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