accounting

Nick’s Landscaping Company (version A)

Introduction to Accounting in the 21st Century Gaber, Hayes & Porporato McGraw Hill  2014

Note: the project document files that accompany this project contain the information needed to complete the project.

Preface Nick Johnson has been working for years in an established company that is dedicated to minor construction projects in the external parts of personal or commercial residences. In the summer months the company does landscaping as well as minor construction projects such as interlock, retaining walls and flagstone installations, cement curbs and repairing driveways, sod and seeding as well as tree planting and organization of flower beds. In the winter months the company offers snow removal services. Nick is affected to summer operations; therefore he works shifts of 10 hours during 5 months while in the winter months he performs other minor jobs for other construction companies. After years of experience in the broad construction/landscape industry, Nick is convinced that if he opens his own company he will be able to make enough money to live the whole year avoiding the need to look for odd jobs in the winter months. With that idea in mind he sat down with his brother, Andrei, in their Newmarket house, crunched some numbers and decided to launch their own company: Nick’s Landscaping.

Description of the business Nick has the experience not only with doing minor construction projects and landscaping, but also and most importantly he knows how to manage the operation. He realized there might be a good market for his company in the area of the cities of King, Newmarket, Thornhill and Maple since many of the clients not taken by his former large company are from that area. Basically, large, established companies are not interested in taking projects with total bills under $10,000. This will be Nick’s niche market. In the winter of 2014, Nick decided to begin calling potential customers. Before starting the calls, he contacted Amy, the secretary at the large construction/landscaping company and asked if he could be provided the contact information of those clients that were not attended by the company. Amy asked the owners and it was decided that not only they would give the contact information of minor projects that were discarded in past years, but also will refer to Nick all new customers of small projects for a 10% fee calculated on the basis of the materials used for the project. Nick started to plan the control mechanisms he would use to track materials used and hours invested, also very important for him was to install the philosophy that a site is not left until the project is totally completed.

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Tools and Machines: Nick spent the rest of the winter identifying the equipment needed for the company, and since he has almost no money to buy new equipment he thought of calling some of his colleagues and invite them to either be partners or to be employees of his company but also to rent the use of their equipment for the time it is used. Nick has a van adapted to transport heavy material valued at $7,000, his brother has a pickup truck valued at $9,000. Nick also has some tools and small machines valued at $3,000. The only important piece of equipment that none of the brothers has is a machine to cut rocks/cement, but Greg, a colleague of them has it. Greg was not interested in being part of the company, but he agreed to be called as a qualified temporary employee for $30 per hour, plus $50 per hour when his cutting machine has to be used.

Share Capital For various tax and liability reasons, Nick and Andrei decided the business should be incorporated. On May 1st, Nick opened a bank account for Nick’s Landscaping Co. and deposited the $1,000 that were part of the capital contribution of Andrei. Nick contributed the van and tools and equipments while Andrei contributed also his truck. Nick and Andrei each received 1,000 shares of Nick Landscaping Co capital stock – 100% of the shares issued by Nick Landscaping Co. As could only happen in a fictional term project, Nick’s Landscaping Co. managed to become incorporated, obtain a business number, begin operations, obtain a short term loan from Peter, advertise its services, negotiate insurance and receive payment from its first customers, all on May 1st.

Equipment Nick expects the company will be able to use the van and pick-up truck for five years before they need to be replaced. When discharged the van could be sold for $1,000 but the pick-up can be sold as scrap for $600 maximum. All the other tools and equipment normally lasts for 10 years and will have no resalable value. Nick hoped that damage would be minimal; also he expected repair costs would be minimized as he planned to do most repairs himself.

Advertising Nick decided on a targeted advertising campaign: call all the people with small projects that were declined by the large landscaping company. In one afternoon he got six people asking him for a quote, he scheduled the visits for the next day. At the site visits he did the measuring and listened carefully to the customer’s requests. Then he went back to his van and with Andrei draw a draft blueprint of their work, estimated materials and hours needed and in less than 20 minutes they were back discussing the final price with the customer. Out of the six visits, four accepted the price and agreed to start as soon as possible.

Pricing Pricing is a tricky aspect of the business because if the quote is too high, the customer would not accept it, but if it is too low, the costs might not be covered and the company will go bankrupt. Nick and Andrei agreed that as a rule of thumb for the first projects, they will estimate materials needed plus a 10% of scrap, and on top of that they would

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add a markup of 100% to cover all other costs and their profit. However, for projects that are referred by the large company, they would charge a markup of 110% so they can pass on the fee of 10% over materials that the other company will charge. In May they received one referral for a $3,000 project in materials, while in June there were three more referrals for projects with $7,000 in materials. Both estimates for materials were approved by the owners of the large landscaping company. Materials management is a critical aspect of the business. Nick has a good business relation with the owners of Sam’s Materials who can supply all the construction materials they would need for their projects. Nick has worked out an agreement with Sam’s Materials that will allow him and Andrei to pick up whatever they need whenever they need it and pay for all material twice per month: on the 15th and at the end of the month. This agreement allows Nick’s Landscaping to have no inventory of material, because everything picked up from Sam’s Materials is immediately installed in the customer’s premises.

