Open Peachtree Accounting System and Create a New Company.

Select Build your own Chart of Accounts.

Choose Accrual basis for the accounting method.
Setup the Company and enter all the business transactions/events.
Backup your file after completing the seatwork.

FOREVER YOUNG

Sebastian Young played quarterback for Los Angeles Raiders for 12 years of his professional football career. As a team leader,
Sebastian guided his team to three Super Bowl victories and earned the respect of his teammates, the coaching staff, the press, and
fans across the country. Now retired, Sebastian is a guest commentator for a variety of sports talk shows on radio and televisions. He
recently formed a sole proprietorship called Forever Young to promote himself as a motivational speaker to large corporations and
organizations. He has hired Cory Walsh to promote and coordinate his appearances and Anne Sunshine to manage the office.
Sebastian has contacted some vendors and customers and is about to embark on a new business adventure. He has asked you to set
up an accounting system for the business and has given the following information:

 Company and legal name: Forever Young

 Tax ID: 94-9723900
 Address: 100 Westwood Blvd., Los Angeles, CA 90024, USA
 Phone: 310-555-2324
 Industry: Professional Consulting / Consulting Company
 Company Organizations: Sole Proprietorship
 Fiscal year starts: January 2020
 Services only, no sales tax, with estimates, with sales receipts and statements, no progress invoicing, keep track of bills you
owe, print checks, accept credit and debit cards, keep track of time, has W-2 employees, use 1/1/20 as the first day of the
quarter
 Existing bank account: Washington Mutual, bank account name: “Washington Mutual Checking,” account number: 390093912,
opened 1/1/20
 Income and expense accounts: accept recommended accounts

Preferences

 Accounting: Use accounts and require account numbers.

 Checking: Use the checking account as the default to write checks, pay bills, pay sales tax, and make deposits.

Chart of Accounts

Account ID Account Description Account Type

10100 Cash on Hand Cash
10200 Washington Mutual Account Cash
11000 Accounts Receivable Accounts Receivable
11500 Allowance for Doubtful Account Accounts Receivable
12000 Inventory Inventory
14200 Notes Receivable-Current Other Current Assets
15000 Furniture and Fixtures Fixed Assets
15100 Equipment Fixed Assets
15200 Automobiles Fixed Assets
15500 Building Fixed Assets
16900 Land Fixed Assets
17000 Accum. Depreciation - Furniture and Fixtures Accumulated Depreciation
17100 Accum. Depreciation - Equipment Accumulated Depreciation
17200 Accum. Depreciation - Automobile Accumulated Depreciation
17500 Accum. Depreciation - Building Accumulated Depreciation
19200 Note Receivable Other Assets
20000 Accounts Payable Accounts Payable
23200 Wages Payable Other Current Liabilities
23400 Federal Payroll Taxes Payable Other Current Liabilities
23600 State Payroll Taxes Payable Other Current Liabilities
23800 FICA Taxes Payable Other Current Liabilities
23900 Income Taxes Payable Other Current Liabilities
27000 Notes Payable-Noncurrent Long Term Liabilities
39005 Retained Earnings Equity-Retained Earnings
39006 Owner's Capital Equity-gets closed
39007 Owner's Drawing Equity-gets closed
40000 Consulting Income Income
40400 Interest Income Income
57000 Cost of Sales-Salaries and Wages Cost of Sales
60100 Advertising Expense Expenses
61000 Auto Expenses Expenses
61500 Bad Debt Expense Expenses
62000 Bank Charges Expenses
64000 Depreciation Expense Expenses
66500 Income Tax Expense Expenses
67000 Insurance Expense Expenses
67500 Interest Expense Expenses
72000 Payroll Tax Expense Expenses
 74000 Rent or Lease Expense Expenses
77000 Salaries Expense Expenses
77500 Wages Expense Expenses
78000 Utilities Expense Expenses

Item Information

 Type: Service, Number: serv001, Description: Full-Day Seminar, U/M: Day, Rate: $10,000, Consulting Income
 Type: Service, Number: serv002, Description: Half-Day Seminar, U/M: Half-Day, Rate: $6,000, Consulting Income
 Type: Service, Number: serv003, Description: One-Hour Presentation, U/M: Hour, Rate: $2,000, Consulting Income

Customer Information

 Default Terms: Net 30, Credit Limit: $25,000, Discount: 0%

 Customer Name: Levi, Company Name: Levi Strauss, Customer Type: company, Address: 100 Market St., San Francisco, CA
94099, USA, Terms and Credit: Default
 Customer Name: Boeing, Company Name: Boeing Aerospace, Customer Type: company, Address: 139 Boeing Park Dr., El
Segundo, CA 90233, USA, Terms and Credit: Default

