Reference no: EM131697277
Case Problem -
On April 1, 2017, Lynn Garcia began her business, Lynn's Music Studio. In the first month of business, Lynn set up the music studio, provided guitar and piano lessons, and recorded month-end activity. In May, the second month of business, Lynn will purchase and sell inventory items of guitars, keyboards, music stands, and sheet music. For customers that pur- chase merchandise inventory, the terms of payment are 2/10, Net 30 Dais For illustration purposes, assume a 7% sales tax is charged on the sale of all inventory items. The company file includes the information for Lynn's Music Studio as of May 1, 2017.
1. Open the company file CH5 Lynn's Music Studio.QBW.
2. Make a backup copy of the company file and name it LMS5 [Your Name] Lynn's Music Studio.
3. Restore the backup copy of the company file. In both the Open Backup Copy and Save Company File as windows, use the file name LMS5 [Your Name] Lynn's Music Studio.
4. Change the Company Name to LMS5 [Your Name] Lynn's Music Studio.
5. Add the following inventory items to the Item List:
- Type: Inventory Part
- Item Name/Number: Keyboards
- Description on Purchase/Sales Transactions: Keyboards
- Cost: 75
- COGS Account: 5065 Cost of Keyboards Sold
- Preferred Vendor: Katie's Keyboards
- Sales Price: 150
- Tax Code: Tax-Taxable Sales
- Income Account: 4065 Sale of Keyboards
- Asset Account: 1265 Inventory of Keyboards
- Type: Inventory Part
- Item Name/Number: Sheet Music
- Description on Purchase/Sales Transactions: Sheet Music
- Cost: 3
- COGS Account: 5075 Cost of Sheet Music Sold
- Preferred Vendor: Strings, Sheets & Such
- Sales Price: 6
- Tax Code: Tax-Taxable Sales
- Income Account: 4075 Sale of Sheet Music
- Asset Account: 1275 Inventory of Sheet Music
Delete the following inventory item: Harmonicas
6. Using the appropriate window, record the following transactions for May:
May 3 - Purchased 30 guitars on account from Music Instruments, Inc., at $50 each, its Invoice No. GU75998.
May 3 - Purchased 30 keyboards on account from Katie's Keyboards at $75 each, its Invoice No. 10089-30.
May 3 - Purchased 30 music stands from Melody Music Equipment at $20 each, paid immediately, Check No. 9. Do not print check.
May 3 - Purchased 300 sheets of music of various themes from Strings, Sheets & Such at $3 each, paid immediately, Check No. 10. Do not print check.
May 4 - Sold 15 guitars for $100 each, 15 keyboards for $150 each, and 15 music stands for $40 each to Jefferson High School, Invoice No. 2012, terms 2/10, Net 30 Days. In addition, provided 15 hours of guitar lessons and 10 hours of piano lessons.
May 4 - Sold 10 keyboards for $150 each to Highland School, Invoice No. 2013, terms 2/10, Net 30 Days. In addition, provided 12 hours of piano lessons.
May 7 - Received full payment from Jefferson High School for Invoice 2009, Check No. 30531.
May 10 - Record the weekly cash sales of sheet music, 75 sheets at $6 each, Sale No. 2014. Leave the Customer: job field blank.
May 11 - Sold 3 guitars for $100 each, 3 keyboards for $150 each, and 3 music stands for $40 each to Mulligan Residence, Invoice No. 2015, terms 2/10, Net 30 Days. In addition, provided 5 hours of guitar lessons and 7 hours of piano lessons.
May 11 - Received full payment net of discount front efferson High School for Invoice No. 2012, Check No. 30711.
May 14 - Received full payment net of discount from Highland School, Check No. 76115.
May 17 - Purchased 20 keyboards on account from Katie's Keyboard Company at $75 each, its Invoice No. 10758-20.
May 17 - Purchased 10 music stands from Melody Music Equipment at $20 each, paid immediately, Check No. 11. Do not print check.
May 17 - Record the weekly cash sales of sheet music, 100 sheets at $6 each, Sale No. 2016.
May 21 - Sold 5 guitars for $100 each, 5 keyboards for $150 each and 5 music stands to Twin Lakes Elementary, Invoice No. 2017, terms 2/10, Net 30 Days. In addition, provided 8 hours of guitar lessons and 5 hours of piano lessons.
May 24 - Received a payment of $830 from Twin Lakes Elementary for Invoices 2004 and 2011, Check No. 7266.
May 24 - Record the weekly cash sales of sheet music, 115 sheets at $6 each, Sale No. 2018.
May 24 - Purchased 300 sheets of music of various themes from Strings, Sheets, & Such at $3 each, paid immediately, Check No. 12. Do not print check.
May 25 - Received full payment net of discount from Twin Lakes Elementary for Invoice No. 2017, Check No. 7384.
May 25 - Paid in full Music Instruments, Inc. (Check No. 13). Do not print check.
May 25 - Paid in full Katie's Keyboard Company, Invoice No. 10089-30 (Check No. 14). Do not print check.
May 31 - Record the weekly cash sales of sheet music, 145 sheets at $6 each, Invoice No. 2019.
May 31 - Upon reviewing the inventory, Lynn discovers that one guitar is damaged, through no fault of the manufacturer, and cannot be sold. Adjust the inventory on hand to remove the one guitar from the inventory. Inv. Adj. 1.
May 31 - Remit all sales taxes collected to the PA Dept. of Revenue, Check No. 15.
May 31 - Deposit all undeposited funds to the Cash - Operating account.
7. Display and print the following reports for May 1, 2017, to May 31, 2017:
a. Inventory Valuation Detail
b. Inventory Stock Status by Item
c. Purchases by Item Detail
d. Sales by Item Detail
e. Journal
f. Profit & Loss Standard (April 1, 2017-May 31, 2017)
g. Balance Sheet Standard