Employees Nick and Andrei estimate that they can do most of the work, however they will need to hire two employees: Greg and his machine when interlocking is part of the project and a non-qualified labourer who will prepare the site the day before Nick and Andrei start working (he would perform tasks such as removing grass, old interlocking, rocks, etc). Nick and Andrei have a younger cousin that drop out from high school and is doing odd jobs, so they call him and he accepted. Greg and Rob, the younger cousin, agreed with Nick’s reasoning that paying them by hour worked, rather than a monthly salary, would encourage them to minimize the time invested in each project so they can move fast between projects and maximize income which in turn will also increase customer satisfaction. Workplace regulations required vacation pay be accrued at 4% of the wages. Nick assured Greg and Rob they would receive their accrued vacation pay when they took a vacation, quit or the season ends.

Insurance: Nick negotiated an all perils, five- months insurance policy, effective beginning May 1st, 2014, with RiskIt Insurance. The policy is for the five months that the company will work in customers’ premises. Due to the weather, landscaping projects can be executed only between May and September. In some years when the fall is not cold, some work can be done in October, if that’s the case in 2014, RiskIt would extend it for one more month but Nick would have to pay the extra month at the same rate.

Phone system and mailing address Nick had a phone line with voicemail installed at home. Nick used this phone number and his home address for all Nick’s Landscaping business. Cell phones were also purchased, one for Nick and one for Andrei, and customers were given both numbers when they agreed on a project and its price. In order to get a discount price on the phones, Nick’s Landscaping signed a two year contract. Phone equipments are estimated to last for two years and to have no resale value at the end of their useful life. Nick authorized the bank to make an automatic withdrawal from the company’s bank account to pay the phone company when amounts were due.

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Need for an information system Nick was no accountant but he was sure that financial statement preparation was the least of his record-keeping worries. He knew he needed a system of recordkeeping and operating procedures that would assist him in ensuring:  all projects were paid for  all projects payments were deposited in the bank  commitments for projects paid, for but not yet performed, were known  Greg and Rob were only paid for hours worked  payroll source deductions and vacation pay were accurately computed  equipment was safeguarded and well maintained  former customers were called to see if they were satisfied with the work done and if

they are interested in doing a new project  payroll, interest and supplier payments were made on time The more Nick thought about it, the more he realized that without well thought out systems he would not be able to make enough money for the rest of the year. Also they needed to report Nick’s Landscaping’s financial position, results of operations and cash flow to Peter, who lent them $5,000 in May 1st and expect to receive them back by October 31st with an interest payment of 12% for a total of $5,600. Nick realized he would eventually need a computer system tailored to his operations, but he decided that it was best to begin with a non-computerized system. Once the company had been operating longer it would be easier to define the system needs of the business.

Appointment book and project card The project bookings were tentative until a cheque for $1,000 was received by Nick’s Landscaping. Nick wrote the tentative bookings in his note pad to keep track of whose project was first. Once payment was received, Nick began a project card showing the payment and listing the dates and times of work performed [a reduced size sample of a blank card is included with the project documents]. He took the project card to the site where the work was done so it can be completed by the end of the day. Nick reviewed the project cards daily. When the prepaid amounts account balances were zero, Nick took the project cards home, filed them alphabetically and waited two weeks before calling the customers to ask how they had enjoyed the experience with their company and the project in itself. There were two items not recorded in the appointment book because Nick was unsure about them:

 On June 30th Nick received a $2,000 cheque from the home on 136 America Av. for a project that has not been quoted yet. If done, the project will be worked on during the month of August.

 Reading the newspaper Nick realizes that one of the customers with a project scheduled to start on July 5th, 210 Triana Rd., has had a fatal accident on HWY400 on June 29th. He called the family as a courtesy and asked about the project, the family said that they will not do it and asked Nick to return the $1,000 deposit.

Daily control sheet Each day, Nick or Andrei completed a ‘daily control sheet’ [a reduced size sample daily control sheet is included with the project documents]. The daily control sheet was

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designed to capture information about hours worked, equipment usage and damage, payments received and any other relevant piece of data.

Bank deposits Weekly, Nick prepared a separate bank deposit for the customer payments collected, the weekly total of the amounts listed on the daily control sheets. He prepared another deposit for the cash and cheques received by mail. The book of deposit forms supplied by the bank provided for duplicate copies and Nick kept the copy as part of the business records [a sample bank deposit showing the first bank deposit is included with the project documents].

Payroll Another cousin is an accountant that has a practice and agreed with Nick to help him out this first year for free. She set up the company (incorporate it), gave advice on how to organize the records and also will do the payroll calculations. If the business works, they have agreed for next year to pay her as Nick’s Landscaping accountant a fee of $1,000 for the whole year. Nick added up the hours worked by Greg and Rob from the daily control sheets and provided his accountant with the names, Social Insurance Numbers, hourly rate, and hours worked by each of them. The accountant entered the data and prepared the Payroll Summary for the month [the Payroll Summary for May and June are included with the project documents] that included the payroll source deductions (Income tax, CPP - Canada Pension Plan contributions - and EI - Employment Insurance Premiums), the required employer CPP and EI contributions and accrued vacation pay. Using the Payroll Summary, Nick wrote cheques on June 10th and July 9th to pay Greg and Rob and to remit the source deductions and employer CPP and EI contributions to the Receiver General.

Other Payments Nick kept all the supplier invoices in a file folder. He reviewed the file folder daily and prepared cheques when payment was due using pre-numbered cheques. He kept the duplicate copy of each cheque as a record of the payment. [Copies of all supplier invoices and the cheques written during May and June are included with the project documents as well as those accrued in June.] When an invoice was paid, the date of payment and the cheque number were written on the supplier invoice to cross-reference payments and supplier invoices.

