The grand opening of S&S is two weeks away. Scott Parry and Susan Gonzalez are working long hours to make the final arrangements for the store opening. Most of the employees have already been hired; training is scheduled for next week. Susan has ordered inventory for the first month. The store is being remodeled and will have a bright, cheery decor. All seems to be in order—all, that is, except the accounting records.
Like many entrepreneurs, Scott and Susan have not given as much thought to their accounting records as they have to other parts of their business. Recognizing they need qualified accounting help, they hired a full-time accountant, You Fleming. Scott and Susan think you are perfect for the job because of his three years of experience with a national CPA (Certified Public Accountants) firm. You are looking forward to working for S&S because he has always wanted to be involved in building a company from the ground up.
During Your first day on the job, Susan gives you the invoices for the inventory she purchased and a folder with their bank loan documentation, with the first payment due after the grand opening. She also hands to you a folder containing information on rental payments, utilities, and other expenses. Susan tells you that she and Scott know little about accounting and you will run the accounting end of S&S. She adds that the only thing they have done so far is to open a checking account for S&S and that they have kept the check register updated to monitor their cash flow.
Scott explains that the sales staff is paid a fixed salary and commissions and that all other employees are paid hourly rates. Employees are paid every two weeks, with their first paychecks due next week. You asks Scott what accounting software the company is using. Scott replies that he and Susan have not had time to tackle that aspect yet. Scott and Susan looked at some of the popular packages but quickly realized that they did not know enough about accounting to make an intelligent choice. Scott then tells you that his first task should be to purchase whatever accounting software he thinks will be best for S&S. After Scott leaves, you feels both excited and a little nervous about this responsibility for creating an accounting information system (AIS) for S&S. Although you has audited many companies, you have never organized a company’s books and is unsure how to go about it.
- What Accounting Software will you choose (Search any existing Accounting Software?
- Why do you prefer the one you have chosen from other Accounting software (Compare and contract their features?
- How can this accounting software help your business?
The grand opening of S&S is two weeks away. Scott Parry and Susan Gonzalez are working long hours to make the final arrangements for the store opening. Most of the employees have already been hired; training is scheduled for next week. Susan has ordered inventory for the first month. The store is being remodeled and will have a bright, cheery decor. All seems to be in order—all, that is, except the accounting records.
Like many entrepreneurs, Scott and Susan have not given as much thought to their accounting records as they have to other parts of their business. Recognizing they need qualified accounting help, they hired a full-time accountant, You Fleming. Scott and Susan think you are perfect for the job because of his three years of experience with a national CPA (Certified Public Accountants) firm. You are looking forward to working for S&S because he has always wanted to be involved in building a company from the ground up.
During Your first day on the job, Susan gives you the invoices for the inventory she purchased and a folder with their bank loan documentation, with the first payment due after the grand opening. She also hands to you a folder containing information on rental payments, utilities, and other expenses. Susan tells you that she and Scott know little about accounting and you will run the accounting end of S&S. She adds that the only thing they have done so far is to open a checking account for S&S and that they have kept the check register updated to monitor their cash flow.
Scott explains that the sales staff is paid a fixed salary and commissions and that all other employees are paid hourly rates. Employees are paid every two weeks, with their first paychecks due next week. You asks Scott what accounting software the company is using. Scott replies that he and Susan have not had time to tackle that aspect yet. Scott and Susan looked at some of the popular packages but quickly realized that they did not know enough about accounting to make an intelligent choice. Scott then tells you that his first task should be to purchase whatever accounting software he thinks will be best for S&S. After Scott leaves, you feels both excited and a little nervous about this responsibility for creating an accounting information system (AIS) for S&S. Although you has audited many companies, you have never organized a company’s books and is unsure how to go about it.
- What Accounting Software will you choose (Search any existing Accounting Software?
- Why do you prefer the one you have chosen from other Accounting software (Compare and contract their features?
- How can this accounting software help your business?
Related questions
B&L Landscapes, Inc. Mini Practice Part1
Bill Graham started his career mowing lawns for neighbors whilehe was in junior high school. Bill worked summers for the localgolf course while he was in high school and after he graduated, hestarted his own lawn care business, Billâs Lawn Care. In additionto lawn care, he also sells two types of fertilizer. Bill is readyto expand his business and wants to add sprinkler systems to hisproduct offering. Larry Miller has an established sprinkler systembusiness and they have agreed to merge their two businessestogether. They considered the partnership form of business but havedecided to incorporate. You are taking an accounting class at thelocal community college and have been helping Bill keep theaccounting records for his business. He has asked you to stay onand establish and maintain the accounting records for the newcompany, B&L Landscapes, Inc.
Bill and Larry have hired an attorney and filed theincorporation paperwork with the state of Colorado. In the articlesof incorporation, they are authorized to issue 150,000 shares of $1par value common stock and 5,000 shares of $100 par value, 5%,non-cumulative, non-participating preferred stock. The newcorporation will be created on July 1, 2014. The fair value of theassets and liabilities of both companies are as follows:
Account | Billâs Lawn Care |
|---|---|
Cash | $12,500 |
Accounts Receivable | 500 |
Prepaid Insurance | 500 |
Inventory | 1,000 |
Land | 8,000 |
Building | 25,000 |
Equipment | 7,500 |
Accounts Payable | 5,000 |
Notes Payable (due 4/30/2024) | 45,000 |
Larryâs Sprinkler Systems | |
Cash | $10,000 |
Accounts Receivable | 3,000 |
Prepaid Insurance | 1,000 |
Inventory | 5,000 |
Equipment | 11,000 |
Accounts Payable | 5,000 |
Bill and Larry have decided that they will each receive 1 shareof common stock for every dollar of working capital (assets lessliabilities) they contribute to the new company. You may assumethat all the assets and liabilities listed above will be part ofthe new company. Additionally, they issue stock as follows:
Jul 1 Issued 30 sharesof preferred stock for $100 per share cash to Billâs father.
Jul 1 Issued 20 sharesof preferred stock for $100 per share cash to Larryâs mother.
Instructions:
Using the chart of accounts provided below, and the Exceltemplate provided with this assignment, prepare journal entries, ingood form, to record the creation of B&L Landscapes, Inc. andthe issuance of stock. Use July 1 for the creation journal entries.Start with Page 1 of the General Journal.Explanations are optional.
Prepare a classified balance sheet for B&L Landscapes, Inc.for July 1, 2014.
During the first year of operations, B&L Inc. earned netincome of $22,500. They also declared a $2,000 dividend on June 10,2015 payable on June 30, 2015. Prepare an allocation of thedividend to each class of stock.
Record the journal entries for the dividend declaration andpayment on Page 2 of the General Journal.Explanations are optional.
Prepare the Stockholdersâ Equity section of the balance sheetfor June 30, 2015.
