MUHAMMAD AMIN AND CO.

CHARTERED ACCOUNTANTS

EXCELLENT FOOD
MANUFACTURER
Quick Book Training
 Disclaimer
This data is based purely fictional and we are not responsible for any resemblance of data with any other
industry.
 Table of Contents
1 SETTING UP AND MANAGING QUICKBOOKS DATA FILES..............................................................................2

1.1 LEARNING OUTCOME.......................................................................................................................................2

1.2 BRIEF INTRODUCTION OF COMPANY....................................................................................................................2
1.2.1 Key Points...............................................................................................................................................2
1.3 CREATING AND DESIGNING COMPANY IN QUICKBOOKS...........................................................................................2
1.4 SETTING UP PREFERENCES................................................................................................................................2
1.4.1 Manually creation of Chart of Account...................................................................................................2
1.4.2 Importing Chart of Accounts...................................................................................................................3
1.5 UNDERSTANDING LISTS.....................................................................................................................................3
1.6 COMPLETING OUR LISTS....................................................................................................................................3
1.7 UNDERSTANDING AND DESIGNING WORKAROUNDS...............................................................................................3

2 BUSINESS STARTUP ENTRIES........................................................................................................................ 3

3 ACCOUNTS PAYABLE AND PURCHASING PROCESS........................................................................................4

3.1 PURCHASE OF FIXED ASSETS..............................................................................................................................4

3.2 VENDORS.......................................................................................................................................................4
3.3 PURCHASE OF MATERIAL...................................................................................................................................4
3.4 PAY BILLS.......................................................................................................................................................5
3.5 CREDIT NOTES/MATERIAL RETURNS....................................................................................................................5
3.6 ENTERING BILLS AGAINST OVER HEADS...............................................................................................................5

4 REPORTS..................................................................................................................................................... 5

5 INVENTORY ACTIVITIES............................................................................................................................... 6

5.1 STANDARD AND BEST PRACTICE (ASSEMBLIES)......................................................................................................6

5.1.1 Build Assemblies.....................................................................................................................................7
5.1.2 Inventory Adjustments............................................................................................................................7
5.2 PERIODIC INVENTORY (CONVENTIONAL METHOD).................................................................................................7
5.3 WORK AROUND (CUSTOMIZED WAY)..................................................................................................................7
5.4 REPORTS........................................................................................................................................................7
1 SETTING UP AND MANAGING QUICKBOOKS DATA FILES

1.1 LEARNING OUTCOME

I. To discuss decisions that must be made before using QuickBooks
II. To create a new QuickBooks company using the Easy Step Interview
III. To set QuickBooks preferences
IV. To discuss Single vs. Multi user mode and how to add users
V. To discuss different QuickBooks file types and Backup Options
VI. To Create Chart or Import Chart of Account in QuickBooks

A. BRIEF INTRODUCTION OF COMPANY

Excellent Food is a Manufacturing Industry incorporated under Pakistani Law in Pakistan. It is going to
start manufacturing of food products for kids. It is going to start candies and bubbles.
Mr. Best and Mr. Good are two directors in Excellent Food. They have purchased equal Shares of
Excellent Food. Excellent Food shall make sales through distribution network prevailing in country. They
have hired an Accountant to look after all their accounting matters from very first day. The Accountant
has gathered following data before he starts working.
1.1.1 Key Points
I. Nature of Business: Manufacturing
II. Industry Type: Fast Moving Consumer Goods
III. No of Units: 1
IV. Multiple Products Ranges: Yes
V. Inventory Management:Yes
VI. Production: Yes
VII. Multiple Users: Yes
VIII. Multiple Warehouse: Yes

After analyzing the need and requirement of Excellent Food the Accountant has selected the Enterprise
Version of QuickBooks.

1.2 CREATING AND DESIGNING COMPANY IN QUICKBOOKS

Created Company as per the need of industry requirement.