Month-end procedures On the last day of the month, Nick looked at every project card at each site and listed the account balance that represents the amount of money collected in advance for projects not yet completed. [A copy of this Prepaid Projects List is included with the project documents]. He also estimated the worth of the remaining supplies used to make equipment repairs, and wrote the value of the unused supplies. As soon as he received the bank statement from the bank, [a copy of the May and June statements are included with the project documents], Nick reconciled the statement to the copies of the bank deposits made and cheques written.

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General Ledger Postings and Financial Statement Preparation Nick has learned about basic financial accounting and how to prepare the initial set of financial statements. He dusted off his old procedure manuals and instructions from his previous employer to refresh his memory of simple financial statement preparation. When he was finished, he set-up the general ledger accounts he thought would be needed for Nick’s Landscaping Co. and posted the transactions and adjusting entries for May and the June. Nick estimated that the company owed income taxes of $2,000 for the first two months of operations. As Nick prepared Nick’s Landscaping’s trial balance and financial statements, he congratulated himself: all his careful planning and systems design had paid off. He not only had the information he needed to prepare the statements in accordance with the generally accepted accounting principles, but he also felt confident that the statements could be relied up when making financial decisions.

PART 1 REQUIRED: Prepare the accounting records for Nick’s Landscaping Co. (version A) Note: this task is based on the analysis of very extensive narrative and detailed project documents. Please check the password protected course website for announcements of any errors, omissions and clarifications to the term project description or project documents.

1. Set up the Chart of Accounts 2. Prepare the bank reconciliation for June, 2014 3. Prepare the General Journal for the months of May and June 2014 4. Post all transactions to the T-accounts 5. Prepare a trial balance at June 30, 2014 6. Prepare the Financial Statements in good form for June 2014 including footnotes

for a Summary of Significant Accounting Policies and for contingency disclosures.

7. Special instructions:  Each General Journal entry should have an explanation under it in

parenthesis.  Every place where the word “Nick” appears in items 1, 2, 3 and 4 of the

required substitute your own first name. 8. Based on all the information provided in this project, prepare a memo to Nick and

Andrei where you as a professional accountant evaluate their business. Specifically address Nick’s concern: how much can be paid in dividends to both partners? Is that close to Nick’s expectations of $2 per share per month during 12 months a year? If not, make two clear suggestions of how the business can be improved so Nick can achieve his target.

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PART 2: Locate and use an annual report STEP 1: Find the most recent annual report online for a Canadian public company of your choice from the SEDAR website. The annual report chosen must contain audited financial statements and the MDA (management's discussion and analysis). STEP 2: Indicate the name of the Company, its exact website address (URL) and answers found in the annual report to the following questions:

1. What industry is the company of your choice in and why did you decide to select this company?

2. What was the total change in cash during the year? 3. What amount was reported for revenue (net revenue before Gross Profit) for the

year and what was the change in revenue during the year from the preceding year?

4. What was a main reason given in management's discussion and analysis for this change in revenue?

5. What amount was reported for total assets and for net income/earnings [note: companies may use different titles such as 'earnings' to describe income]?

6. When was the auditor's report dated? Who was the auditor? 7. Who was the Chair of the Board of Directors at the time the annual report was

issued?

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PART 3: Use commercial accounting software The objective of part 3 of the term project is to afford students the opportunity to use accounting software so they appreciate the extent to which technology has completely transformed accounting. While the need for judgment and decisions will never disappear, the bookkeeping aspects of accounting have been largely automated. We hope you will marvel at and enjoy how easy it is to produce financial statements with the click of a button without doing the requisite adjusting entries. Actually working the numbers by hands accelerates the learning process, but once you leave University, you will see that the computer handles most accounting record keeping today. The term project requirements just scratch the surface in terms of showing the capabilities of accounting software. We hope you will take the time to view all the tutorials and do some clicking around to try out even more features. STEP 1: Acquire access to any commercial accounting software package that you don’t have to purchase. You or your employer may already possess software such as ACCPAC, SIMPLY ACCOUNTING, GREAT PLAINS, MYOB etc. If not, you can do a Google search and locate dozens of downloads online. ACCPAC is probably the most popular software used in Canadian Industry, but it is a little complex for our needs and doesn’t have a trial version. Two other popular Canadian products are SIMPLY ACCOUNTING and QUICKBOOKS Simply Accounting has a stripped down version of their product (free download) on their website called Sage 50 First Step Accounting. The download instructions need to be printed out since there are quite a few steps to install. They do not appear to have a Mac version. Stripped down versions are good news because they have much easier learning curves and they take up much less heard drive space on your PC. Certainly the most popular choice by students seems to be Inuit’s Quickbooks. This software is probably the leading Canadian seller for personal use as it integrates perfectly with their Quicktax tax return software. Quickbooks is similar to most software these days in that you are offered a 30 day free trial. There is a catch, however. Intuit requires you to give a credit card number in advance and after 30 days a dialog box pops up asking if you want to purchase the software. You have to respond no and then your software is disabled. This protocol is called negative billing and some people find it offensive. Intuit actually has a truly free version buried on their website but they don’t advertise it and it seems to be much, much slower. Sage Peachtree is another popular name in accounting software and they seem to offer

