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11. Use the information below to update the Vendor Center. Use the date July 1, 2022, for vendors with an opening balance.

12. To complete the New Company Setup, record the following three journal entries on July 1, 2022:

a. Enter the opening balances (refer to Step 8 above). Also, when entering the opening balances, enter $26,700 as a credit to 3010, Jen Beck, Capital. Use Opening Bal as the Entry No.

b. Make a journal entry to reverse the Uncategorized Income account. Use Reversing as the Entry No.

c. Make a journal entry to reverse the Uncategorized Expenses account. Use Reversing as the Entry No.

Note: After you reverse the Uncategorized Income and Uncategorized Expenses accounts, you can make these accounts inactive in the Chart of Accounts List.

13. Display and print the following reports for July 1, 2022.

a. Journal

b. Trial Balance

14. Jen informs you that she has hired an assistant, Dave Saylor.

a. Activate the payroll feature, and then customize the payroll system default accounts below.

Account created by QuickBooks Change to

24000 Payroll Liabilities 2100 Payroll Liabilities

66000 Payroll Expenses 6560 Payroll Expenses

b. Create the following new general ledger accounts.

Other Current Liability, Subaccount of 2100 Payroll Liabilities:

2110 Social Sec/Medicare Tax Payable

2115 FIT Payable

2120 SIT Payable

2125 FUTA Payable

2130 SUI Payable

2135 SDI Payable

Expense, Subaccount of 6560 Payroll Expenses:

6565 Wages Expense

6610 Social Sec/Medicare Tax Expense

6625 FUTA Expense

6630 SUI Expense

6635 SDI Expense

c. Choose the manual payroll calculations option to activate the Payroll Item List. Then edit the following payroll items on the Payroll Item List:

Payroll Item

Federal Unemployment

Federal Withholding

Medicare Company

Medicare Employee

Social Security Company

Social Security Employee

For each payroll item, do the following:

 accept the name listed

 choose the United States Treasury as the agency to which the liability will be paid

 select the appropriate subaccounts for both the liability and expense accounts

 accept all tax rates

 accept all taxable compensation defaults

d. Add the following to the Payroll Item List:

Type: Wage (Hourly Wages)

Subtype: Hourly Wages

Name: Hourly Wages

Expense account: 6565 – Wages Expense

Type: State Tax (State Withholding)

Name: NY – Withholding

Agency for Liabilities: NYS Dept. of Revenue

Identifying number: 17-6158789

Liability account: 2120 – SIT Payable

Taxable compensation: Accept defaults

Type: State Tax (SDI) – State Disability

Name: NY – Disability Company/NY – Disability Employee

Agency for Liabilities: NYS Dept. of Revenue

Identifying number: 17-6158789

Liability account: 2135 – SDI Payable

Expense account: 6635 – SDI Expense

Company rate: 0%

Employee rate: 0.5%

Taxable compensation: Accept defaults

Type: State Tax (SUI) – State Unemployment

Name: NY – Unemployment Company

Agency for Liabilities: NYS Dept. of Revenue

Identifying number: ER – 158789

Liability account: 2130 SUI – Payable

Expense account: 6630 SUI – Expense

Company Tax Rate: 4.025% each quarter

Taxable compensation: Accept defaults

e. Add Dave Saylor to the Employee Center:

Legal Name: Dave Saylor

Social Security No: 137-29-2817

Gender: Male

Date of Birth: 05/13/1998

Marital Status: Single

Address: 1 Marine Way, New Hyde Park, NY 11040

Mobile: 516-555-0331

Pay Frequency: Biweekly

Earnings – Item Name: Hourly Wages

Hourly/Annual Rate: 10.00

Federal Filing Status: Single

Allowances: 1

State Worked: NY

Tax: SUI (Company Paid)

Tax: SDI

State Subject to Withholding: NY

Filing Status: Single

Allowances: 1

Other Taxes: No (delete all)

15. The following activity occurred during the month of July 2022. Set up or create additional preferences and files when needed and record the following transactions in the appropriate windows.

Jul 2 Received a six-month insurance policy renewal from General Insurance Co. for $1,200, paid immediately, Check No. 72. Jen recorded the first six-month policy as Insurance Expense, but you think it is better to record the second six-month policy as Prepaid Insurance on payment, and then adjust it at the end of each month.

Jul 2 Received a six-month advertising renewal from Ray Vill Advertising Agency for $900, paid immediately, Check No. 73. Jen also recorded the previous advertising as Advertising Expense, but like the insurance policy, you will record it as Prepaid Advertising on payment and then adjust it at the end of each month.

