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price. We™re ready to save and post this invoice.
The Invoice Total should display $2.97 (after adding sales tax).

10 Post this invoice.

11 Click the Close button to complete the task.




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Cost of Goods Sold
When you post a sale, Peachtree Accounting records the cost of goods sold
and posts the normal sales distribution (in an accrual-based company). The
program tracks the cost of all stock-type inventory items purchased, based on
the costing method you chose for the item. Now, at the time of sale, the
product cost times the quantity sold is credited to the inventory account and
debited to the cost of goods sold account. (The program uses the accounts you
specified when setting up the inventory item, through the Maintain menu.)

Inventory Adjustments
Sometimes it is necessary to adjust the amount of inventory items. This might
be due to faulty records, pilferage, spoilage, or inventory change. Use the
Inventory Adjustments Journal to make such entries.
In this example, we did a monthly inventory count at the warehouse. It
appears that one of our gardening handbooks is missing. We need to reduce
our inventory to adjust for this loss.
1 From the Tasks menu, select Inventory Adjustments.




Enter or select BOOK-11010 in the Item ID field and press e. The cursor
2
moves to the Reference field.

Press e to skip the Reference field (you could put anything here”the
3
employee code for the person responsible, the date of a physical inventory,
and so on.).

Press e to accept the displayed date.
4

5 Move to the Adjust Quantity By field.
The Quantity On-Hand field displays 2.00.



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Lesson VII”Inventory
Maintaining Item Prices


6 Type -1 in the Adjust Quantity By field to decrease the current inventory
level by one, and press e. The New Quantity field shows that you now
have 1 book.

7 Type Item missing as the Reason to Adjust.

8 Post this adjustment, and then close the window.

When you make an adjustment, the G/L Cost of Goods Sold account, G/L
Inventory account, total inventory value, and quantity on hand are all
updated. For more information on types of adjustments and how they affect
your item cost refer to the “Inventory” chapter of the User™s Guide.

Maintaining Item Prices
Next we™re going to change the prices of some inventory items. One way to
change prices is through the Maintain Inventory Items window. Follow the
steps below to change the price of Violet Seeds from $1.39 per packet to $1.49
per packet.
1 From the Maintain menu, select Inventory Items.

Type SEFL-31180 in the Item ID field, and press e.
2
Peachtree displays the inventory information for Violet Seeds.
3 Select the Sales Price arrow button.




4 Enter 1.49 in the Sales Price #1 field, and then select OK.

5 Select the Save button to record the change, and then click the Close
button to close the window.

You can also change prices from the Maintain Item Prices window. This
method is more convenient if you are changing prices on a range of inventory
items, or all inventory items. We™re going to mark up all of our seeds by 10%,
so the following method will be faster.




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1 From the Maintain menu, select Item Prices. The Maintain Item Prices - Filter
Selection window appears.
To mark up the seeds by 10%, we are going to filter by item ID. Notice
the Item ID category in the Filter column.




2 Click your mouse pointer in the Type column next to Item ID. Select Range
from the drop-down list.

Press e to move to the next column, and then type SE.
3
The item IDs for seeds all begin with the letters SE. Since the Item ID
lookup list is currently arranged in alphabetical order, it will be easy for
us to set a range for the seeds.
Press e to accept the first item ID for seeds, SEFL-31100 (Carnation
4
Seeds Mix).




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Lesson VII”Inventory
Maintaining Item Prices


5 Click the lookup button in the To column. Scroll down the list and double-
click SEVG-33270 (Watermelon Seeds), and then select OK.




6 In the “Mark up or down selected items by” field, select Percent.

Press e to move to the next field where you can enter the percent by
7
which you want to mark up the items. Type 10 and press e again.
Since we want to mark up all price levels of all seeds based on the current
price, we can keep the default settings. For more information about the
options on this window, refer to the Inventory chapter of the User™s
Guide.

8 Click the Recalculate (Recalc) button to calculate the new item prices.
Scroll through the list to see that the prices for all seeds have been
marked up 10%.
9 Click the Save button to adjust the item prices.




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Review of Lesson VII
Let™s review some of the things we learned in this lesson:
• For Stock Type inventory items, Peachtree Accounting tracks costs,
quantities, descriptions, sales prices, minimum levels and reorder
quantity. For non-stock, labor items and service items, the program
tracks descriptions and sales prices. For description-only items, the
program only tracks the description.
• When you purchase inventory stock-type items, you credit accounts
payable and debit the inventory account.
• When you sell inventory stock-type items, two sets of disbursements
take place:
• Debit accounts receivable, credit revenue
• Debit cost of goods sold, credit inventory
• When you access a lookup list field, you can display detailed
information or even edit the record by selecting the Edit button.
• Adjustments are used to correct levels of stock inventory. When you
make an adjustment, the cost of goods sold G/L account, inventory
G/L account, total inventory value, and quantity on hand are all
updated.
• There are two ways to change the prices of inventory items. You can
change prices on an individual level through the Maintain Inventory
Items window. To change prices for a range of inventory items, or all
inventory items, it is faster to use the Maintain Item Prices window.
Now that you have been introduced to the Inventory module of Peachtree
Accounting, you are ready to proceed to Lesson VIII”Job Costing.




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Lesson VIII”Job Costing
Beginning the Lesson


Lesson VIII”Job Costing

Tu This lesson teaches you how to implement and use Peachtree Accounting™s
job costing system.

You will learn how to:
• Set up a job
• Use phases and cost codes
• Use job costing with purchases
• Use job costing with payroll
• Use job costing with sales
• Use job costing reports
Estimated Lesson Time: 30 Minutes

Beginning the Lesson
If you are continuing from Lesson VII, skip this section and proceed with the
lesson.
If you are just starting the lesson, do the following:
1 Start Peachtree Accounting and open up the sample company, Bellwether
Garden Supply.

2 If the Action Items window appears, close it for right now.

3 From the Options menu, select Global. Peachtree displays the Maintain
Global Options window.
You need to make sure that the tutorial global options are set up
properly.
4 In the Accounting tab, do the following:
Select Manual Decimal Entry and 2 as the number of decimal places.

• Clear the Hide General Ledger Accounts option for all modules
(Accounts Receivable, Accounts Payable, and Payroll).
• Select the “Warn if inventory item is out of stock” option.
• Select the “Recalculate cash balance automatically in Receipts and
Payments” option.




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5 In the General tab, do the following:
• Make sure the Line Item Entry Display option is set to two lines.
• Select both Smart Data Entry options by putting check marks in the
“Automatic field completion” and “Drop-down list displays
automatically” check boxes.
You could possibly have other global options selected as well. However,
the above options are the only ones that directly affect this tutorial.
6 When finished, select OK to close the Maintain Global Options window.


Job Costs
Job costs are any costs associated with the completion of a job or project.
These may include costs associated with purchasing materials, or paying for
labor, equipment, or subcontractors. Peachtree Accounting lets you assign
job ID codes to identify jobs which can be applied to purchasing, payroll, and
sales transactions. This way, you can track how the expenses and revenues
impact costs for a specific job and analyze job profitability.
Sales
Labor
Purchases




Peachtree Accounting helps you track job costing with easy options that can
be used at a simple or detailed level. Before setting up a job, you have to
determine how you want to use job costing.
Peachtree Accounting offers the following options to track job costing:
Jobs only: If you want to track simple jobs where you don™t intend to

use stages or specific kinds of costs.

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