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a trial download on their website although they seem to want to solicit a lot of personal information first. MYOB used to be popular but they have closed their Canadian operations and since then there is a free trial version available on their Australian website. However, recently MYOB has resurfaced in Canada under the name of AccountEdge and a trial copy is made available in their new web page. MAC Users….Choices are more limited for Mac’s. Here is an example of a site which reviews some product options and there are other such sites. http://www.isoftwarereviews.com/accounting-software-for-mac/ If you dislike giving a credit card number, or have no credit cards, confine your search to either “free ware” or “shareware” (which is free but asks for a donation). Best to go through clearing house websites that assign ratings to the different products. Caveats An important caveat….never download any freeware/shareware without a good anti- virus program on your computer. There is evil hiding in ether-space. This is especially so for Windows users. We have even downloaded a shareware antivirus program which turned out to be a virus. People who download a lot of software might even want to consider a download manager program which basically takes a snapshot of all footprints (including registry entries) that the new software leaves on your system. Shareware crashes a lot and sometimes even freezes systems. It is very frustrating when the Windows Uninstall Utility will not uninstall when you want to wipe software off your computer. These download monitoring programs guarantee a one button wiping clean of unwanted programs. Another step towards self-protection is the back-up hard drive with auto back-up feature. A second caveat…. Some of these programs are just intended for foreign countries and don’t compute our HST or Canadian payroll deductions or use Canadian terminology. Make sure the software is appropriate for use in Canada. Third caveat….The Web also has free trials of Enterprise Reporting Systems (ERP) which handle accounting. Not recommended you use these as they are more complex with longer learning curves. Fourth caveat. Don’t download your time limited free trial the first day of the term. You need a few classes of accounting to have enough savvy to answer the questions so no point in starting the trial before you are ready. STEP 2: Use your software to create a set of books for a fictional company that includes your name and ID# (e.g., if your name was Jones then it might be Jones Jelly Bean Emporium – 211344654) with the fiscal year end of December 31, 2014. Many products have 'wizards' or tutorials to lead you through this process.

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STEP 3: Post the following transactions using the 'general journal entry' option rather than ‘specialized journal’ option. Hint: If you being prompted to enter customer or supplier name and address information, you are not using the 'general journal entry' option, and are doing more than is required in this assignment.)

a. A cash sale, dated December 1st, in an amount equal to your student number b. A utility expense, paid in cash, equal to one tenth of your student number c. A payment to a landlord to prepay rent in an amount equal to one fifth of your

student number d. A journal entry to accrue wages in an amount equal to one fifth of your student

number, to accrue other wages related expenses for one tenth of your student number

e. The receipt of cash, the proceeds of a bank loan, in an amount equal to twice your student number

f. The payment of an amount equal to half your student number for a bulldozer. If your software does not permit entry of your full nine digit student number then use the last 7 or 8 digits and make a note on your submission that this has been done. STEP 4: Prepare and print the Income Statement for December and the Balance Sheet at December 31 and also your general journal showing your journal entries. SUBMISSION REQUIRMENTS: Your term project for the introductory course on Financial Accounting consists of three parts. Specific requirements for submission (where, when and how) are contained in an announcement on your course website. Please note especially that Parts 1 and 2 should be word processed, and Part 3 should be computer generated by an accounting software program. The three parts shall be blended in one pdf file. Only one file will be marked. ACADEMIC DISHONESTY Also please note that if your submissions on Part 1, 2 or 3 are found to be perfect clones of another submission (as determined by Turnitin Software or other analysis) or are purchased from a commercial tutoring business you can be expected to be invited to a University hearing to demonstrate why you have not committed a breach of York’s policy on academic honesty. No problem in consulting with a study buddy on this project but each student submission should be unique enough to demonstrate you are indeed the sole author. Each semester several students are indeed prosecuted and found guilty by the University tribunal. Better not to do the project at all than risk the consequences of a conviction for plagiarism. .

Jimmy's SuperStore

3 locations to serve you better

Woodbridge - Newmarket - Markham directions & hours: www.jimmys.com directions & hours: www.jimmys.com

Envelopes 7.00

Paper 20.00

Pens 10.00

Markers 12.00

Packing Tape 18.00 Packing Tape 18.00

Painting tape 15.00

Wire 1/18 52.00

Wire 1/9 40.00

Contact glue 16.00

Super Duper Lock 10.00

200.00 200.00

May 1st, 2014

Visa 4700 6523 0682 1842

Value of office/repair supplies available at: Value of office/repair supplies available at: May 31st: $178 June 30th: $147

QuickPrint

Bill To: Nick's Landscaping Co.

37 Bricks Lane, Newmarket37 Bricks Lane, Newmarket

Invoice # TOR0230

Invoice Date May 1, 2014

Quantity Description Amount

200 business cards $75200 business cards $75

200 daily control sheets $100

100 project cards $50

Balance Due $225Balance Due $225

Payment before delivery: please make cheque payable to:

QuickPrint

48 Burgess Ave. Paid May 1st Cheque # 2Newmarket, ON

M7Z 1W9

Paid May 1st Cheque # 2

Value of printed docs Value of printed docs available at: May 31st: $150 June 30th: $125 June 30th: $125

BelTel your communication partner

Account Summary for Nick's Lansdcaping Co. May 30, 2014 Account # 3144950/1

Previous amount due - New Account $0.00 Payment Received - Thank you -

0.00

Current charges per details below $544 00Current charges - per details below $544.00 Total Amount Due $544.00

pre-authorized payment June 5, 2014 1% per month, plus a $50 collection fee, will be charged if insufficient funds at payment date

Current Charges - Detail

Equipment - 2 cell phones and a land line phone - $450.00

Monthly Basic Service Charges for May : $49.99 f f l dli hExtra fees May for landline phone

Business Voicemessaging & Call Display package $7.00 System access fee $7.50 911 access $1.22