1.3 SETTING UP PREFERENCES

Select Preferences as per your own industry requirement.
1.3.1 Manually creation of Chart of Account
I. Introduction
II. Use of Account Codes
III. Use of Levels/Parent or Sub Account Relationship
IV. Creating New Accounts
V. Entering Opening Balance
 i. Importing Chart of Accounts
I. Importing chart of Account Perquisites

A. UNDERSTANDING LISTS
I. Chart of Account
II. Item List
III. Fixed Assets Item List
IV. Price Level List
V. Billing Rate Level List
VI. Class List
VII. Other Name List
VIII. Customer and Vendor Profile List

A. COMPLETING OUR LISTS

I. Item List
II. Creating Bill of Material
III. Fixed Assets Item List
IV. Class List
V. Customer and Vendor Profile List

A. UNDERSTANDING AND DESIGNING WORKAROUNDS

I. What are work arounds?
II. Why do we use work arounds?
III. When to use work arounds?

IV. BUSINESS STARTUP ENTRIES

I. Mr. Best and Mr. Good Introduced Capital In Business Amounting Rs. 6000,000 and Rs. 4000,000
II. Excellent Food arranged with its bank a Loan Facility amounting Rs. 10,000,000 for which it has
paid an equity 20%. Loan is payable in 5 years.
2 ACCOUNTS PAYABLE AND PURCHASING PROCESS

2.1 PURCHASE OF FIXED ASSETS

After setting up Company Excellent Food Purchased Fixed Assets for cash for its Business as per given
detail:

Asset Description Amount Rs.

Land for Business 10,000,000
Building for Business 5,000,000
Plant for Candy 2,500,000
Plant for Bubble 1,500,000
Furniture and Fixtures 1,000,000

Excellent Food purchased motor vehicles for its business on lease.

Asset Description Amount Rs.
Motor Vehicle – Factory 3,000,000
Motor Vehicle – Owner 2,000,000

2.2 VENDORS
Excellent food has following Vendors
I. Raw Material Vendor
II. Packing Material Vendor
III. Fast Transport
IV. Super Stationary
V. Cash Purchases

A. PURCHASE OF MATERIAL
Purchase Department issued following purchase orders for the Material required by Production
Department.
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Purchases Rate Qty Rate Qty Rate Qty Rate Qty
Sugar 80.00 4418 75.00 6113 85.00 7871 80.00 7652
Glucose 70.00 3350 65.00 4620 75.00 6041 70.00 5894
Flavor 1,000.00 231 900.00 318 1,100.00 422 1,000.00 413
Color 1,500.00 87 1,400.00 118 1,600.00 162 1,500.00 159
Wrapper 500.00 347 450.00 474 550.00 647 500.00 637
Box Candies 3.00 13860 2.50 19404 3.50 23562 3.00 22572
Box Bubble 2.00 6930 1.50 9009 2.50 15246 2.00 15675
Ctn Candy 50.00 1155 45.00 1617 55.00 1964 50.00 1881
Ctn Bubble 50.00 578 45.00 751 55.00 1271 50.00 1306
2.3 PAY BILLS
Finance Department Made Issued Cheques to Vendors against the material purchased.

Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total

Payment to Raw Material Vendor (759,066) (1,158,061) (1,717,725) (1,710,149) (5,345,001)
Payment to Packing Material Vendor (252,252) (368,399) (599,688) (592,561) (1,812,900)

2.4 CREDIT NOTES/MATERIAL RETURNS

Purchase Department issued following Credit Notes:
Return of 500 Kgs of Sugar to Mr. Raw Material
Return of 25 Kg Of Color to Mr. Raw Material
Damage of 50 Kg of Wrapper to Mr. Packing Material.
Damages of Ctns Candy 100 Ctns Lost During Transportation due to Rain.

2.5 ENTERING BILLS AGAINST OVER HEADS.

Expenses Quarter 1 Quarter 2 Quarter 3 Quarter 4
Oil and Lubricants Expenses (Non-Inventory Part) 42,000 57,750 76,650 82,950
Hygiene Expenses (Services) 5,000 5,000 5,000 5,000
Indirect Supplies Expenses (Non-Inventory Part) 43,200 59,400 78,840 85,320
Freight Inward Expenses (Services) 45,600 62,700 83,220 90,060
Printing and Stationary (Direct Account) 38,400 52,800 70,080 75,840

These vendors are paid immediately as their services are billed.