Jul 2 Recommended to the owner, Jen Beck, that she put some of the cash into a Money Market account that will earn interest. Jen agrees. Create the general ledger account 1030 Money Market and transfer $7,000 into the account.

Jul 3 Purchased $500 of office supplies on account from the Office Supply Store, Invoice No. 285, Net 30 Days. Jen previously recorded this type of purchase as Supplies Expense, but you record it in the asset account Office Supplies.

Jul 3 Purchased 25 cans of tennis balls from Sporting Goods, Inc., at $2 per can, paid immediately, Check No. 74.

Jul 4 Provided 2 hours of tennis lessons (owner) at $25 each and 2 hours of tennis court services at $30 each on account to the Davis Family, Invoice No. 1150, Net 30 Days.

Jul 5 Sold 4 tennis racquets for $100 each and 4 tennis outfits for $80 each on account to the Grisham Family, Invoice No. 1151, 2/10, Net 30 Days.

Jul 5 Received full payment from Whitestone Seniors Club, Check No. 1587.

Jul 5 Paid in full AGI Telephone Co., Check No. 75.

Jul 6 Recorded the cash sales for the week for 15 hours of tennis lessons (owner) at $25 each, 32 hours of tennis court services at $30 each, and 15 cans of tennis balls at $4 each, Sale No. 551.

Jul 9 Received the telephone bill from AGI Telephone Co., Invoice No. 809, $150, Net 30 Days.

Jul 9 Received payment in full net of discount from Bayside Youth Group, Check No. 11725. Use the Discounts and Credits button to apply the discount. If the Discount and Credits button is not displayed, open the Create Invoices window, go to the Bayside Youth Group Invoice, and enter 2/10, Net 30 Days in the TERMS field.

Jul 9 Paid in full Racquets, Inc., Check No. 76.

Jul 9 Paid in full Tennis Suits, Inc., Check No. 77.

Jul 11 Provided 2 hours of tennis lessons (owner) at $25 each and 2 hours of tennis court services at $30 each on account to the Davis Family, Invoice No. 1152, Net 30 Days.

Jul 12 Received full payment from Lakeland Community Group, Check No. 6952.

Jul 12 Purchased 7 tennis racquets at $50 each on account from Racquets, Inc., Invoice No. TR712.

Jul 12 Purchased 5 tennis outfits at $40 each on account from Tennis Suits, Inc., Invoice No. TO1478.

Jul 12 Received full payment net of discount from the Grisham Family for Invoice No. 1151, Check No. 708. Use the Discount and Credits button to apply the discount.

Jul 13 Received a credit memo for 2 tennis racquets at $50 each returned on account to Racquets, Inc., Invoice No. CM-TR712.

Jul 13 Provided 10 hours of tennis court services at $30 each on account to the Lakeland Community Group, Invoice No. 1153, Net 30 Days.

Jul 13 Provided 6 hours of tennis court services at $30 each on account to the Whitestone Seniors Club, Invoice No. 1154, Net 30 Days.

Jul 13 Sold 10 tennis racquets at $100 each and 10 tennis outfits at $80 each on account to Bayside Youth Group, Invoice No. 1155, terms 2/10, Net 30 Days.

Jul 13 Recorded the cash sales for the week for 14 hours of tennis lessons (owner) at $25 each, 37 hours of tennis court services at $30 each, 15 cans of tennis balls at $4 each, and 4 tennis racquets at $100 each, Sale No. 552.

Jul 13 Created account 1020 Cash – Payroll account. Transferred $1,800 from the Cash – Operating account to the Cash – Payroll account.

Jul 13 Created the paycheck for Dave Saylor for his first two weeks working at Jen’s Tennis Courts, pay period ending July 11, 2022. Recorded the following paycheck details (if you receive messages about additional taxes, click X and Yes to close each message):

Pay Period Ends: July 11, 2022

Check Date: July 13, 2022

Bank Account: 1020 Cash – Payroll

Check Number: 101

Hours: 80

Company Summary:

Social Security Company: 49.60

Medicare Company: 11.60

Federal Unemployment: 4.80

NY – Disability Company: 0

NY – Unemployment: 32.20

Employee Summary:

Federal Withholding: 52.00

Social Security Employee: 49.60

Medicare Employee: 11.60

NY Withholding: 40.00

NY Disability – Employee: 1.20

Jul 13 Deposited all cash receipts and checks for the first half of the month of July.