$15.72 Extra fees May for cell phones

i ll $Roamming cell #1 $14.00 Long distance calls Cell #1 $2.23 Roamming cell #1 $5.00 Long distance calls Cell #1 $7.06

$28.29 ( details not included in project documents) T t l Ch $544 00Total Charges $544.00

BelTel your communication partner

Account Summary for Nick's Lansdcaping Co. June 30, 2014 Account # 3144950/1

Previous amount due - New Account $0.00 Payment Received - Thank you 544.00

0.00

Current charges per details below $119 00Current charges - per details below $119.00 Total Amount Due $119.00

pre-authorized payment July 5, 2014 1% per month, plus a $50 collection fee, will be charged if insufficient funds at payment date

Current Charges - Detail

Monthly Basic Service Charges for June: $49.99 Extra fees May for landline phone Business Voicemessaging & Call Display package $7.00 System access fee $7.50

$911 access $1.22 $15.72

Extra fees June for cell phones Roamming cell #1 $29.20 Long distance calls Cell #1 $7.59 Roamming cell #1 $12.70

di ll ll $Long distance calls Cell #1 $3.80 $53.29

( details not included in project documents) Total Charges $119.00

The RiskIt Insurance Group 120 North Town Centre Blvd.

Markam, ON W6G 1C5

Ask For: Stella Stevens INVOICE 98123 TERM 5 Months EFFECTIVE May 1, 2014 ACCT: Nick's Landscaping POLICY 89245-15 PREMIUM 5,000$ D t M 1 2014Date: May 1, 2014

All Perils YOUR PREMIUM IS DUE AND PAYABLE ON EFFECTIVE DATE OF POLICY Limit of Liability $5,000,000 Coverage is cancelled if not paid within 30 days

Paid May 1st Ch # 1 Paid May 1st Cheque # 1

***********************************************

15030 Yongue St

Newmarket, ON, M5N 7J2

May 1, 2014 7:01am

         Customer ID: Nick's Landscaping

Newmarket ON M3J 1P8

Liters Grade Price per liter Total

50 Diesel $1.28 64.00$  

Total  $64.00

Paid in Cash ($65.00) Change to customer ($1.00)

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15030 Yongue St

Newmarket, ON, M5N 7J2

May 8, 2014 11:30am

         Customer ID: Nick's Landscaping

Newmarket ON M3J 1P8

Liters Grade Price per liter Total

50 Diesel $1.31 65.50$  

Total  $65.50

Paid in Cash ($66.00) Change to customer ($0.50)

***********************************************

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15030 Yongue St

Newmarket, ON, M5N 7J2

May 19, 2014 3:18pm

         Customer ID: Nick's Landscaping

Newmarket ON M3J 1P8

Liters Grade Price per liter Total

50 Diesel $1.30 65.00$  

Total  $65.00

Paid in Cash ($65.00) Change to customer $0.00

***********************************************

15030 Yongue St

Newmarket, ON, M5N 7J2

May 26, 2014 5:07pm

         Customer ID: Nick's Landscaping

Newmarket ON M3J 1P8

Liters Grade Price per liter Total

50 Diesel $1.32 66.00$  

Total  $66.00

Paid in Cash ($70.00) Change to customer ($4.00)

***********************************************

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15030 Yongue St

Newmarket, ON, M5N 7J2

June 5, 2014 8:22am

         Customer ID: Nick's Landscaping

Newmarket ON M3J 1P8

Liters Grade Price per liter Total

50 Diesel $1.33 66.50$  

Total  $66.50

Paid in Cash ($70.00) Change to customer ($3.50)

***********************************************

15030 Yongue St

Newmarket, ON, M5N 7J2

June 16, 2014 10:02am

         Customer ID: Nick's Landscaping

Newmarket ON M3J 1P8

Liters Grade Price per liter Total

50 Diesel $1.35 67.50$  

Total  $67.50

Paid in Cash ($70.00) Change to customer ($2.50)

***********************************************

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15030 Yongue St

Newmarket, ON, M5N 7J2

June 21, 2014 3:04pm

         Customer ID: Nick's Landscaping

Newmarket ON M3J 1P8

Liters Grade Price per liter Total

50 Diesel $1.35 67.50$  

Total  $67.50

Paid in Cash ($70.00) Change to customer ($2.50)

***********************************************

15030 Yongue St

Newmarket, ON, M5N 7J2

June 30, 2014 11:59pm

         Customer ID: Nick's Landscaping

Newmarket ON M3J 1P8

Liters Grade Price per liter Total

50 Diesel $1.36 68.00$  

Total  $68.00

Paid in Cash ($70.00) Change to customer ($2.00)

***********************************************

Sam's Materials 25 years of experience in construction materials 25 Mersner Ct Newmarket, Ontario M3J OF8

Bill To: Nick's Landscaping Invoice #: 2014-154 37 Bricks Lane Invoice Date: May 15 ,2014 Newmarket ON M3J 1P8Newmarket ON M3J 1P8

Date taken Description Details Amount 12-May-14 Interlocking blocks Veneto 5,500.00$ 12-May-14 Polimer sand 50 Kg 200.00$ 5 May 14 Cement 25 kg 130 00$5-May-14 Cement 25 kg 130.00$ 5-May-14 Flag stone 22 slabs 8,000.00$ 10-May-14 Asphalt 25 kg 120.00$

Previous Overdue Total Balance Balance Amount Due

$ $ $

Payments and New Adjustments Charges

$ $$0 $0 $13,950

terms: No return accepted without prior written authorization. All claims must be made within 5 days following receipt of Goods

