 In this presentation, we will apply direct labor to jobs. Get ready, because here we go with zero. Here we are in our job costing company dashboard. We're going to go on over to our Excel sheet to see what our objective will be. So we are in the Excel sheet. We are in the tab EX 1.12. If you want to record this, you can go into the second tab 1.12 in the blue area. If we go all the way to the left, we're going to have our information which says that we're going to apply the direct labor paid. So we are imagining that direct labor is being paid, and now we're going to apply that direct labor to the jobs. So we're imagining we can assign this to the jobs because we know the jobs that were worked on. Note that if you're assigning direct labor, you may be doing so with an employee or with a contractor, someone that you pay as a contractor, someone you pay as an employee. If you pay someone as an employee, it can actually be a bit more difficult because then you have to think about how you're going to be processing the wages, how you're going to process payroll, whether or not you're going to, you know, how are you going to assign the costs of the payroll to the job, or you're going to do it through the payroll process and some other method, and all the other areas that are involved in payroll, such as payroll taxes and that type of thing, are they going to be applied to the job as well. If you're doing a contractor, then of course, it'll be a lot easier just to pay the contractor typically and then assign that payment that you make to the jobs. So we're going to actually do it that way. We're going to think about it as a contractor, and we're not going to get into the payroll that we could do through the zero system. Although we will talk about a system where you could be paying people basically payroll and then use a similar format as we did with the last item up here to assign out a fixed amount to the jobs. So we will think about a system that you can use, but if you want to actually run the payroll through zero and then assign that payroll items to jobs, then that would be a different type of process. So you've got to think about how you want to set those up. So the transaction will be once again very straightforward in terms of the general ledger transaction. These three items will add up to 218. We're simply going to debit the cost to goods sold to 218 and credit the cash, meaning we're going to pay someone or some people the contractors, the 218, decreasing the cash for it. Then we need to assign the items that went to cost to goods sold to the proper jobs, the jobs supporting that cost to goods sold account. If we looked at this in the transaction in terms of the general ledger, cash is simply going down, decreased the cash, other side going to cost to goods sold. That 218 then needs to be broken out and supported with the jobs. We're going to apply them to job number 14, 15 and 16. We can apply them out given the fact it's direct labor that we're assigning and being able to track directly to the jobs. And here's the 30,000, the 68,000 and the 120,000 adding up to the 218,000. Let's go over to zero and see how we would do this. We're going to want to basically, of course, record the transaction to hit the GL accounts as well as the job or project accounts at the same time. To do that, we will use forms instead of a journal entry. We're going to say the dropdown here. We're going to say this is a spend money form. Same form we used with the materials but this time we're actually going to spend money. We're not moving it from one materials account to another. If you were processing payroll, we could use the same form here. And if you already ran payroll and then you want to transfer it from and record it to the jobs, you could use a similar form in this fashion as well in a similar process. So we use the same form, either method. So we're going to say the spend money form. And again, we're imagining that we have contractors that we're paying. We're going to be paying the contractors with the spend money form and recording this to the accounts and to the correct jobs or projects. This is going to be coming out of the checking account. The money is actually going to be leaving the checking account as we pay the contractor. And I'm just going to call this contractor one, contractor one creative name that we're going to be paying. And the date that these payments were made as of, let's see what we had in our practice from the 12th. Let's keep with that. See if I can get the date right this time. We'll get the date right this time. I'm going to make this work January 12th, 2020. Then we're going to select the item, which is going to be the direct labor. So we're going to select the direct labor and picking that one up. That'll add it to the description here. And then we're going to pick up the price. If we go back on over to our jobs, the first one's going to be for 30,000 for job number 14. I'm going to put the 30,000 in here, but I'm not going to assign it to the job yet. We'll do that at the end because that's when we go to this little assign button and assign these items to the job. So I'll do that at the last step. Then I'm going to go to direct labor again, direct labor again, and that's the one we want. And this one is going to be for the amount of the 68,000. So we're going to be picking up the 68,000 here. Let's say this will be 6800, 68,000. And then we'll do it again. So we'll do it three items that are the same because we need to apply them to separate jobs. So we're using the same form this time to apply these items to different jobs, which we have not yet seen. So this is a new thing. So it's very interesting and very good to see. So we got the 120,000, 20,000 here, all right? And that's going to be applied out. So now we need to assign these to the job. So I'm going to go to the assigned to job. I'm going