Wasatch Outerwear
An Accounting Practice Case
For
QuickBooks
Bruce Schreiner
LDS Business College
Photographs Bruce Schreiner
Workbook LDS Business College
Table of Contents
Case Introduction
Company Preferences & Startup Information
Chart of Accounts
Beginning Balances
Beginning Inventory
Payroll Item List
Beginning Trial Balance
Original Document Transactions
January Documents
January Reports
8
48
February Documents
February Reports
54
96
March Documents
March Reports
102
138
April Documents
April Reports
144
195
May Documents
May Reports
201
274
June Documents
June Reports
280
382
July Documents
July Reports
388
488
Wasatch
Outerwear
is a
wholesale
distributor
of outdoor
clothing and equipment for campers,
hikers, and outdoor enthusiasts in
general. The company owner is Mark
Hansen. Mark is not paid a salary, but
normally is paid a monthly owners
distribution check. Wasatchs
customers are primarily retail specialty
stores who have been granted payment
terms, typically 2/10, N30.
As the company accountant, you report
directly to Mark Hansen. He will
occasionally send you memos
informing you of transactions he has
made. It will be your responsibility to
accurately record these in QuickBooks,
along with all the other normal
accounting transactions occurring in
each month.
The financial activities begin on
January 1st. You will have no
beginning accounts payable, but you
will have one accounts receivable
account to enter. On the following
pages you will be provided with a chart
of accounts, a beginning accounts
receivable report, a starting inventory
valuation, a payroll item list, a trial
balance, and some notes on the payroll
setup requirements.
Create a company database using the
QuickBooks interview. Enter all
necessary data so that you can produce
a trial balance as of January 1
matching the trial balance provided in
the subsequent pages, paying close
attention to the beginning inventory
valuation. Once youve matched the
starting trial balance, begin to analyze
and enter the transactions for the
month of January.
As the company accountant, you
receive all the original financial
documents, and are responsible to
properly and accurately interpret and
record them. For example, you may
receive a company check from one of
your customers paying an invoice.
They may or may not make mention of
which invoice the check is paying.
They may or may not note any
discounts taken. It will be your
responsibility to determine which
invoices to apply the payments to, and
if a discount is permissible, based upon
your terms agreed upon.
You may receive a purchase order,
authorizing an order to be prepared.
You will need to prepare an invoice
billing the customer. Some
transactions will be presented in the
form of company memos. A payment
memo might instruct you to pay a
vendor. A payroll memo will instruct
you to prepare payroll pay, etc.
When you have entered all the January
transactions, produce a trial balance,
make any adjusting entries required,
and see how well youve done. Correct
any errors, and proceed to the next
month. There are seven months of
transactions. You will be required to
prepare quarterly payroll tax reports
and payment submissions. Youll
receive company memos authorizing
you to do so at the appropriate time.
The original document approach in
The Wasatch Outerwear case affords
you with a highly realistic exercise. As
an accountant, you will see a stream of
original documents representing the
financial transactions of the business.
They will come in a wide variety of
formats varied by the needs and
preferences of each customer or vendor.
It is the accountants responsibility to
extract all the critical information to
accurately record the financial event.
As you begin your work on the January
documents, it may be useful to refer to
the January Transactions in List Form,
included at the end of the workbook. It
is presented in the traditional format.
It may be helpful to use the list as you
refer to each of the original documents.
By the time youve completed the
January transactions, you will most
likely not need the transactions in list
form, and youll be able to interpret
each of the original documents
correctly.
Company Preferences &
Startup Information
Company Name
Wasatch Outerwear, Inc.
Legal Name
Wasatch Outerwear, Inc.
Address
4341 Wild Horse Circle
Saratoga Springs, UT 84044
Main Phone
801-555-5554
Business Type
Wholesale distribution
EIN
12-3456789
Income Tax Form
1120S (S Corporation)
Inventory
Use Inventory & P.O.'s
Payroll
Full Payroll
State Tax Info.
Utah State Tax Commission
210 North 1950 West
Salt Lake City, UT 84045
Unemployment Tax
Rate
Taxable
Unemployment
Wage Limit
1.80%
$30,800
Customers (at Startup)
Customers Terms
Johnson Outlanders Co.