INVOICE/FACTURE

$0 $13,950

Paid May 15th INVOICE/FACTURE Paid May 15th Cheque # 3Cheque # 3

Sam's Materials 25 years of experience in construction materials 25 Mersner Ct Newmarket, Ontario M3J OF8

Bill To: Nick's Landscaping Invoice #: 2014-182 37 Bricks Lane Invoice Date: May 30 ,2014 Newmarket ON M3J 1P8Newmarket ON M3J 1P8

Date taken Description Details Amount 21-May-14 Interlocking blocks Antica 7,200.00$ 21-May-14 Polimer sand 80 Kg 300.00$ 17/5/2014 Cement 25 kg 130 00$17/5/2014 Cement 25 kg 130.00$ 17/5/2014 Flag stone 8 slabs 3,400.00$ 23-May-14 Top soil and sod grass 100 m2 700.00$

Previous Overdue Total Balance Balance Amount Due

$ $ $

Payments and New Adjustments Charges

$ $$0 $0 $11,730

terms: No return accepted without prior written authorization. All claims must be made within 5 days following receipt of Goods

INVOICE/FACTURE

$0 $11,730

Paid May 30th INVOICE/FACTURE Paid May 30th Cheque # 4Cheque # 4

Sam's Materials 25 years of experience in construction materials 25 Mersner Ct Newmarket, Ontario M3J OF8

Bill To: Nick's Landscaping Invoice #: 2014-213 37 Bricks Lane Invoice Date: June 15 ,2014 Newmarket ON M3J 1P8

Date taken Description Details Amount 12-Jun-14 Interlocking blocks Regular 3,200.00$ 12-Jun-14 Polimer sand 50 Kg 200.00$ 5-Jun-14 Top soil and sod grass 900 m2 5,600.00$

Previous Overdue Total Balance Balance Amount Due

$0 $0 $9,000

terms: No return accepted without prior written authorization. All claims must be made within 5 days following receipt of Goods

INVOICE/FACTURE

Payments and New Adjustments Charges

$0 $9,000

Paid June 15th Cheque # 8

Sam's Materials 25 years of experience in construction materials 25 Mersner Ct Newmarket, Ontario M3J OF8

Bill To: Nick's Landscaping Invoice #: 2014-247 37 Bricks Lane Invoice Date: June 30 ,2014 Newmarket ON M3J 1P8

Date taken Description Details Amount

16-Jun-14 Asphalt 100 kg 500.00$ 25-Jun-14 Cement 25 kg 130.00$ 25-Jun-14 Flag stone 18 slabs 4,200.00$

Previous Overdue Total Balance Balance Amount Due

$0 $0 $4,830

terms: No return accepted without prior written authorization. All claims must be made within 5 days following receipt of Goods

INVOICE/FACTURE

Payments and New Adjustments Charges

$0 $4,830

Paid June 30th Cheque # 9

Rent for Greg's cutting machine May - Greg May - Rob June - Greg June - Rob TOTAL

Payroll Summary May and June 2014

May - Greg May - Rob June - Greg June - Rob TOTAL Employee Wages, and Taxes May June

Hours Worked 80.0 225.0 102.0 220.0 627.0 Hours 40 62 Hourly Reg. Rate 30.00 15.00 30.00 15.00 19.00 Rate 50 50

Gross Pay 2,400.00 3,375.00 3,060.00 3,300.00 12,135.00 Rent to pay 2000 3100

Taxes Withheld P id J 3 d Taxes Withheld Federal Income Tax (336.00) (472.50) (428.40) (462.00) (1,698.90) CPP - Employee (103.20) (145.13) (131.58) (141.90) (521.81) EI - Employee (50.40) (70.88) (64.26) (69.30) (254.84)

Total Taxes Withheld (489.60) (688.50) (624.24) (673.20) (2,475.54)

Net Pay 1,910.40 2,686.50 2,435.76 2,626.80 9,659.46

Paid June 3rd Cheque # 6 and July 3rd Cheque #

Employer Taxes and Contributions CPP - Company 103.20 145.13 131.58 141.90 521.81 EI - Company 72.00 101.25 91.80 99.00 364.05

Total Employer Taxes and Contributions 175.20 246.38 223.38 240.90 885.86

July 3rd Cheque #12

Vacation Pay Accrued 96.00 135.00 122.40 132.00 485.40

Paid June 3rd Cheques #5 and #6

Paid July 3rd Cheques #11 and #12J

Cheques #5 and #6 Cheques #11 and #12

Shoals Bank Statement of Account Account

2594 Dimple Crescent 13712-234-567-14 Toronto ON M3J 1P7 Current Account

Statement Date May 31, 2014

Branch 02912 Nick's Landscaping Co. Newmarket, ON M3J 1P8

Date Description Debits Credits Balance 1-May DEPOSIT 1,000.00 1,000.00 1-May DEPOSIT 5,000.00 6,000.00 1-May CHEQUE 1 5,000.00 1,000.00 1-May CHEQUE 2 225.00 775.00 2-May Cash Withdraw 260.50 514.50 3-May DEPOSIT 4,000.00 4,514.50 5-May DEPOSIT 10,000.00 14,514.50

15-May CHEQUE 3 13,950.00 564.50 20-May DEPOSIT 15,000.00 15,564.50 26-May DEPOSIT 10,000.00 25,564.50 30-May CHEQUE 4 11,730.00 13,834.50

