Chapter 09:

New Company Setup

and Beginning

Balances

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

New Company Setup and

Beginning Balances, p. 279

Chapter 9 begins Part 2 of the book—Peachtree Complete Accounting 2012 for Service Businesses. In this part of the book, you are the owner of an accounting practice that does the monthly record keeping for several service businesses.

In Chapter 9, you set up two service businesses—Mark Foltz Designer and the end-of chapter exercise, Design by Your Name. You set up a business using one of PCA’s sample companies. Then, you record October 1, 2012 beginning balances from Mr. Foltz’s balance sheet.

The chapters in Part 2 work together--the service businesses set up in Chapter 9 are continued in Chapters 10 and 11.

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Peachtree Tips

In Chapter 9, beginning balances are entered from the October 1, 2012 balance sheet (text page 303). This means that the chart of accounts beginning balances must be entered for the previous month—September 1 through 30, 2012. See Entering Chart of Accounts Beginning Balances text pages 302 through 308. Review steps 2, 3, and 4 on pages 304-305.

The businesses that you set up in Chapter 9 are continued in Chapters 10 and 11.

Remember to use a unique name for the businesses that you set up in Chapter 9. For example, use your first and last name Designer to identify the chapter company and Design your first and last name to identify the business set up in Exercise 9-1.

When a company is set up in Peachtree, a shortened named is assigned to the company; for example, the shortened company name for Mark Foltz Designer is marfolde. The Windows 7 default location for Mark Foltz Designer is C:\Sage\Peachtree\Company\marfolde. If the student’s first and last name is used, the shortened company name differs. Windows Vista and XP default locations differ. Refer to File Management, pages xviii-xix.

Use Windows Explorer to see the file size, text pages 310-311.

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Peachtree Tips (concluded)

You can restore to an existing company—one that is previously set

up—or restore a new company, bypassing the process of creating a

new company. The Restore Wizard includes two options on the Select

Company window: An Existing Company and A New Company. If A

New Company is selected, then the company will be named the same

as the backup file selected.

Let’s say you want to restore a backup file for a company that is not

set up in Peachtree; for example, a back up file exists but the

company is not shown as a Peachtree company.

If you start Peachtree and the appropriate company cannot be

opened, use the Restore Wizard to select A New Company. Using the

appropriate backup file, and the selection for A New Company, you

can start where you left off the last time Peachtree was used.

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Backing Up Chapter 9

Peachtree Backup (.ptb)

Excel (.xlsx) and Adobe (.pdf) Kilobytes Page Nos.

Chapter 9 Chart of Accounts.ptb 920 KB 296-298

Chapter 9 Beginning Balances.ptb 958 KB 311-312

Chapter 9_Chart of Accounts Beginning Balances.xlsx 17 KB 312-314

Chapter 9_Balance Sheet.pdf 8 KB 314-315

Chapter 9_Chart of Accounts.pdf 39 KB 315

Exercise 9-1.ptb 912 KB 320-322

Exercise 9-2.ptb 916 KB 324

Exercise 9-2_Chart of Accounts and Beginning Balances.xlsx 18 KB 324

Chapter 9-2_Chart of Accounts.pdf 38 KB 324

Exercise 9-2_Balance Sheet.pdf 8 KB 324

In the textbook, detailed steps are shown for backing up to a USB drive. The chart on pages

277-278 shows the size of the backup files, Excel files, and PDF files.

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Business Status Navigation Center, p. 287

Navigation Bar

Period 10 -

10/01/12-

10/31/12

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Shortened name for Mark Foltz Designer

(Read me box, p. 287)

A folder is set up on the hard drive

for Mark Foltz Designer—

C:\Sage\Peachtree\Company\

marfolde. (If you are using Vista or

XP, refer to Company Data Files

location, text page xix.)

Peachtree’s shortened name is the

first three letters from the first word

(mar), the second word’s first three

letters (fol), the third word’s first two

letters (de).

If you used your first and last name,

the shortened name will differ.

9-7

Entering Chart of Accounts

Beginning Balances, pages 302-308

Follow steps 1-3 on pp. 303 and 304 to select the beginning balance period. (The Select Period window is shown below step 3 on p. 304).