Vendor Information

 Default Terms: Net 30, Credit Limit: $50,000, Discount: 0%

 Vendor Name: Fleet, Company Name: Fleet Promotions, Vendor Type: company, Address: 3099 Wilshire Blvd. #300, Los
Angeles, CA 90024, USA, Terms and Credit: Default
 Vendor Name: Galas, Company Name: Galas & Associates, Vendor Type: company, Address: 37321 Santa Monica Blvd.
#100, Los Angeles, CA 90024, USA, Terms and Credit: Default
 State: California, State tax, unemployment, state training tax, and state disability tax vendor: State Tax Board (new vendor), ID
number: 930808, Payroll Expense (Liability) account: State Payroll Taxes Payable, California Unemployment tax rate: 3.4%.
 Federal: California, Federal tax and unemployment tax vendor: Federal Tax Board (new vendor), ID number: 931919, Payroll
Expense (Liability) account: Federal Payroll Taxes Payable.
 Federal Insurance: Social Security tax and Medicare tax vendor: FICA Tax Board (new vendor), ID number: 932727, Payroll
Expense (Liability) account: FICA Taxes Payable.

Payroll and Employee Information

 Payroll is calculated manually (Do It Yourself In-house, then Do It Yourself) and payroll taxes are paid quarterly.
 Default Information: Employee
Employee Fields Company Fields
Field Name G/L Account Field Name G/L Account
Federal Income Federal Payroll Taxes Payable Social Security FICA Tax Payable
Social Security FICA Tax Payable MEDICARE FICA Tax Payable
MEDICARE FICA Tax Payable Federal Unemployment Federal Payroll Taxes Payable
State Income State Payroll Taxes Payable State Unemployment State Payroll Taxes Payable
State Disability Insurance State Payroll Taxes Payable Employee Training Tax State Payroll Taxes Payable

 Employee Name: Cory Walsh, Social Security number: 339-09-7466, Gender: Male, Address: 399 Sunset Blvd., Bel Air, CA
9033, USA. Payroll item: Officer Salary, which represents a regular annual Salary of $80,000 recorded to Payroll Expenses
account and paid semi-monthly. Filing Status: Single. Hire Date 1/1/20.
 Employee Name: Anne Sunshine, Social Security number: 232-38-0098, Gender: Female, Address: 2983 Olympic Blvd., Los
Angeles, CA 90032, USA. Payroll item: Staff Hourly, which represents a regular hourly salary of $20 per hour recorded to the
Payroll Expenses account and paid semi-monthly, Hours per pay period: 23. Filing Status: Single, Hire date 1/1/20.

Enter the following transactions:

Event # Date Business Event

1 1/2/20 Sebastian deposited $20,000 into his new company’s checking account as his initial investment.
2 1/3/20 Paid Galas $6,000 in legal fees for setting up contracts with future customers (classify as Professional
Fees Expense) using Check No. 1.
3 1/3/20 Signed a contract with Panasonic (new customer with terms due on receipt) to speak at its sales
convention (half-day seminar) on 1/5/20. Collected a 50% deposit of $3,000 and immediately deposited
this Check No. 9873 into the checking account.
4 1/4/20 Paid Office Depot (a new vendor) $4,000 for furniture using Check No. 2.
5 1/4/20 Paid Classic Leasing (a new vendor) $8,000 rent on office space using Check No. 3. (Half of payment
represents January rent and half represent security deposit.) (Classify a Security Deposit account, other
asset account.)
6 1/5/20 Spoke at the Panasonic sales convention, received remaining amount owed, provided invoice 501 to
customer (billing them the services rendered), and applied previous credit.
7 1/7/20 Received and deposited Panasonic Check No. 9898 for $3,000 into checking account as final payment for
services rendered.
8 1/9/20 Signed a contract with Gateway (new customer with terms due on receipt) to speak at its sales convention
(Full-day seminar) on 1/12/20. Collected a 50% deposit of $5,000 and immediately deposited this Check
No. 15487 into the checking account.
9 1/10/20 Purchased supplies (new other current asset type account) from office depot for $1,500 using Check No.
4; the supplies will be used over the next six months.
10 1/11/20 Signed a contract with Adobe (new customer with terms due on receipt) to speak at its officers’ retreat (full-
day seminar) on 1/19/20. Collected a 50% deposit of $5,000 and immediately deposited this Check No.
698747 into the checking account.
 11 1/12/20 Spoke at the Gateway sales convention, received remaining amount owed, provided invoice 502 to
customer (billing them the services rendered), and applied previous credit.
12 1/14/20 Received and deposited Gateway Check No. 15623 for $5,000 into checking account as final payment for
services rendered.
13 1/15/20 Paid semi-monthly payroll starting with Check No. 5 for the period 1/1/20 to 1/15/20. Cory worked for
salary during the period. Anne worked 23 hours during this period. Payroll tax information is shown in
Table 1.

