 In this presentation, we will enter our beginning balances for our jobs and accounts within our practice problem. Let's get into it. We're going to be entering our beginning balances now. For that, let's take a look first at our Excel file to see our objectives. We're going to go over to our Excel file. Within the Excel file, I'm going to bring us on over to the example tab, example zero tab here. We're going to be starting off with our beginning balances. We're going to be in the beginning balances. This job cause sheet over here is going to be a transparent way. It's going to be allowing us to tie out to the amounts on the trial balance. For example, we have, of course, here job 14, 15, and 16, job 16, 15, and 14. At the beginning of the problem, they are all open, although they already have activity in it. Job 14, having direct materials of 14,000, 18,000 for direct labor and factory overhead of 9,000 for a total of the 41,000 here. Job 15, having 18,000 direct materials, direct labor, 16, and overhead of the 8, for a total of the 42,000 and nothing's in job number 16. If we were to add all those open jobs up, we're going to get to that 83,000 of open items within the job. If we go back on over to our accounts on the left-hand side, for the general ledger accounts, notice that the way we're processing this, those jobs have been processed through cost of good sold type of accounts and have rolled into the capital account. They're going to be included, in essence, on the income statement in the capital account, even though they're going to be basically in progress. We want to be able to reconcile that. We'll talk more about that as we go, so that if you needed to make an adjustment from this process to, say, recording the work in process account, you can jump back and forth from this system to that type of system where you might have to basically break out the work in process and so on. In any case, that's what we're going to do here. We want to set up these three jobs and these beginning balances. This will give us a chance to enter that summary type of information. We're going to enter basically in summary with one basically transaction, the direct materials and direct labor on the factory overhead for each of these jobs and see how it basically, this will give us a good overview of how this document will apply out to the jobs, how we can record this information into the jobs, and then we'll take a look at the reports so we can see the effect on the reports of these items. What will the effect be? It's going to go into the financial statements. Now we're going to enter it into the financial statements in the period before our starting period. So we're going to be starting in 2020, January 2020, and therefore we're going to enter these beginning balances as the first day of the prior time period so that we're not going to have all the detail for it, but it'll roll over then into equity in the current time period. So we'll see that and then we'll also see the job costing information. So that's the key. So this is the cutoff of January. So January of 2020 is where we're going to start. We're going to enter these beginning balances prior to that so that anything that's going to affect an equity or a temporary account, income statement accounts will roll into equity. We'll see that and we'll also see the project or job costing information, jobs or projects, as it'll be known in QuickBooks Online because we're going to be using the project's feature. Okay. Let's do this. Let's go on over to QuickBooks. We're going to enter this information with a check type of form. So we're going to go to the new dropdown. I want to enter an expense or a check. Let's make it an expense, same kind of form. So we're going to be under the vendor. We're going to enter an expense type form. Now we can set up the vendors just like miscellaneous for right now so it's going to be a miscellaneous vendor because we're not going to enter the detail. We're entering the kind of a summary information. So I'm going to say save. And then the date, the key on the date is it's got to be 123119, the end of the prior period so that when it goes into the current period, everything will wash out in the temporary accounts. And then I'm just going to say payment of cash is again, I'm not concerned with that so much because we're just entering those beginning balances. Now I'm going to be closing out. We're not going to be using the category detail. We're going to be using the item detail and that's where we're going to be using those items that we have set up in order to populate this information. So we're going to say we're going to set up the items. Now when I go to our practice problem here, we're going to start with job number 14. You'll note that we have the direct materials of the 14,000. We set up items that gave us more detail over here based on the items list, which I don't have in this tab, but that items list that we had gives us more detail. So I'm going to say we're in the direct materials but I'm going to break out into just some of these items items in terms of our list. So we can see an example of the more further breakout that we would have. Then we'll add basically an item for just direct labor and the factory overhead. So let's close this out for now or minimize this and we're going to go into our items. So I'm going to be picking an item now. I'm going to be picking our items and first one I'm going to say is that cement. Let's say it's the cement. I'm going to start typing it in there and it'll start to populate for us. The cement render and