MONTHLY SERVICE CHARGE 20.00 13,814.50

TOTALS 31,185.50 45,000.00 13,814.50

Shoals Bank Statement of Account Account

2594 Dimple Crescent 13712-234-567-14 Toronto ON M3J 1P7 Current Account

Statement Date June 30, 2014

Branch 02912 Nick's Landscaping Co. Newmarket, ON M3J 1P8

Date Description Debits Credits Balance 1-Jun Opening Balance 13,814.50 3-Jun CHEQUE 5 3,910.40 9,904.10 3-Jun CHEQUE 6 2,686.50 7,217.60 3-Jun Cash Withdraw 269.50 6,948.10 5-Jun DEPOSIT 12,000.00 18,948.10 5-Jun TELEPHONE BILL 544.00 6,404.10

15-Jun CHEQUE 7 1,599.68 17,348.42 15-Jun CHEQUE 8 9,000.00 8,348.42 15-Jun DEPOSIT 10,000.00 18,348.42 18-Jun NSF CHEQUE 2,300.00 16,048.42 18-Jun NSF CHEQUE fee 25.00 16,023.42 22-Jun DEPOSIT 15,000.00 31,023.42 29-Jun DEPOSIT 4,000.00 35,023.42 30-Jun CHEQUE 9 4,830.00 30,193.42 30-Jun CHEQUE 11 1,000.00 29,193.42

MONTHLY SERVICE CHARGE 20.00 29,173.42

TOTALS 26,185.08 41,000.00 28,629.42

Nick Landscaping 01 Nick Landscaping 08 37 Bricks Lane 37 Bricks Lane

Newmarket, ON M3J 1P8 May 1, 2014 Newmarket, ON M3J 1P8 June 15, 2014

PAY TO THE PAY TO THE

ORDER OF RiskIt Insurance Group ORDER OF Sam's Materials

five thousands 00/100 5,000.00$ nine thousands 00/100 9,000.00$

DOLLARS DOLLARS

Shoals Bank PER Shoals Bank PER

2594 Dimple Crescent 2594 Dimple Crescent

Toronto ON M3J 1P7 Toronto ON M3J 1P7

Nick Landscaping 02 Nick Landscaping 09 37 Bricks Lane 37 Bricks Lane

Newmarket, ON M3J 1P8 May 1, 2014 Newmarket, ON M3J 1P8 June 30, 2014

PAY TO THE PAY TO THE

ORDER OF Quick Print ORDER OF Sam's Materials

two hundreds twenty five 00/100 225.00$ four thousands eight hundreds thirty 00/100 4,830.00$

DOLLARS DOLLARS

Shoals Bank PER Shoals Bank PER

2594 Dimple Crescent 2594 Dimple Crescent

Toronto ON M3J 1P7 Toronto ON M3J 1P7

Nick Landscaping 03 Nick Landscaping 10 37 Bricks Lane 37 Bricks Lane

Newmarket, ON M3J 1P8 May 15, 2014 Newmarket, ON M3J 1P8 June 30, 2014

PAY TO THE PAY TO THE

ORDER OF Sam's Materials ORDER OF Andrei Johnson

thirteen thousands nine hundreds fifty 00/100 13,950.00$ two hundreds 00/100 200.00$

DOLLARS DOLLARS

Shoals Bank PER Shoals Bank PER

2594 Dimple Crescent 2594 Dimple Crescent

Toronto ON M3J 1P7 Toronto ON M3J 1P7

Nick Landscaping 04 Nick Landscaping 11 37 Bricks Lane 37 Bricks Lane

Newmarket, ON M3J 1P8 May 30, 2014 Newmarket, ON M3J 1P8 June 30, 2014

PAY TO THE PAY TO THE

ORDER OF Sam's Materials ORDER OF Large Construction/Landscaping Co.

eleven thousands seven hundreds thirty 00/100 11,730.00$ one thousand 00/100 1,000.00$

DOLLARS DOLLARS

Shoals Bank PER Shoals Bank PER

2594 Dimple Crescent 2594 Dimple Crescent

Toronto ON M3J 1P7 Toronto ON M3J 1P7

Nick Landscaping 05 Nick Landscaping 12 37 Bricks Lane 37 Bricks Lane

Newmarket, ON M3J 1P8 June 3, 2014 Newmarket, ON M3J 1P8 July 3, 2014

PAY TO THE PAY TO THE

ORDER OF Gregory Pushkin ORDER OF Gregory Pushkin

three thousands nine hundreds ten with 40/100 3,910.40$ five thousands five hundreds thirty five with 76/100 5,535.76$

DOLLARS DOLLARS

Shoals Bank PER Shoals Bank PER

2594 Dimple Crescent 2594 Dimple Crescent

Toronto ON M3J 1P7 Toronto ON M3J 1P7

Nick Landscaping 06 Nick Landscaping 13 37 Bricks Lane 37 Bricks Lane

Newmarket, ON M3J 1P8 June 3, 2014 Newmarket, ON M3J 1P8 July 3, 2014

PAY TO THE PAY TO THE

ORDER OF Robert Simpson ORDER OF Robert Simpson

Two thousands six hundreds eighty six with 50/100 2,686.50$ two thousands six hundreds twenty six with 80/100 2,626.80$

