pc/MRP MANUAL CHAPTER 14.4 07/14/98

14.4.1

ACCOUNTING LESSON

14.4.1 pc/MRP ACCOUNTING LESSON

The fastest way to become familiar with pc/MRP's Accounting System is by actually using it. By entering the work sheet transactions on the following page you will become familiar with pc/MRP's easy to use accounting system.

The first entry, labeled 000001 represents a typical transaction for starting an account or business. pc/MRP will automatically increment this number by one as transactions are made. Do not create your own transaction numbers. Transaction numbers should be cronological with no missing numbers.

To set up you company all of the company's assets are debited and the starting capital account is credited an equal amount. Then the company's liabilities are credited and the starting capital account is debited an equal amount.

To make the same starting entries in pc/MRP, go to Modules, Accounting, GL Transactions, New Transaction, select A for All types of transactions and press OK. pc/MRP will give you the next available transaction number. You will now see the transaction data entry screen. Take note that the transaction number is 000001.

Transaction 000001

STARTING BUSINESS

debit

10100000

CASH ON HAND

debit

UNBALANCED

credit

After selecting Yes, take note that pc/MRP automatically increase the transaction number by 1. You should now be at transaction number 000002.

Transaction 000002

debit

credit

Balanced

Transaction 000003.

Debit

Transaction 000004

000004

To make this final starting entry in pc/MRP, similar to above, go to Modules, Accounting, GL Transactions, New Transaction, select A for All types of transactions and press OK. Enter STOCK INVENTORY ADJUSTMENT in the description field. Debit account 40100000 for $6,000 and credit account 12100000 for $6,000.

Transaction N moves the months end remaining inventory back into the asset account so that the month's retained earnings will reflect the changes in inventory levels.

Once all transactions have been entered, return to the Main Accounting Menu. Print out the transactions you have just entered by selecting Accounting Reports, select General Ledger Transactions, select All Transactions (3 times), and select Print. Your Transaction Report should match the sample Transaction report found in the Accounting Report Section of this manual.

If the Transaction Report looks good, return back to the Main Accounting Menu and post the month by selecting Post/Re-post a Month and Print Financials . Enter the month and year that contain the above entries. Since pc/MRP stores the transactions in a database you can edit incorrect transactions and repost the month if necessary.

pc/MRP's posting program begins by making sure the initial debit and credit balances are equal.

When pc/MRP finishes posting the month it automatically initializes the next month by: (1) zeroing out all starting bal. of revenue and expense accounts (2) transferring forward all asset, liability and equity accounts and (3) adding the retained earnings (rev - exp) to the YTD earnings.

Last but not least pc/MRP's posting program will automatically print out the month's financial statements such as Income Statement, Expense Distribution Report, Trial Balance, YTD Revenue and Expense Report, and a Detailed Transaction Report. If you entered all the transactions correctly, your reports should match the sample reports found on the following pages.

14.4.2 Transaction Lesson Entries

TRAN ACCT.                     DESCRIPTION            DEBIT     CREDIT  

0001 10100000 CASH ON HAND     STARTING BUSINESS   5,000.00
     10200000 BANK                                10,000.00
     12100000 STOCK INVENTORY                      6,000.00
     25100000 STARTING CAPITAL                                  21,000.00

0002 13200000 SHOP EQUIPMENT   STARTING BUSINESS  15,000.00
     11100000 ACCTS RECEIVBLE                      4,000.00
     15100000 PREP EXPENSES                        1,000.00
     25100000 STARTING CAPITAL                                  20,000.00

0003 25100000 STARTING CAPITAL                    25,000.00 
     24100000 NOTES PAYABLE    STARTING BUSINESS                25,000.00

0004 40100000 START INVENTORY  STOCK INV ADJUST    6,000.00
     12100000 STOCK INVENTORY                                    6,000.00

0005 41100000 PURCHASES        KMART               3,000.00
     41400000 FREIGHT                                400.00            
     20100000 ACCTS PAYABLE                                      3,400.00

0006 11100000 ACCTS RECEIVABLE FM PRODUCTS        15,000.00
     30100000 BUSINESS INCOME                                   15,000.00

0007 10200000 BANK CHECKING    FM PRODUCTS        12,000.00
     11100000 ACCTS RECEIVABLE                                  12,000.00

0008 50100000 WAGES            P GOMEZ               500.00
     22100000 PAYROLL TAX PAY                                       50.00
     10200000 BANK CHECK                                           450.00

0009 61500000 RENT             R TORRES            1,000.00
     10200000 BANK CHECKING                                      1,000.00

0010 60100000 ADVERTISING      S F EXAMINER           50.00
     10200000 BANK CHECKING                                         50.00

