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University of Michigan Flint - ACCT 340 AIS I Case Study.doc...
University_of_Michigan_Flint_-_ACCT_340_AIS_I_Case_Study.docx
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University of Michigan Flint - ACCT 340 AIS I Case...
University_of_Michigan_Flint_-_ACCT_340_AIS_I_Case_Study.docx-CASE STUDY Product SAP ERP GBI
University of Michigan Flint - ACCT...
University_of_Michigan_Flint_-_ACCT_340_AIS_I_Case_Study.docx-CASE STUDY Product SAP ERP GBI
Page 12
CASE STUDY
27
CSI installed and tested the new barcode system. The warehouse
manager approved the installation and commented that she thinks
it works great. GBI wrote a check to CSI for $4,195 and gave it to
the installer.
28
Big Apple’s truck arrived at GBI’s warehouse and picked up the
order from January 27
th
.
Adjustment information as of January 31, not already given in the original
transaction(s):
1.
Based on prior experience, GBI estimates that approximately ½ % of the net credit sales
(gross credit sales minus returns of credit sales) for the month will become bad debt.
GBI writes off bad debts as they occur and recognizes bad debt expense based on
anticipated bad debts as an adjusting entry each month.
2.
As a control measure, physical inventories are taken on a periodic basis alternating
between the raw materials inventory, finished goods inventory and trading goods
inventory. Physical inventory of the trading goods inventory was taken at the end of
January. It was determined that the value of the
trading goods
merchandise on hand
was $40,710.
3.
GBI counted the office supplies on hand after the close of business on the last day of the
month and determined the cost of the unused office supplies to be $620.
4.
Production Machinery, Equipment and Fixtures were placed in service on January 1,
2008, are expected to last 15 years with no salvage value.
The bar-code system has a 5
year life and no salvage value. GBI depreciates fixed assets on a straight-line basis and
those assets acquired in the first half of the month are depreciated for the entire month,
while fixed assets placed in service during the last half of the month are not depreciated
until the second month. Depreciation is rounded to the nearest dollar and assets are
depreciated on a monthly basis (i.e. number of days in the month is not of consequence).
5.
GBI used the Internet to review the monthly charges for utilities the business consumed
during January. Based on the internet report, the amount to be billed by the utilities
company for January usage is $1,046.
6.
Liability insurance for the six month period ending on February 28 in the amount of
$15,000 was paid last August on the first of the month. Liability insurance is assumed to
be utilized uniformly over the six month policy period.
© SAP AG
Page 12
Page 13
CASE STUDY
7.
GBI needs to recognize the wages expense for the month.
Since all employees are paid
salaries and no changes have been made, this amount is the same as the previous
month salaries. (For purposes of this assignment, ignore manufacturing and assume all
labor costs will be expensed.)
STOP HERE!
End of AIS Project Part II
Following are the instructions for entering the accounting data into the SAP system:
Your instructor will tell you the SAP server (instance) and the client you will be using. Your login is
AIS
-
XXX
(where the
XXX
is your assigned SAP student login ID number – this number will be
supplied to you by your instructor). Your initial password is “
123456”.
You will be asked to change
the password when you first log on.
Change it and be sure to remember this new password.
That will
be the password you will use on your subsequent logons for SAP assignments.
Your
company code is US
XX
(where the
XX
is your assigned number).
Do not use any company
code other than the one assigned to you.
The first thing that you should do is to examine the chart of accounts.
You will find that the SAP
system chart of accounts has more general ledger accounts than those listed above. For simplicity, we
have limited the number of accounts used in this assignment. This does not mean that you need to use
all the accounts above, but that they are potentially the accounts you will use for this assignment. In
addition, normally Accounts Receivable (A/R), Accounts Payable (A/P), Fixed Assets and Inventory
accounts should not be posted to via journal entries in the general ledger. These accounts are linked to
subsidiary accounts which are posted via other functions within the order-to-cash, production, and
procure-to-pay business processes. For instance, a sale will be processed in the order-to-cash process
and when the sale is billed on account, it will process directly through the customer’s account in the
A/R sub-ledger (subsidiary account).
The GBI configuration of SAP does not allow users to post directly to the general ledger for A/R,
A/P, Fixed Assets and Inventory. Instead the system passes the subsidiary ledger data on to the
general ledger automatically. By disallowing direct posts, the system maintains the integrity of these
accounts; that is, the total of the subsidiary accounts will always match the totals of the accounts in
the general ledger. For purposes of this assignment, we have created accounts that will allow you to
post directly to A/R, A/P, Fixed Assets and Inventory. They are noted by a suffix in the description,
“(Direct Post)” or “(Direct Posting Account)”.
Even though any of the accounts in the system chart of accounts could be used by the GBI accounting
system, limit yourself to the accounts listed in the chart of accounts on pages 5 and 6 of this
assignment document.
© SAP AG
Page 13
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