to pick first job number 14, job number 14. There it is. There's our customer. And then I'm just going to assign that one to the first one. And then I'm going to say assign. And so now you can see the little 14 that pops up next to it. Then the next one, I want to assign that, but I want to assign it to job number 15. So assign that to number 15. And then I'm going to say assign. And then it puts it, whoops, I had both of them checked off again. Hold on a second. I'm going to uncheck the 68,000 and recheck the 30,000. And I want to put this back to job number 14. Let's try this again. And then assign. Okay. So now I'm going to uncheck it. So now I've got 14, 15 assigned. Now let's check off the last one, which will be, as you may have guessed, job number 16. Job number 16, we're going to pick that one and assign. So now we have 14, 15, and 16. If I say okay, then we see it assigned here. And we could also see it assigned here as well. So we could double check it as we, as we look at our information in the spend money form in that fashion. Now what's going to happen when we record this, it's going to decrease the checking account by that 218,000. It's going to record these items to the expense account as being designated by the items, which is going to be the cost of goods sold account. Also realize that you can, you can imagine us having different cost of goods sold labor accounts, just like we did with the materials. You can have different labor if you would like to break that out in more detail. We'll see that again with the overhead, but we just put them all to labor, the direct labor account here. Now also note, before we record this, and note that it'll also apply to the job, the proper job, which is going to be our project, which will be these three jobs and we're different jobs with the same form, which is nice to be able to do. Now also note that if you did run payroll, let's say you ran payroll, and now instead of these being contractors that you're going to pay instead of this going down, what you really want to do is reassign this to the proper job. If you already ran payroll, then you know that payroll is always, is already going to be posted to something like wages expense. And if you want to then record this to the proper job and not have any effect here, then on this, but add it to the job, then you could do a similar thing we did last time. And I'll just do it right now for an example, but I won't actually record it. And that's going to be that you could say, okay, I'm going to put a negative 120,000 here. I'm going to put the negative 120,000 here. And then you could take this out of whatever the wages account was, if there was a wages account or payroll account. See if we have one right here. You could take it out of there. And this would be for the negative 120, it's not the right number. It should be negative 218,000. And that would bring this back down to zero. It would take it out of the payroll account and then put it in, which is an expense account and then put it into the direct labor. So it wouldn't change if you used this method, you could process payroll without having to assign all the costs to the jobs, which will maybe easier. And then go back in and use this method where you would basically assign the costs to the jobs and you would then process it. The other side go into the payroll. So there'd be no change in basically the net amount for the expense account. It would just be transferred. Part of it would be in cost of goods sold. Part of it would be here. And then you could apply this amount out to the job. I actually think this is probably easier to do than try to go into the payroll and assign all the amounts out to payroll, although it is another step involved. So in any case, I'm not going to do that now. We're going to say that it's going to be a contractor. So I'm going to delete this last line. We are going to be decreasing the actual cash account and recording the other side to the cost of goods sold and applying them to the jobs. Let's go ahead and record it then. I'm going to say save and then we'll check out our reports. So we have green things here, which indicate that everything went smoothly. So that's good, or at least it didn't find any problems. So we're going to go then to the accounting dropdown and open up the old balance sheet report. Let's change the date up top to the 2020. So I'm going to select the date dropdown. We're going to take that out to January 2020 and then update the old report. I'm going to hold down control, scroll up just a bit. So let's go up to that one, two, five, one, two, five. Now in the checking account, the checking account did actually decrease this time. This is money that went out. We're imagining that it went to actual contractors at this point. And then if we scroll down, we're going to see the money spent, there's the 218. So if we were to click on that, it would take us back to our expense form or our money spent form. I won't do it now because we've seen that in the past. I'm going to then go back to the balance sheet. Now let's duplicate the tab. So I'm going to go up to the tab up top, right click on it and duplicate that tab. Then I'm going to go back to the tab to the left and we're going to open up our other favorite report, our other favorite financial statement, that being the income statement, by going to the accounting dropdown and then on down to that income statement, income statement, P&L, profit and loss. There it is. I'm currently in 2020. That's where I want to be. So we're going to then scroll down and we have all of our information and cost of goods sold. All the activity has been in cost of goods sold and it's been grouped into these accounts. Now here's the one that we added, the direct labor. There's the 218. If I was to select the 218 in the direct labor, we're going to see the detail for it and we'll see that