0011 61000000 INSURANCE        B BERNAL              700.00
     10200000 BANK CHECKING                                        700.00

0012 61400000 OFFICE EXPENSE   FRY'S                   8.00
     10100000 CASH ON HAND                                           8.00

0013 10200000 BANK CHECKING    WFB INTEREST           25.00
     80100000 OTHER INCOME                                          25.00

0014 12100000 STOCK INVENTORY  ENDING INVENTORY    1,500.00   
     42100000 ENDING INVENTORY                                   1,500.00

0015 70100000 DEPRECIATION EXP                       125.00
     14100000 DEPREC ACCRUED                                       125.00

14.4.3 Transaction Lesson Reports

Entering the transactions from the accounting lesson and posting the month will create the following reports:

 
SMITH MANUFACTURING CORP

09/23/90 
   

                                                                                             

 GENERAL LEDGER INCOME STATEMENT 04 89                 

_______________________________________________________  

                                                  
        

 GROSS REVENUE                  =   15000.00 
 COST OF GOODS SOLD             =    7900.00   
                                  ---------- 

 GROSS NET PROFIT                    7100.00  
                                                  
                                                 
 COST OF LABOR                  =     500.00   
 OPERATING EXPENSES             =    1758.00       
                                  ----------       

 NET PROFITS BEFORE WRITE OFFS       4842.00      

                                                    
                                                   
 WRITE OFF EXPENSES             =     125.00         
                                  ----------      

 NET PROFIT BEFORE OTHER INCOME      4717.00 
        
                                                      
 OTHER INCOME                   =      25.00  
 OTHER EXPENSES                 =       0.00          
                                  ----------  

 NET PROFIT BEFORE INCOME TAXES      4742.00 

                                           
 INCOME TAXES                   =       0.00    
                                  ---------- 
   

 NET PROFIT                          4742.00

14.4.4 The YTD Report

SMITH MANUFACTURING CORP                                                                  
9/23/90                                                         
                          
                                                                                                  
YTD EXPENSE AND REVENUE REPORT 04 89                                                       
                          Current Month      YTD     Budge YTD Budget  %Var  YTD %Var 

--------------------------------------------------------------------------------------------                                     
                                                              
30100000 BUSINESS INCOME        15000.00   15000.00   20000.00   20000.00     75     75 
30900000 REFUNDS                    0.00       0.00       0.00       0.00    ***     *** 
80100000 OTHER INCOME INTEREST     25.00      25.00       0.00       0.00    ***     ***  

--------------------------------------------------------------------------------------------
REVENUE TOTALS                  15025.00   15025.00   20000.00   20000.00     75      75  
                                                                                                 

40100000 STARTING INVENTORY      6000.00    6000.00       0.00       0.00    ***     ***
41100000 PURCHASES               3000.00    3000.00       0.00       0.00    ***     *** 
41200000 OUTSIDE LABOR              0.00       0.00       0.00       0.00    ***     ***  
41400000 FREIGHT                  400.00     400.00       0.00       0.00    ***     ***    
42100000 ENDING STOCK INVENTORY  1500.00   -1500.00       0.00       0.00    ***     ***  

--------------------------------------------------------------------------------------------
COST OF GOODS SOLD TOTALS        7900.00    7900.00       0.00       0.00    ***     *** 
50100000 WAGES                    500.00     500.00       0.00       0.00    ***     *** 
51100000 PAYROLL TAXES              0.00       0.00       0.00       0.00    ***     *** 

-------------------------------------------------------------------------------------------- 
COST OF LABOR TOTALS               500.00     500.00      0.00       0.00    ***     ***   

60100000 ADVERTISING                50.00      50.00      0.00       0.00    ***     *** 
60600000 CAR AND TRUCKS              0.00       0.00      0.00       0.00    ***     *** 
60800000 DUES AND SUBSCRIPTIONS      0.00       0.00      0.00       0.00    ***     ***                
60900000 INSURANCE AUTO              0.00       0.00      0.00       0.00    ***     *** 
61000000 INSURANCE GENERAL         700.00     700.00      0.00       0.00    ***     *** 
61400000 OFFICE SUPPLIES             8.00       8.00      0.00       0.00    ***     *** 
61500000 RENT                     1000.00    1000.00      0.00       0.00    ***     *** 
62300000 TELEPHONE                   0.00       0.00      0.00       0.00    ***     *** 

--------------------------------------------------------------------------------------------
OPERATING EXPENSES TOTALS         1758.00    1758.00      0.00       0.00    ***     ***     


70100000 DEPRECIATION EXPENSES     125.00     125.00      0.00       0.00    ***     ***  
70200000 AMORTIZATION EXPENSES       0.00       0.00      0.00       0.00    ***     *** 