I'm going to put that in place. And I'm just going to say for 8,000 and I'm kind of coming up with these somewhat randomly so that we can get to that total that's going to be in the materials in this case of the 14,000. And then I'm going to put this in for the job, which is going to be job number 14, which if I type in there and then click on it, you'll see 14 for that project. This project in here, I don't think of it as job, that's typical terminology you're probably used to if you've been working. So then project of customer one customers, the customer project 14, which is basically job 14. Okay. And then we're going to go and say that we're on the next line now. And this is going to be the drop floor drop ceiling. This is the dropped ceiling, the ceiling fell. So drop, we dropped it. We dropped the ceiling. You wouldn't think you'd have to hold up the ceiling. I don't know what I'm talking about. Okay. So there's 5,000. Then you have the billable and number 14. And there is that number 14. Next one, we're going to be picking up the next one. Next, we have the flooring. So flooring, and we'll pick that up. And that's going to be for 1000. So 1000, it's going to be billable. So we'll check off the old billable item. And that's going to be number 14 as well. So number 14. Now I'm going to do the direct labor. Now notice I didn't, I haven't set up an item for the direct labor yet. So I'm going to go ahead and set up the item, a general item for direct labor and a general item at this point for the factory overhead so that we can enter the beginning balances into them. Just note that when you're thinking about the direct labor, you might think about whether or not you're going to be issuing it. You know, you also have to think of, are you going to be processing the direct labor through the payroll? How are you going to be processing the direct labor or allocating the direct labor into the job costing? But in this example problem, we're going to be setting up an item for the direct labor. So you could be considering basically as contract labor or something like that that we would then be applying out in this fashion. So I'm going to say direct labor. So we're going to say, let's pick that up. I'm going to minimize this. I'm going to make a new item as we go. So I'm going to put this in the item area and I'm going to call it direct labor tab. And it's going to say we need to set up an item. I'm going to call it a non-inventory item, just like we have before. I'm going to be copying the direct labor. I'm going to put that into the category. I'm going to put that into the description. And so that looks good. And put that in the description here. Okay. And so then we have the sales. That's correct. This is the same data input screen we saw before. I'm going to make it that double-sided type of item. And then I'm looking for the expense account. So the expense account is going to be in the cost of goods sold. And I'm just going to put it into that labor account. So we had a cost of goods sold account, I believe, for labor. So here's all the materials. And then we just had that cost of goods sold account for labor. So that's the one we're going to be putting that to. I'm going to say save, not save a new, but save and close. Save and close, please. And then tab, tab, tab. And that'll be for the amount of 18,000. And we're going to say 18,000. And that we're going to say is billable as well. And it's going to go into job number 14, job number 14. So that's the one we're working on right now. And then we have the overhead. And we're going to do a similar process for factory overhead. So again, we could break out factory overhead between multiple kind of components of what will be included in factory overhead. But I'm just going to basically put it into, for the beginning balances, one account, one item for factory overhead. So factory overhead. We're going to set up another item as we go. I'm going to select a tab. I'm going to record it as the inventory item or non-inventory. So it could be double-sided. And then I'm going to say OK. And we're going to be posting that here. And then the description will have, and it's on the sales. We'll put the same for the purchase. And then I'm going to be putting this to the expense accounts of the cost of goods sold. So I'm going to go find that cost of goods sold account for the, in this case, the overhead. It should have, there it is. It's below. It's below the material. So there we have the overhead. And then I'm going to say save and close on that one. And that one should be for the 9,000. So we're going to put that in place for 9,000. 9,000. And then I'm going to make that billable. And we're going to put this in for job 114. 114 or not 114, just 14. And there we have that. So I think we have everything here. So let's see if it adds up. It adds up to the 50,000. That should add up to the, it's not adding up to the 50. It should be 41,000. Okay, hold on a second. Let's get back on over here. I see the problem. This, this has too many zeros right here. That should be 1,000. Let's try that. Let's try that one. And then I'm at 41,000. And if I go back on over, that'll give us our beginning balance of the 41,000 here. So that looks good. So what's going to happen when we, when we record this, it's going to be, it's going to be recording this as an expense. You can imagine it's going to be recording it as a typical kind of expense item, which would decrease the cash account. The other side going into the expenses, but the expenses are driven by the items. The items are what's determining what the