DOLLARS DOLLARS

Shoals Bank PER Shoals Bank PER

2594 Dimple Crescent 2594 Dimple Crescent

Toronto ON M3J 1P7 Toronto ON M3J 1P7

Nick Landscaping 07 Nick Landscaping 14 37 Bricks Lane 37 Bricks Lane

Newmarket, ON M3J 1P8 June 15, 2014 Newmarket, ON M3J 1P8 Jule 15, 2014

PAY TO THE PAY TO THE

ORDER OF Receiver General ORDER OF Receiver General

One thousand five hundreds ninety nine with 68/100 1,599.68$ One thousand seven hundreds sixty one with 72/100 1,761.72$

DOLLARS DOLLARS

Shoals Bank PER Shoals Bank PER

2594 Dimple Crescent 2594 Dimple Crescent

Toronto ON M3J 1P7 Toronto ON M3J 1P7

Prepaid projects - June 30, 2014

Site Location

Date

Daily Control Sheet (DCS)

Time Worker's name Work done Worker's signature Equipment used Any amount paid? Equipment damage notes

10 - Noon

1 - 3

3 - 5

6 - 8

Total project hours Total of cheques and cash

Nick's Landscaping DCS approval & Degree of completion confirmation of cash receipt

Shoals Bank Date

Account 13712-234-567-14 Current Account Deposit Account Name: Nick's Landsc. Account 13712-234-567-14

Cheques

Account Name: Nick s Landsc. Account 13712 234 567 14

Date May 3, 2014

15 Burrard 1,000 00 Account Name: Nick's Landscaping

152 Klimson 1,000 00

Particulars

x 5

x 10

x 20

20 x 50 1,000 00 10 x 100 1,000 00 Coin

Total CDN Cash 2,000 00 Total CDN Cheques 2 000 00ota C C eques 2,000 00 Total Credit Card

Subtotal 4,000 00 Foreign Cash Foreign Cheques Bank Use Onlyy

Total

Deposited By

Total Cheques

Project Card (card front) Project Card (card back)

Contact and Financial Management Materials used date Worker's Comments Name Phone # Landscaping: initials Address email interlocking:g Contacted re doing future projects square feet ________ Date description _________

colour _____________ flag stone:

phone/email Comments

square feet ________ description _________

Account Balance: colour _____________ Date Hours Hours Hours Degree of Payment Account cement

k d k d k d C l i R i d B l l dworked worked worked Completion Received Balance polymer sand top soil sod grass remove/restore fixed objects Special finishes:Special finishes: driveway sealing driveway asphalt water sprout repair painting details painting details

REQUEST.docx

REQUEST

PART 1 REQUIRED: Prepare the accounting records for Nick’s Landscaping Co. (version A)

Note: this task is based on the analysis of very extensive narrative and detailed project documents. Please check the password protected course website for announcements of any errors, omissions and clarifications to the term project description or project documents.

1. Set up the Chart of Accounts

2. Prepare the bank reconciliation for June, 2014

3. Prepare the General Journal for the months of May and June 2014

4. Prepare the Financial Statements in good form for June 2014 including footnotes for a Summary of Significant Accounting Policies and for contingency disclosures.

5. Plus satisfy and provide answers to the special instructions of this term project.

6. Post all transactions to the T-accounts

7. Prepare a trial balance at June 30, 2014

PART 2: Locate and use an annual report

STEP 1:  Find the most recent annual report online for a Canadian public company of your choice from the SEDAR website. The annual report chosen must contain audited financial statements and the MDA (management's discussion and analysis).

STEP 2:  Indicate the name of the Company, its exact website address (URL) and answer a set of questions based on the information available in the annual report (not financial statements or not in Google Finance or any other second hand source).

 

PART 3: Use commercial accounting software

The objective of part 3 of the term project is to afford students the opportunity to use accounting software so they appreciate the extent to which technology has completely transformed accounting. While the need for judgment and decisions will never disappear, the bookkeeping aspects of accounting have been largely automated. We hope you will marvel at and enjoy how easy it is to produce financial statements with the click of a button without doing the requisite adjusting entries. Actually working the numbers by hands accelerates the learning process, but once you leave University, you will see that the computer handles most accounting record keeping today. The term project requirements just scratch the surface in terms of showing the capabilities of accounting software. We hope you will take the time to view all the tutorials and do some clicking around to try out even more features.

STEP 1:  Acquire access to any commercial accounting software package that you don’t have to purchase. You or your employer may already possess software such as  ACCPAC,  SIMPLY ACCOUNTING,  GREAT PLAINS,  MYOB etc. If not, you can do a Google search and locate dozens of downloads online.

STEP 2:  Use your software to create a set of books for a fictional company that includes your name and ID# (e.g., if your name was Jones then it might be Jones Jelly Bean Emporium – 211344654) with the fiscal year end of December 31, 2011. Many products have 'wizards' or tutorials to lead you through this process.

STEP 3:  Post the set of required transactions using the 'general journal entry' option rather than ‘specialized journal’ option.  Hint: If you being prompted to enter customer or supplier name and address information, you are not using the 'general journal entry' option, and are doing more than is required in this assignment.)

If your software does not permit entry of your full nine digit student number then use the last 7 or 8 digits and make a note on your submission that this has been done.

STEP 4:  Prepare and print the Income Statement for December and the Balance Sheet at December 31 and also your general journal showing your journal entries.

 

SUBMISSION REQUIRMENTS:

Your term project for ADMS 2500 consists of three parts.  Please note that although Parts 1 and 2 should be word processed, Part 3 should be computer generated by an accounting software program (if a pdf file cannot be generated, then append Jpegs pages). You upload in this web site one pdf file containing the three parts (max size of the file 20MB). No multiple submission are allowed. Late submissions are penalized. No submission implies no grade in the course.