-------------------------------------------------------------------------------------------- 
WRITE OFF EXPENSES TOTALS          125.00     125.00      0.00       0.00    ***     ***

81100000  OTHER EXPENSES PORTFOLIO   0.00       0.00      0.00       0.00    ***     ***

-------------------------------------------------------------------------------------------- 
OTHER EXPENSES TOTALS                0.00       0.00      0.00       0.00    ***     ***  


--------------------------------------------------------------------------------------------


RETAINED EARNING TOTALS           4742.00    4742.00      0.00       0.00    ***     ***

14.4.5 The Trial Balance Report

 

SMITH MANUFACTURING CORP                                     
  09/23/90                                                     

                                                               
    GENERAL LEDGER TRIAL BALANCE 05 92                           

                                                               
 ACCT      DESCRIPTION          TYPE           DEBIT        CREDIT


 10100000  CASH ON HAND           AC         4992.00            
 10200000  BANK CHECKING ACCOUNT  AC        19825.00            
 10300000  BANK SAVINGS ACCOUNT   AC            0.00            
 11100000  ACCNT/RECVB.CUSTOMERS  AC         7000.00            
 11200000  ACCNT/RECVS.OTHERS     AC            0.00            
 11900000  A/R BAD DEBT RESERV    AC                          0.00
 12100000  STOCK INVENTORY        AC         1500.00            
 13100000  SHOP EQUIPMENT         AF            0.00            
 13200000  FURNITURE & FIXTURES   AF        15000.00            
 13300000  TRANSPORTATION EQUIP.  AF            0.00            
 13400000  LEASEHOLD EQUIP.       AF            0.00            
 13500000  LAND                   AF            0.00            
 13600000  BUILDING               AF            0.00            
 14100000  DEPRECIATION ACCRUED   AD                        125.00
 14200000  AMORTIZATION ACCRUED   AD                          0.00
 15100000  PREPAID EXPENSES       AL         1000.00            
 20100000  ACCNTA/PAYAB.VENDORS   LC                       3400.00
 20200000  ACCNTS/PAYAB.OTHERS    LC                          0.00
 21100000  SALES TAX              LC                          0.00
 22100000  PAYROLL TAX. F.W.T.    LC                         50.00
 22110000  PAYROLL TAX. F.I.C.A.  LC                          0.00
 22120000  PAYROLL TAX. F.U.T.A.  LC                          0.00
 22130000  PAYROLL TAX.S.D.I.C.A. LC                          0.00
 22140000  PAYROLL TAX.S.W.T.C.A. LC                          0.00
 22150000  PAYROLL TAX.S.U.I.C.A. LC                          0.00
 22160000  PAYROLL TAX.E.T.T.CA.  LC                          0.00
 22900000  INCOME TAX. FEDERAL    LC                          0.00
 22910000  INCOME TAX. STATE      LC                          0.00
 23100000  MORTGAGES              LL                          0.00
 24100000  NOTES PAYABLE          LL                      25000.00
 25100000  STARTING CAPITAL       QN                      16000.00
 26100000  CAPITAL INCREASE       QN                          0.00
 27100000  CAPITAL DECREASE       QN            0.00 
 28100000  OTHER INVESTMENT       QN                          0.00
 29100000  COMPANY TAXES          QN            0.00 
 29900000  YTD RETAINED EARNINGS  QR                          0.00
 30100000  BUSINESS INCOME        RN                      15000.00
 30900000  REFUNDS                RN            0.00   
 40100000  STARTING INVENTORY     EG         6000.00   
 41100000  PURCHASES              EG         3000.00 
 41200000  OUTSIDE LABOR          EG            0.00   
 41300000  SALES COMMISIONS       EG            0.00

