Financial Accounting

QuickBooks Pro 2019 Enter Loan Payments From Amortization Table

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Enter principle deduction and related interest for loan payments on an installment note in QuickBooks Pro 2019. We will first generate an amortization table. The amortization table is often not given in a loan agreement but is needed to break out interest and principal portions of a loan. The payments of most installment agreement will be the same each period but the allocation of interest expense and principal will very. We will also talk about other options for entering the loan payment into QuickBooks and making adjusting entries at the end of the accounting period. Once we have created the amortization table we will enter the first two payment into QuickBooks. We will enter the first payment into the check register using the split option to enter multiple accounts. We will enter the second payment into the check form. We will then check the financial statements. We will see cash going down for the amounts paid, interest expense going up but not being the same for the two payments and the loan balance going down but not by the same amount for the two payments. We will then check that the loan balance in QuickBooks matches the balance on the amortization schedule.
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Financial Accounting

QuickBooks Pro 2019 Pay Employees u

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Pay employees using QuickBooks Pro 2019. To pay employees in QuickBOoks PRo 2019 we need to have one of the payroll option set up in the accounting system. For options on how to set up payroll see a prior presentation. We are using the manual payroll option which is a great tool for learning payroll and how to enter data in the accounting software. One payroll is set up we will typically see three icons in the employee section of the home page. We will select the middle icon when paying employees. Weill want to make sure the dates are correct. There are two dates to consider when entering payroll into QuickBooks. We need the pay period end date and we need the check date. These two dates may be the same day but we often write actual check after the pay period has ended. We will then analyze each employees wages and witholdings, manually entering withholdings like federal income tax FIT, social security, and Medicare, the FICA taxes. We will also manually enter the employer taxes. We will print the pay checks and then to to the check register to analyze the printed pay checks. We will then look at the financial statement to see the effect of processing payroll on the balance sheet and income statement or profit and loss. Processing payroll will increase payroll expense increase payroll liability and decrease cash. for more accounting and QuickBooks information see accounting website. http://accountinginstruction.info/

 

Financial Accounting

QuickBooks Pro 2019 Inventory Tracking Options

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Inventory tracking options for QuickBooks Pro 2019. There are many different ways to track inventory using accounting software like QuickBooks Pro 2019. We can enter the inventory into the system and QuickBooks can help us track the inventory. QuickBooks will increase inventory when we purchase and record the decrease when we sell the inventory as well as the related expense in the form of cost of goods sold. Entering inventory into QuickBooks in this way would be using a perpetual inventory system. We could also use a periodic inventory system. We could track the inventory in some other format, such as an Excel sheet and only record the purchase of inventory and not reduce inventory with each sale. Instead we can count the inventory at the end of the day, week, or month and then make periodic adjustments, reducing inventory to our count and recording the related expense on a periodic basis. Finally, if we do not hold a lot of inventory we could just expense the inventory at the time of purchase rather then at the time of sale or on a periodic basis, this method not being proper accrual accounting but is a simple method that could provide the information we need.
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Financial Accounting

QuickBooks Desktop Vs QuickBooks Online – 2019

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QuickBooks Desktop vs. QuickBooks online will discuss some of the pros and cons between the two major QuickBooks categories. When choosing accounting software there are many options. If we have narrowed down the field to QuickBooks we need to keep narrowing. QuickBooks has two major categories, QuickBooks Online and QuickBooks Desktop. Within each category we have more options to consider.
Many of the differences between the two QuickBooks software packages stem from one being cloud based and one being installed on the computer. QuickBooks Desktop has a one time fee while QuickBooks online is paid with a subscription. QuickBooks Pro can handle multiple user with one QuickBooks program while we wee to set up new accounts for each new company when using QuickBooks Online. QuickBooks Desktop allows for static backups to be made while QhiclBooks online is stored on the Intuit servers. The look and feel of the two QuickBooks packages are much different.
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Financial Accounting

Statement of Cash Flow Indirect Method Cash & Net Income

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We will start to put together a statement of cash flows using the indirect method. We have constructed a worksheet from a comparative balance sheet showing balance sheet accounts for the current period, the prior period and the difference or change between the two. Our next step is to allocate these changes in balance sheet account from the worksheet to the statement of cash flows, finding the correct section of either operating activities, investing activities, or financing activities. The starting point is often the most confusing. The end result of our cash flow statement is basically the change in cash. We start the cash flows from operations section with net income but we would like to think about net income as a change in balance sheet accounts. Net income will be part of the change in retained earnings.
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Financial Accounting

Job Cost System Cost Flow

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Job cost system cost flows will provide an overview of cost flows in a job cost system. The job cost system is one of two cost tracking systems typically used when producing inventory, the other being a process cost system. Both systems will need to track the costs from raw material to converting those raw materials to finished goods. The job cost system will support this process by allocating costs to jobs and tracking the costs of each job using a job cost system. When producing inventory we will start by purchasing materials. We will then transfer the materials to either work in process or to orverhead depending on whether we can apply the cost to a job. We will then apply direct labor to the work in process account and use an estimate to apply overhead. Once the inventory is completed we will move it from the work in process account to finished goods, the finished goods account also being supported by job sheets. Finally, we will sell the finished goods inventory and move the cost from finished goods to cost of goods sold.
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Financial Accounting

Effective Interest Bond Discount Amortization in Excel

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Effective interest bond discount amortization in Excel will calculate the amortization of a bond discount using the effective method. A bond discount results when bonds are issued for less then the face amount on the bond resulting in a journal entry that will debit cash, credit bonds payable, and credit discount. We will then need to decrease the discount during the life of the bond. We will reduce the discount to interest expense during the bond life. We can use either a straight line method or the effective method to amortize the discount. The straight line method is not the preferred accrual accounting method because it does not apply the matching principle as well as the effective method. The effective method is more complex, however.
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Financial Accounting

Direct Method Worksheet Statement of Cash Flows

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Direct method worksheet – statement of cash flows will put together a working in Excel that we will use to build the statement of cash flows using the direct method. Putting together a well formatted worksheet is the most important step to being able to complete a statement of cash flows. To put a statement of cash flows worksheet together we will need a comparative balance sheet, or balance sheet numbers for the current period and the prior period. The statement of cash flows worksheet we use for the direct method will be similar to the statement of cash flows worksheet we use for the indirect method but not the same. We will include the income statement accounts for the current period when performing the statement of cash flows using the direct method.
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Financial Accounting

Bond Retirement – Journal Entry to Retire a Bond

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A bond can be retired before the maturity date or at the maturity date. The retirement of a bond means we will be closing the bond by paying out what is owed. When closing a bond at the end of the bond term, after all interest payments on the bond have been paid, is a simple journal entry. We will be left with the face amount of the bond on the trial balance after all interest payments have been made and after the amortization of the bond discount or bond premium in complete. We will debit bond payable making it go down to zero and credit cash.
A bond that is closed out before maturity results in a transaction that is more complex. Bonds that close out before maturity are callable bonds, providing the issuer the option to call the bond as some price in the future.
The journal entry to close out a bond before maturity will include a debit to bonds payable a credit to discount or a debit to premium for the amount not yet fully amortized, a credit to cash and a debit to loss or credit to gain on the transaction.
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