enter each business transaction in the general journal, page 1.
(4) Post each journal entry to the appropriate accounts in the
general ledger.
(5) Prove the general ledger by preparing a trial balance.

CHART OF ACCOUNTS
Canyon.com Web Sites
ASSETS OWNER’S EQUITY
101 Cash in Bank 301 Jack Hines, Capital
105 Accts. Rec.–Andrew Hospital 305 Jack Hines, Withdrawals
110 Accts. Rec.–Indiana Trucking
REVENUE
115 Accts Rec.–Sunshine Products
130 Office Supplies 401 Web Service Fees
135 Office Equipment EXPENSES
140 Office Furniture
145 Web Server 505 Membership Expense
506 Telecommunications Expense
LIABILITIES
507 Rent Expense
205 Accts. Pay.–Computer Specialists Inc. 508 Utilities Expense
210 Accts. Pay.–Office Systems
215 Accts. Pay.–Service Plus Software Inc.

192 Mini Practice Set 1

192-193_MPS01_868829.indd 192 9/13/05 4:22:33 PM

 Canyon.com Web Sites (continued)
Complete the project using: Manual Glencoe Peachtree Complete QuickBooks
OR OR
Working Papers Accounting Software Templates

Business Transactions: Jack Hines, owner of Canyon.com Web Sites,

began business operations on May 1 of this year. During the month of May,
the business completed the transactions that follow. SMART GUIDE
Step–by–Step Instructions:
Date Transactions 1. Select the problem
set for Canyon.com
May 1 Jack Hines invested $50,000 in the business, Memorandum 1. Web Sites (MP-1).
2. Rename the company
2 The owner, Jack Hines, invested a desktop computer and printer and set the system
(Office Equipment) $3,500, Memorandum 2. date.
3. Record all of the
2 Issued Check 101 for $125 for the purchase of office supplies.
business transactions
3 Bought office furniture for $2,700 on account from Office Systems, using the General
Invoice 457. Journal Entry option.
4. Print a General
7 Bought a Web server from Computer Specialists Inc. on account for Journal report.
$35,000, Invoice WS4658421. 5. Proof your work.
6. Print a General
9 Received $1,000 from James Market for Web site services, Receipt 101. Ledger report.
11 Completed Web site design services for Andrew Hospital to be paid 7. Print a Trial Balance.
8. Complete the Analyze
later, Invoice 101, $3,000.
activity.
12 Bought software for the Web server (Web Server) on account from 9. Complete the Audit
Service Plus Software Inc., Invoice 876, $10,000. Test.
10. End the session.
14 Wrote Check 102 for $118 to pay the electric bill.
15 Jack Hines withdrew $2,500 for personal expenses, Check 103. QuickBooks
17 Completed Web site design on account for Sunshine Products, PROBLEM GUIDE
Invoice 102, $5,000.
Step–by–Step Instructions:
18 Bought a filing cabinet (Office Furniture) for $275, Check 104.
1. Restore the Problem
19 Received a check for $4,000 as payment for Web site maintenance for Mini Practice 1.QBB file.
one year to a client, Receipt 102. 2. Record all of the
business transactions
20 Provided design services on account to Indiana Trucking, Invoice 103 using the Make General
for $2,000. Journal Entries option.
3. Print a Journal report.
21 Prepared Receipt 103, $2,500, received on account, Sunshine Products. 4. Proof your work.
22 Paid $4,900 for telecommunication services for the period 5. Print a General Ledger
May 1–May 31, Check 105. report.
6. Print a Trial Balance.
22 Wrote check 106 for $3,333 to Service Plus Software Inc. as payment 7. Complete the Analyze
on account. activity.
8. Complete the Audit Test.
25 Sent Check 107 for $2,000 to Office Systems as payment on account. 9. Back up your work.
26 Received $1,000 for two months of Web services, Receipt 104.
27 Paid the dues for membership in the All Inclusive Group for $7,000,
Check 108.
30 Wrote Check 109 for the monthly rent $750.
30 Withdrew $2,500 for personal expenses, Check 110.
30 Sent Check 111 for $25,000 to Computer Specialists Inc., as payment
on account.

Analyze Compute the total of all the checks written during May.

Mini Practice Set 1 193

192-193_MPS01_868829.indd 193 9/13/05 4:22:58 PM