Trial Balance Continued

 41400000  FREIGHT                EG          400.00            
 41900000  PURCHASES DISCOUNTS    EG                          0.00
 42100000  ENDING STOCK INVENTORY EG                       1500.00
 50100000  WAGES                  EL         5000.00            
 51100000  PAYROLL TAXES          EL          500.00            
 51200000  WORKERS COMP.INSURANCE EL            0.00            
 51300000  EMPLOYEES BENEFITS     EL            0.00            
 60100000  ADVERTISING            EN           50.00            
 60200000  ACCOUNTANT/ATTORNEY    EN            0.00            
 60300000  BAD DEBTS              EN            0.00            
 60400000  BANK CHARGES           EN            0.00            
 60500000  BOOKEEPER              EN            0.00            
 60600000  CARS AND TRUCKS        EN            0.00            
 60800000  DUES & SUBSCRIPTIONS   EN            0.00            
 60900000  INSURANCE AUTO         EN            0.00            
 61000000  INSURANCE GENERAL      EN          700.00            
 61100000  INTEREST               EN            0.00            
 61200000  LUANDRY & CLEANING     EN            0.00            
 61300000  LEASING EQUIPMENT      EN            0.00            
 61400000  OFFICE SUPPLIES        EN            8.00            
 61500000  RENT                   EN         1000.00            
 61600000  REPAIRS                EN            0.00            
 61700000  SHOP SUPPLIES          EN            0.00            
 61800000  PROMOT/ENTERTAINMENT   EN            0.00            
 61900000  TRAVEL                 EN            0.00            
 62000000  TAXES                  EN            0.00            
 62100000  OTHER TAXES            EN            0.00            
 62200000  PERMITS & LICENSES     EN            0.00            
 62300000  TELEPHONE              EN            0.00            
 62400000  TELECOMMUNICATIONS     EN            0.00            
 62500000  UTILITIES              EN            0.00            
 70100000  DEPRECIATION EXPENSE   EW          125.00            
 70200000  AMORTIZATION EXPENSE   EW            0.00            
 80100000  OTHER INCOME INTEREST  RO                         25.00
 81100000  OTHER EXP PORTOFIO     EO            0.00            
 90100000  COMPANY TAX-FEDERAL    ET            0.00            
 90200000  COMPANY TAX STATE      ET            0.00            
                                          ----------     ----------
                           TOTALS           61100.00      61100.00

14.4.6 Balance Sheet

SMITH MANUFACTURING CORP                                     
09/23/90                                                     
                                                              
BALANCE SHEET 04 89                                          
 ____________________________________________________________ 

ASSETS 

    CURRENT ASSETS                  
      10100000  CASH ON HAND          +    4992.00    
      10200000  BANK CHECKING ACCOUNT +   19825.00 
      10300000  BANK SAVINGS ACCOUNT  +       0.00
      11100000  ACCNT/RECVB CUSTOMERS +    7000.00
      11200000  ACCNT/RECVS OTHERS    +       0.00
      11900000  A/R BAD DEBT RESERV   -       0.00 
      12100000  STOCK INVENTORY       +    1500.00 
                                        ---------- 

                                TOTAL     33317.00 
                                          
    OTHER ASSETS 
      15100000  PREPAID EXPENSES      +    1000.00 
                                        ---------- 

                                TOTAL      1000.00

              
    FIXED ASSETS  
      13100000  SHOP EQUIPMENT         +      0.00
      13200000  FURNITURE & FIXTURES   +  15000.00 
      13300000  TRANSPORTATION EQUIP   +      0.00 
      13400000  LEASE HOLD EQUIPMENT   +      0.00
      13500000  LAND                   +      0.00
      13600000  BUILDING               +      0.00
                                        ---------- 

                                TOTAL     15000.00              
                                  
   LESS DEPRECIATION   
      14100000  DEPRECIATION ACCRUED   -    125.00 
      14200000  AMORTIZATION ACCRUED   -      0.00
                                        ---------- 

                                TOTAL      -125.00 

                                                 
  TOTAL ASSETS                            49192.00

Balance Sheet Continued

SMITH MANUFACTURING CORP 09/23/90 BALANCE SHEET 04 89 ____________________________________________________________

LIABILITIES CURRENT LIABILITIES 20100000 ACCNTS/PAYAB VENDORS + 3400.00 20200000 ACCNTS/PAYABLE OTHERS + 0.00 21100000 SALES TAX + 0.00 22100000 PAYROLL TAX F.W.T. + 50.00 22110000 PAYROLL TAX F.I.C.A. + 0.00 22120000 PAYROLL TAX F.U.T.A. + 0.00 22130000 PAYROLL TAX S.D.I.C.A + 0.00 22140000 PAYROLL TAX S.W.T.C.A + 0.00 22150000 PAYROLL TAX S.U.I.C.A + 0.00 22160000 PAYROLL TAX E.T.T.C.A + 0.00 22900000 INCOME TAX FEDERAL + 0.00 22160000 INCOME TAX STATE + 0.00 --------- TOTAL 3450.00 LONG TERM LIABILITIES 23100000 MORTGAGES + 0.00 24100000 NOTES PAYABLE + 25000.00 ---------- TOTAL 25000.00 EQUITY 25100000 STARTING CAPITAL + 16000.00 27100000 CAPITAL DECREASE - 0.00 28100000 OTHER INVESTMENT + 0.00 29100000 COMPANY TAXES - 0.00 ---------- TOTAL 16000.00 29900000 YTD RETAINED EARNINGS + 4742.00 TOTAL LIABILITY + EQUITY 49192.00