money spent form. So here it is. And there's the 120, the 68 and the 30. Notice it's breaking it out for those three items. But if I was to click on any one of them, it should take us to that contractor one expense form. So it's breaking them out since we entered them in three line items on that expense form. But let's actually go in to that expense form and check it out. So here it is. You can see the total is the 218 being broke out between the 30, the 68 and the 120, which we applied to job 14, 15 and 16. Let's go on back. We're going to go back here and then back to the income statement. Remember that you could further group these items by using the edit layout here. So within cost to get sold, we might want to put the subcategories of the materials, the labor and the overhead. And we could do that with the editing. We talked about that a bit in the past, but note you have a lot of flexibility with that. So I just want to mention that as we look at these reports once again. Let's go ahead and duplicate this tab up top again. I'm going to right click on this tab and duplicate to this tab. Then I'm going to go back to the tab to the left. And now let's take a look at our projects. So if we go up to the project tab up top and we go into the all projects. Here we have our projects. We have 14, 15 and 16 on the projects. If I was to go into, let's say project number 16 at this time, going into project number 16, we see our information once again for project number 16. This is going to be all of the information for the open job at this point. Now the other way we can go into this and just note that when you're looking at these items, if I went to this little three dots and I said go to the item, it would go to the form that we made to make the item. If we go to the edit, it'll show the actual data input form that was generated from the item. All right, now let's take a look at our reports. So let's go back up top and go to the accounting. We're going to go down to the reports and look at our project or job reports. Strolling down then, scrolling down. We have the project or job reports. We're going to look at the project detail report, project detail. Now note again, I would keep this date, whatever it is as of today, as if you're running it and then adjust the filters for the dates that you want to filter by. And so I'm going to select the dropdown. We have the in progress or the close. I'm going to select all of them even though everything is in progress at this time. We will then update this report, updating this report. This is what we have for job 14, 15 and 16 thus far. That's going to add up to the 651. If we go back to the Excel sheet, that's going to be the 651 for all jobs that are open at this point in time, which is all the jobs that we are looking at. Now, whenever I go into this report, I would go into the report settings and you may want to save the setting. I would save the setting, which is to turn the dates on, turn the date on and then say update. Cause that's going to show you when you had anything prior to the cutoff date. So then you could sort this information by date if you so choose. And you'll see everything before the cutoff date, everything that happened in 2019. You could see job number 14, obviously crossing the barrier between 2019 and the 2020. You can to sort by the contractor, sort by the project item and so on. If we were to do that, sort by the project item, that'll be an easier way for us to consider that the direct labor items versus the other items, which are going to be things like the material and whatnot. Also note that when you have the materials, if you put something like before the name, such as an M or something like that, then it might help you to sort this information and put all the materials in a similar category for your filtering options. So that's something that you can consider here as well. But anyways, I'm going to go over here and go back to our dates. Now, if you wanted to change the dates then, you can go up top because obviously this isn't going to tie out to our income statement because it's showing all activity, all open jobs, instead of having a restriction of the current period. So if I was to filter this and say, now I want to look at a date filter, I can look at the open jobs, let's filter by date. And then if I just want to look at the 2020 information, I can say, all right, let's just take a look at January 2020 to January 31st. I almost messed it up again, but no, January 31st. And then update that. So when you do that and you look at this report, it's still going to have the date here, the current date, but you're really looking at this range. That's what matters in terms of the date range. And that means all the 2019 stuff is gone. This is the activity for 2020. So job number 14 still has stuff that happened in 2019 that's included in it, but it's not in this report because we cut it off for 2020 only. If we then go down to the bottom line of this thing, we're now at the 568,000, which should match the current income statement. If we go to the income statement, we're at the 568,000. And if we go to the balance sheet in the equity section, there's the 568,000 in the current year earnings. So if we go back to the projects, notice this is really nice to have this kind of filtering option here. And you can also then filter by that to have that and be able to filter by the job, by whether the jobs be in progress or closed, it can be a powerful tool to help you to see what's going on with this information. And again, also make any kind of adjustments that you might need at the end of the year. If you need to convert something to like a completed contract or percentage of completion, then these filtering options could help you to look at those kind of like basically timing differences in order to do so. So that's gonna be it for now. Let's get out of here.