Table 1. Payroll and Earnings Information for Forever Young

Item Cory Anne

Earnings 3,333.33 460.00
Federal Withholding -633.33 -87.40
Social Security Employee -206.67 -28.52
Medicare Employee -48.33 -6.67
CA Income tax -266.67 -36.80
CA Disability -20.00 -2.67
CA Employee Training Tax 3.33 0.46
Social Security Employer 206.67 28.52
Medicare Employer 48.33 6.67
Federal Unemployment 26.67 3.68
CA Unemployment 113.33 15.64
Check Amount 2,158.33 297.85

Event # Date Business Event

14 1/16/20 Sebastian ran into an old friend, Larry Rice, at one of his speaking engagements and decided to hire Larry
to speak with him at selected events. Larry agreed to work on an hourly basis at $500 per hour, and
Sebastian planned to bill Larry’s time to customer at $750 per hour to cover overhead costs. Larry’s Social
Security number is 133-20-7357; he’s married with one income and is subject to all California’s taxes. He’ll
constitute a new payroll item called Professional Hourly and will be paid semi-monthly like other
employees. Be sure to set up a new service item named serv004, description: Professional Services, rate:
$750, and an activity item named act001, description: Professional Service Activity, rate: $750, to account
Consulting Income. U/M: Hour.
15 1/17/20 Signed a contract with Microsoft (Terms: net 30) to provide a full-day seminar on 1/25/20 at their sales
convention with Mr. Rice speaking for two hours. Received $2,000 deposit via Microsoft’s Check No.
09380991, which was deposited that day.
16 1/19/20 Spoke at the Adobe officer’s retreat (a full-day seminar), prepared Invoice No. 503, applied the previous
credit, and received the remaining $5,000 due via Adobe’s Check No. 698903, which was immediately
deposited into the company’s checking account.
17 1/21/20 Borrowed $50,000 on a three-year 7% note payable from Wells Fargo Bank. The funds were deposited
into the company’s checking account that day.
18 1/22/20 Wrote Check No. 7 in the amount of $6,000 to Westwood Design and Production for the purchase of
brochures to promote future speaking engagements. Sebastian expects these brochures to last throughout
for two years and treated them as Prepaid Advertising.
19 1/25/20 Provided a full-day seminar at Microsoft’s sales convention, where Mr. Rice spoke two hours. (Hint:
Record his time on a time ticket.)
20 1/28/20 Prepared Invoice No. 504 to Microsoft (billing it for the full-day seminar and Mr. Rice’s time), applied the
previous credit, and mailed the invoice to Microsoft’s accounting department.
21 1/30/20 Wrote Check No. 8 to Global Travel for $5,600 in travel expenses.
22 1/30/20 Wrote Check No. 9 to Hertz for $800 in automobile expenses.
23 1/30/20 Wrote Check No. 10 to Cingular Wireless for $500 of telephone expense.
24 1/31/20 Paid semi-monthly payroll starting with Check No. 11 for the period 1/16/20 to 1/31/20. Payroll tax is
shown in Table 2. Anne worked 45 hours during this period.
25 1/31/20 Signed a contract with ITP Thomson (Terms: net 30) to provide a full-day seminar on 2/12/20 at their sales
convention with Mr. Rice speaking for three hours. Received a $3,000 deposit via ITP’s Check No. 15474,
which was deposited the next day.
26 1/31/20 Wrote Check No. 14 to Sebastian Young for $5,000 as an owner’s drawing.

Table 1. Payroll and Earnings Information for Forever Young

Item Cory Anne Larry

Earnings 3,333.33 900 1,000
Federal Withholding -633.33 -171.00 -190.00
Social Security Employee -206.67 -55.80 -62.00
Medicare Employee -48.33 -13.05 -14.50
CA Income tax -266.67 -72.00 -80.00
CA Disability -20.00 -5.40 -6.00
CA Employee Training Tax 3.33 0.90 1.00
Social Security Employer 206.67 55.80 62.00
Medicare Employer 48.33 13.05 14.50
Federal Unemployment 26.67 7.20 8.0
CA Unemployment 113.33 30.60 34.0
Check Amount 2,158.33 582.75 647.50