Jul 13 The owner, Jen Beck, withdrew $2,000 cash for personal use, Check No. 78. Memorize the transaction for payments every two weeks. Next payment is July 27, 2022.

Jul 14 Purchased 25 cans of tennis balls at $2 each from Sporting Goods, Inc., paid immediately, Check No. 79.

Jul 14 Received full payment from the Davis Family for Invoice No. 1150 and Invoice No. 1152, Check No. 555.

Jul 14 Jen was awarded the contract to provide tennis lessons to the Springfield Gardens Teen Club. There will be three levels: beginner, intermediate, and advanced. They will be provided 30 hours a week in lessons. Jen will provide 10 hours of lessons and Dave will provide 20 hours of lessons. You decide to use time tracking for this contract.

a. Enable the Time-Tracking feature and choose Tuesday as the first day of the workweek.

b. Add the New Customer:

Customer Name/

Company Name: Springfield Gardens Teen Club

Full Name: Erica Baynes

Main Phone: 718-555-1140

Invoice/Bill To: 150 Westgate St.

Springfield Gardens, NY 11413

Payment Terms: Net 30 Days

c. Add the following three jobs to Springfield Gardens Teen Club:

Job Name: Beginner Level

Intermediate Level

Advanced Level

Job Info: (for all three jobs)

Job Description: To provide tennis instructions based on level.

Job Status: Awarded

Start Date: 07/12/22

Projected End: 07/26/22

d. On the Item List, add a new item:

Type: Service

Item Name/Number: Tennis Lessons Fees – Assistant

Description: Tennis Lessons Fees – Assistant

Rate: $20 per hour

Tax Code: Non-Taxable Sales

Account: 4020 Tennis Lessons Fees Earned

Jul 18 Provided 2 hours of tennis lessons (owner) at $25 each and 2 hours of tennis court service at $30 each on account to the Davis Family, Invoice No. 1156, Net 30 Days.

Jul 18 Received full payment from Whitestone Seniors Club for Invoice No. 1154, Check No. 1597.

Jul 19 Received the utilities bill from Local Power Company and paid it immediately, Check No. 80, $200

Jul 20 Recorded the cash sales for the week for 16 hours of tennis lessons (owner) at $25 each, 39 hours of tennis court services at $30 each, 15 cans of tennis balls at $4 each, 2 tennis racquets at $100 each, and 2 tennis outfits at $80 each, Sale No. 553.

Jul 20 Recorded hours for tennis lessons on the weekly timesheet for the Springfield Gardens Teen Club for the first week as follows:

Jul 22 Received full payment net of discount from Bayside Youth Group, Invoice No. 1155, Check No. 11775.

Jul 22 Purchased 5 tennis racquets at $50 each on account from Racquets, Inc., Invoice No. TR722.

Jul 25 Provided 2 hours of tennis lessons (owner) at $25 each and 2 hours of tennis court services at $30 each on account to the Davis Family, Invoice No. 1157, Net 30 Days.

Jul 25 Received full payment from Lakeland Community Group, Invoice No. 1153, Check No. 6965.

Jul 27 Provided 10 hours of tennis court services at $30 each on account to the Lakeland Community Group, Invoice No. 1158, Net 30 Days.

Jul 27 Provided 6 hours of tennis court services at $30 each on account to the Whitestone Seniors Club, Invoice No. 1159, Net 30 Days.

Jul 27 Sold 2 tennis racquets at $100 each and 2 tennis outfits at $80 each on account to the Cheung Family, Invoice No. 1160, 2/10, Net 30 Days.

Jul 27 Recorded the cash sales for the week for 18 hours of tennis lessons (owner) at $25 each, 40 hours of tennis court services at $30 each, 15 cans of tennis balls at $4 each, and 2 tennis outfits at $80 each, Sale No. 554.

Jul 27 Recorded the tennis lessons hours on the weekly timesheet for the Springfield Gardens Teen Club for the second week as follows:

Jul 27 Created three invoices for the Springfield Gardens Teen Club: Beginner Level, Invoice No. 1161; Intermediate Level, Invoice No. 1162; and Advanced Level, Invoice No. 1163; for the period July 12, 2022–July 23, 2022, Net 30 Days. (Remove the checkmark next to Email Later, if necessary.)