3 REPORTS
4 INVENTORY ACTIVITIES
Store Manager opened following list of material in inventory list.

Item Code Material Type

0001 Sugar Inventory Item
0002 Glucose Inventory Item
1000 Flavor Inventory Item
2000 Color Inventory Item
3001 Wrapper Inventory Item
4001 Box Candies Inventory Item
4002 Box Bubble Inventory Item
5001 Ctn Candy Inventory Item
5002 Ctn Bubble Inventory Item
6100 Candy Assembly Item
6200 Bubble Assembly Item
8001 Indirect Supplies Non-Inventory Item
8002 Oil and Lubricant Non-Inventory Item
9001 Freight Inward Services
9002 Hygiene Expenses Services

4.1 STANDARD AND BEST PRACTICE (ASSEMBLIES)

Production Manager has approved the following recipe for the finished goods
Item UO
M Qty
Candies Kg 5.00
Sugar Kg 3.20
Glucose Kg 2.30
Flavor Kg 0.15
Color Kg 0.05
Raw Material Kg 5.70
Wrapper Kg 0.20
Candies Box Nos 12.00
Candy Carton Nos 1.00

UO
Item M Qty
Bubble Kg 2.50
Sugar Kg 1.25
Glucose Kg 1.20
Flavor Kg 0.10
Color Kg 0.05
Raw Material Kg 2.60
Wrapper Kg 0.20
Bubble Box Nos 12.00
 Bubble Carton Nos 1.00
4.1.1 Build Assemblies
The following Products has been finalized by Manager Stores as he received production transfer note
from production department
Item
Month 1 Month 2 Month 3 Month 4 Total
Candies 1050 1470 1785 1710 6015
Bubble 525 683 1155 1188 3550
4.1.2 Inventory Adjustments
Item Description
Month 1 Month 2 Month 3 Month 4 Total
Sugar 44 -61 79 77 138
Glucose 33 -46 60 59 107
Flavor 2 -3 4 4 7
Color 1 -1 2 2 3
Wrapper 3 -5 6 6 12
Box Candies 139 -194 236 226 406
Box Bubble 69 -90 152 157 288
Ctn Candy 12 -16 20 19 34
Ctn Bubble 6 -8 13 13 24

4.2 PERIODIC INVENTORY (CONVENTIONAL METHOD)

Open Finished Goods in Service Items. Adjust Quantities on hand directly in Material Accounts.
Material Requisition
Month 1 Month 2 Month 3 Month 4 Total
Sugar 3404 4643 5791 5549 19386
Glucose 2448 3335 4166 3992 13941
Flavor 160 217 272 261 910
Color 53 72 91 87 304
Wrapper 3 -5 6 6 12
Box Candies 349 100 593 568 1609
Box Bubble 12669 17550 21572 20677 72468
Ctn Candy 1062 1454 1805 1729 6049
Ctn Bubble 6 -8 13 13 24

4.3 WORK AROUND (CUSTOMIZED WAY)

Open Finished Goods in Inventory.
Use Work in Process as Parking Account or Clearing Account. Post Manual Entries from There.
Make PTNs From This Account.
Separate Controls and responsibilities.

4.4 REPORTS
5 CUSTOMERS AND SALES PROCESS
Sales Department has finalized the following Price structure as follows
Prices
CTN
1,80
Candies 0
1,20
Bubbles 0

5.1 CUSTOMERS
Following Customers has been introduced.
Customer
Trader A
Trader B

5.2 INVOICES
Sales Department made following invoices against orders received from customers.
Invoices Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total
Trader A 800 1,000 900 1,200 3,900
Trader B 200 400 800 600 2,000
Candies 1,000 1,400 1,700 1,800 5,900
Trader A 300 350 500 400 1,550
Trader B 200 300 600 850 1,950
Bubble 500 650 1,100 1,250 3,500

5.3 RECEIPTS
Customer Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total
Trader A (1,440,000) (2,030,000) (1,829,400) (2,375,000) (7,674,400)
Trader B (480,000) (933,000) (1,797,600) (1,938,600) (5,149,200)

5.4 CREDIT NOTES AND SALES RETURNS

Trader A Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total

Return Candies (27,000) (45,000) (36,000) (63,000) (171,000)
Order Booker Salary (25,000) (25,000) (25,000) (25,000) (100,000)
Incentive (54,000) (66,600) (66,600) (79,200) (266,400)

Trader A Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total

Return Candies (18,000) (30,000) (24,000) (42,000) (114,000)
Order Booker Salary (15,000) (15,000) (15,000) (15,000) (60,000)
Incentive (18,000) (32,400) (64,800) (63,000) (178,200)
6 CASH & BANKING