Differs by Customer and defined in first
document concerning the customer
Vendors (at Startup)
Vendor's Terms
None
Differs by Vendor and defined in first
document concerning the vendor
Page 1
10:42 AM
05/21/14
Wasatch Outerwear Inc
Account Listing
May
12/31/XX
Account
Type
1100 Canyonland First National Bank
Bank
1200 Accounts Receivable
Accounts Receivable
1210 Inventory Asset
Other Current Asset
1400 Truck
Fixed Asset
1405 Accum Depreciation - Truck
Fixed Asset
1500 Furniture and Equipment
Fixed Asset
1650 Warehouse Equipment
Fixed Asset
1700 Accumulated Depreciation - Equipment
Fixed Asset
2100 Acounts Payable
Accounts Payable
2400 Payroll Liabilities
Other Current Liability
3010 Capital Stock
Equity
3140 Shareholder Distributions
Equity
3200 Retained Earnings
Equity
4790 Sales
Income
4795 Sales Discount
Income
4800 Cash Discount
Income
5000 Cost of Goods Sold
Cost of Goods Sold
5010 Merchandise Returns and Disc
Cost of Goods Sold
5120 Shipping Expense
Expense
6000 Misc Expenses
Expense
6010 Auto and Truck Expenses
Expense
6020 Equipment Repair Expense
Expense
6040 Bank Service Charges
Expense
6170 Telephone and Internet Expenses
Expense
6240 Depreciation Expense
Expense
6245 Amortization Expense
Expense
6490 Office Supplies
Expense
6600 Payroll Expenses
Expense
6710 Rent Expense
Expense
6840 Travel Expense
Expense
6860 Utilities Expense
Expense
6870 Interest Expense
Expense
Page 2
Page 1 of 1
Johnson Outlanders Co., purchased merchandise in the amount
of $2,200 on December 15, prior year. At the time Johnson did
not receive any cash discount terms.
Page 3
Wasatch Outerwear Inc.
Beginning Inventory
as of December 31, prior year
Inventory
1000
1100
1200
1300
1400
1500
1600
Description
Xtex Rain Jacket
Oh Hand
50
Xtex Rain Pant
Merino Wool Top
JP Johanson Boot Inserts
Wasatch Gators
Wasatch Hiking Pole Set
Wasatch Hydrator Daypack
Total Inventory
210
10
15
10
10
305
Page 4
Cost
Sale Price
15.00
75.00
75.00
20.00
100.00
10.00
45.00
8.00
34.00
9.00
50.00
10.00
50.00
5360.00
Wasatch Outerwear Inc
7:16 AM
Payroll Item Listing
02/13/12
Payroll Item
Regulary Salary
Advance Earned Income Credit
Federal Unemployment
Federal Withholding
Medicare Company
Medicare Employee
Social Security Company
Social Security Employee
UT - Withholding
UT - Unemployment Company
Type
Yearly Salary
Federal Tax
Federal Tax
Federal Tax
Federal Tax
Federal Tax
Federal Tax
Federal Tax
State Withholding Tax
State Unemployment ...
Amount
Limit
Expense Account
Liability Account
6600 Payroll Expenses
0.6%
7,000.00
6600 Payroll Expenses
1.45%
1.45%
6.2%
6.2%
6600 Payroll Expenses
110,100.00
110,100.00
6600 Payroll Expenses
1.8%
29,500.00
6600 Payroll Expenses
2400 Payroll Liabilities
2400 Payroll Liabilities
2400 Payroll Liabilities
2400 Payroll Liabilities
2400 Payroll Liabilities
2400 Payroll Liabilities
2400 Payroll Liabilities
2400 Payroll Liabilities
2400 Payroll Liabilities
Tax Tracking
Compensation
Advance EIC Paym...
FUTA
Federal
Comp. Medicare
Medicare
Comp. SS Tax
SS Tax
SWH
Comp. SUI
Page 5
Page 1
Wasatch Outerwear
Trial Balance
Dec 31, prior year
Debit
Credit
1100 Canyonland First National Bank 180,000.00
1200 Accounts Receivable
2,200.00
1210 Inventory Asset
5,360.00
3000 Opening Balance Equity
0.00
3200 Retained Earnings
TOTAL
187,560.00
187,560.00
Page 6
187,560.00
Page 7