expense they're going to go to. And they're going to go to the same kind of line item for the expense, which is going to be the cost of goods sold type of expense accounts. We'll also be able to see this information tracked by the job, which is going to be job number 14. So when we go to the project, project number 14, we'll see that detail as well. And by making them billable, that means that we can pull this information when we invoice the client. We can actually pull this information and use it to help us to populate that invoice. So that's what we have. We're going to go ahead and say, save and close. Let's say save and close. And we have a problem in that we don't have a checking account yet. So I'm going to add a checking account so we can save and close it in our practice problem. And this will give a negative balance in the checking account. We'll deal with that shortly. So I'm going to go ahead and say add new. So we're going to say add new. It's going to be a bank type of account. It's going to be the checking account. And so we'll make that our major checking account. So that's going to be it. I'm going to say save and close. And then let's try this again. Then I'm going to say save and close for the entire expense. And there we have it. Now let's take a look at our reports. So this is going to be typical standard practice when we look at our reports. I'm going to go to the reports down below. And we're going to be opening up our favorite reports, that being the balance sheet and the income statement. So then I'm going to be opening up the balance sheet. So we'll open up the balance sheet here by selecting it under the favorite reports. Then I'm going to basically we're typically going to look at the dates for the end or through 2020. But notice we entered these beginning balances for 2019 before, in essence, the cutoff date. But no matter how you want to look at it, we should have the 41,000 for the checking account. Now decreasing the checking accounts at a negative balance until we enter the beginning balances for the checking account. The other side then rolling into retained earnings. Now if I take this back to 2019, if I say this is 123119, let's say, to 123119. And we run that report, then we could see down below that now it's just basically an income. Because the income is on the income statement, then it's going to roll into equity. And that's what we want to happen. Now I'm going to duplicate this tab so we can have the balance sheet open while I look at another tab. So I'm going to right click on the tab up top, duplicate that tab. That'll put the balance sheet on the right and then we can do stuff on the left. Let's go back on the left so that we can do stuff. Then we're going to go back to the reports on the bottom. We're going to look at the other favorite report, that being the profit and loss report, the income statement, the P and L, different names for the same report. So we're going to be opening up that report, the profit and loss report. And no activity you can see for 2020 because we entered this in 2019. And that's the point that's before the current date that we're going to be dealing with. So let's look at 123119 to 123119. And then we're going to run that report. And if we run that report, we're going to see then the 41,000 here. And you can see that that expense item drove the items to the GL accounts of labor. And then under materials, we had the subcategories under materials of cement, the drop ceiling, the flooring, and then the overhead. And that's all a subcategory of the cost of goods sold. In other words, you can bring this all back down to cost of goods sold with this little drop down. Or I can open up that drop down and I could say, let's just look at the major subcategories, which is labor, materials, and overhead. Or I can break out within those subcategories, which in this case just includes the materials. Notice later on, we could think about more subcategories for labor and whether or not you have the payroll processing through as another issue, of course, with the job costing, or if you're paying like contractors, we could put it into contractor labor here and expense it out just as we have done. And similar treatment for the overhead. Let's right click on this tab up top again and duplicate it. I'm going to right click on the tab up top and duplicate it. So now we've got the balance sheet and then the income statement or P and L. Then we're going to go back to the tab to the left where we can do stuff. Then I'm going to go down to the projects. So if we then go down to the projects on the left side, making sure that you have the hamburger open so that you can go to those projects tab. Then we have our information on project number 14. So project number 14 has now got information in it. We then go into project number 14. We see now that we have our costs of the 41,000. We don't have any income at this point in time. And we've got the material, labor, and the overhead related to components of the cost of goods sold type of costs. And within materials, again, you have the more detailed information. So now it's broken out. You can see how it's going to be broken out. We could track these actually within that project section. We'll talk more about tracking this information in future presentations. But just realize you can run it here. And then you can also run reports within this as well. So we can take a look at the project reports over here as well. So next time we'll do the same kind of process for job number 15. But that's going to be all for now. Let's get out of here.