Jul 27 Created the paycheck for Dave Saylor for the pay period ending July 25, 2022. Dave worked a total of 80 hours of which 40 hours were at the Springfield Gardens Teen Club (those hours will flow into the payroll from the timesheet) and 40 were at Jen’s Tennis Courts (those 40 hours you must enter in the Preview Paycheck window). The paycheck details are as follows:

Pay Period Ends: July 25, 2022

Check Date: July 27, 2022

Bank Account: 1020 Cash – Payroll

Check Number: 102

Hours: 80

Company Summary:

Social Security Company: 49.60

Medicare Company: 11.60

Federal Unemployment: 4.80

NY – Disability Company: 0

NY – Unemployment: 32.20

Employee Summary:

Federal Withholding: 52.00

Social Security Employee: 49.60

Medicare Employee: 11.60

NY Withholding: 40.00

NY Disability – Employee: 1.20

Jul 27 Paid the payroll liabilities owed to the United States Treasury for the period July 1–27, 2022, Check No. 103. Use 1020 Cash – Payroll.

Jul 27 Received the bill for the monthly mortgage payment of $425 from Daly’s Mortgage Corp., paid immediately, Check No. 81. Record $265 as a reduction of the Mortgage Payable, and $160 as Interest Expense. Memorize the transaction for monthly payments. Next payment is August 27, 2022.

Jul 27 The owner, Jen Beck, withdrew $2,000 cash for personal use, Check No. 82. Recall the memorized transaction.

Jul 30 Recorded interest income earned on the Money Market account, $12. (Use the Make General Journal Entries window, ENTRY NO. Int Income; this is not an adjusting entry.)

Jul 30 Paid Office Supply Store, Invoice No. 285, Check No. 83.

Jul 30 Paid Racquets, Inc., Invoice No. TR712 and Invoice No. CM-TR712, Check No. 84.

Note: In the Pay Bills window, after selecting Racquets, Inc., Ref. No. TR712, click the Set Credits button to select the $100 CM-TR712, and then click Done.

Jul 31 Paid all sales tax owed to NYS Dept. of Revenue for the month, Check No. 85.

Jul 31 Deposited all cash receipts and checks for the second half of the month of July.

Jul 31 Transferred $5,000 from the Cash – Operating account to the Money Market account.

Jul 31 You submitted your bill to Jen’s Tennis Courts for the following services rendered: 1) set up the accounting records in QuickBooks; 2) recorded the transactions for the month of July, including month-end activity; and 3) printed the management reports, accounting reports, and financial statements through July 31, 2022. You charged $2,000 for services rendered, Invoice No. JTC0731. Create your vendor account, [Your Name] Accounting Services, Net 30 Days, in Jen’s Tennis Courts accounting records and then record the bill.

16. Prepare the bank reconciliation for the Cash – Operating account.

a. The balance on the bank statement as of July 31, 2022 was $3,394.92.

b. There was a service charge of $15.00.

c. Check Nos. 83, 84, and 85 were outstanding.

d. A check for $762.05 from the Grisham Family included in the July 13, 2022 deposit bounced. Create an NSF item on the Item List using the information below and then record the NSF item:

Type: Other Charge

Item Name/Number: NSF

Description: Non-sufficient funds

Tax Code: Non-Taxable Sales

Account: 1010 Cash - Operating

e. Print the Bank Reconciliation Detail report.

17. Display and print the following reports for July 1, 2022–July 31, 2022:

a. Journal

b. Trial Balance (before adjustments)

18. Record the following adjusting journal entries for July 31, 2022. Number the adjusting journal entries AJE1, AJE2, and so on:

a. Record one month of insurance expense.

b. Record one month of advertising expense.

c. Office supplies on hand totaled $420.

e. Depreciation for the Furniture for the seven months ending July 31 is $450.

f. Depreciation for the Equipment for the seven months ending July 31 is $600.

g. A review of the inventory reveals that two tennis outfits were damaged and needed to be discarded. Adjust the inventory account. Use Inv Adj as the reference.

19. Save and submit the following reports for July 1, 2022–July 31, 2022 (make sure they are each labeled):

a. Customer Balance Detail

b. Vendor Balance Detail

c. Inventory Valuation Detail

d. Payroll Transaction Detail

e. Profit & Loss by Job. Filter the report by Name, then choose Springfield Gardens Teen Club.

f. Journal (July 31, 2022) Filter the report, using Transaction Type and Multiple Transaction Types, to display only the adjusting journal entries (Journal) and the inventory adjustment (Inventory Adjustment).

g. Adjusted Trial Balance

h. Profit & Loss Standard (January 1, 2022–July 31, 2022)

i. Balance Sheet Standard (July 31, 2022)

20. Make a backup copy of the company file on a removable storage device and store it in a safe place.

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Comprehensive Problem