Make sure you have selected From 9/1/12 through 9/30/12. You cannot change the period later. Then, click on <OK>.

Make sure that From

9/1/12 through

9/30/12 is selected.

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Chart of Accounts Beginning

Balances window, pp. 305-307

Make sure that your beginning balances are as of September 30, 2012. If you enter your balances for the wrong month (period), your financial statements will not show the current month and year-to-date amounts correctly in Chapter 11.

Complete steps 7 and 8, pp. 306-307.

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Display the September 30, 2012

Balance Sheet, pp. 307-308 Follow steps 1-3 on page 307 to change the date displayed on the balance

sheet. The <Standard> Balance Sheet Options window is shown on page 307.

September 30 ending balances are October 1, 2012 beginning balances.

Display the balance sheet for September 30 so you can check that you entered

chart of accounts beginning balances correctly.

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Glossary of Terms

Chapter 9

9-11

Posting, p. 275

Part 2 opener One of the best features of a computerized accounting

system is how quickly posting is done. Once entries are

recorded and checked for accuracy, posting is a click of the

mouse. All entries are posted to accounts in the general

ledger and account balances are calculated—fast, easy,

and accurate. The diagram illustrates this process.

Journalize and Post

General LedgerFinancial

Statements

9-12

Balance Sheet, p. 302

A Balance Sheet lists the types and amounts of

assets, liabilities, and equity as of a specific

date. The balance sheet is also called a

statement of financial position.

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Statement of Financial

Position, p. 302

A balance sheet is also called a statement of

financial position.

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Going to the Net, pp. 315-316

Access information about the chart of accounts at

http://en.wikipedia.org/wiki/Chart_of_accounts.

Read the information on Wikipedia’s chart of

accounts website.

1. What is the chart of accounts?

2. List four asset accounts, two liability accounts,

two equity accounts, one revenue account, and

three expense accounts.

3. What is the trial balance?

9-15

Analysis Questions, p. 325 1. What chart of accounts beginning balance date is used for

entering October 1, 2012 account balances in Peachtree?

Beginning balances must be set for the preceding month;

for example, September 1 through 30, 2012. The

September 30 ending balance is the October 1 beginning

balance.

September 1 through 30, 2012 is selected because

Peachtree posts on the last day of the month (September

30). When 9/1/12 through 9/30/12 is selected as the chart of

accounts beginning balance period, task windows start on

October 1, 2012, and reports are dated October 31, 2012.

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Analysis Questions, p. 325

2. How does the account beginning balance date affect the

current month and year-to-date amounts on the financial

statements?

In order for the financial statements to show the correct

current month and year-to-date amounts, beginning

balances must be set for the previous month. In Chapter 9

that means chart of accounts beginning balances are set for

September 30, 2012.

NOTE: In Chapters 10 and 11, students complete

transactions for October, November, and December 2012.

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Assessment Rubric, p. 325

Task Date Selections Window

Shortened

Company

Name

October 1,

2012

Beginning

Balances

September 30,

2012

From the menu bar, File;

New Company, or from

Peachtree's startup window,

Create a New Company.

Create a New

Company, click Next to

make selections to

complete setting up a

new company.

Eight characters:

first three letters

from the first word,

first three letters of

the second word,

two letters from third

word.

Eight characters for

a Peachtree

shortened name; for

example, for Mark

Foltz Designer:

marfolde.

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Online Learning Center Go online to www.mhhe.com/yacht2012 for additional resources.

Link to Student Edition, select Chapter 9.

o Interactive Testing: Online multiple-choice and true and false

questions. Tests are graded and can be emailed to instructor.

o Glossary of Terms: Boldfaced/italicized words within chapter.

o Feature Quizzes: Includes user interface questions, matching,

and review of chapter concepts with immediate feedback.

o Flash Videos: Demonstration of setting up a new company.

o PowerPoints: Narrated slides.

o Assessment Rubrics: Reviews journal entries, reports,

navigation centers, modules, and task windows.

o Going to the Net: Internet research.

o QA Templates: End-of-chapter summary and review questions

and analysis question.

9-19