1.6 Computer Practice: Set Up a New Company

Problem 1-1

To set-up a new company for a service business, follow these steps:

  1. Click – Create a new company ( or On File - Click – New company)

  2. Click – Next >

  3. Fill in Company Information:

    1. Company Name: Your Name, M.D.

    2. Address Line 1: 3200 E. Cheyenne Avenue

    3. City, State, Zip: North Las Vegas, NV 89030

    4. Business Type: Sole Proprietorship (Very Important)

    5. Federal Employer ID: 88-6000000

    6. State Employer ID: 081689.00

    7. State Unemployment ID: 110219.52

  4. Click – Next

  5. Mark the last choice– Build your own chart of accounts (Designed for accounts and advanced users only) This is very important.

  6. Click – Next

  7. On Accounting Method - Select – Accrual (Most companies choose this)

  8. Click – Next

  9. On Posting Method - Select – Real Time (Most companies choose this)

  10. Click – Next

  11. Choose an accounting period structure - Select – 12 month accounting periods (Most companies choose this)

  12. Click – Next

  13. Choose the first period of your fiscal year - Choose - January (Use prior year.) - Click – Next

    Note: Prior year is suggested for this Practice Set to be able to experience the actual closing process. Sage 50 defaults at today’s current date thus will not close a future period.

  14. You are ready to create your company – Click – Finish.

  15. Sage 50 is creating data files. Sage 50 Setup Guide - Click X (close).

  16. Note: Every now and then Sage 50 will prompt you of some features of their website services that they offer for a fee. Please ignore and close the pop-up screen.)

Problem 1-2

Set up the Chart of Accounts for YOUR NAME, M.D. from the Chart of Accounts illustrated in Chapter 1.

PT Prompt: Start Here!

Since you chose to build your own chart of accounts, we recommend that you set up your chart of accounts first. Some of these accounts are needed to set up customers, vendors, inventory, and employees.

  1. On Maintain - Click - Chart of Accounts...

  2. On Account ID: Enter 1001 - OK (This represents the account number assigned to Cash for the first account you are setting up.)

  3. On Description – Type in the Account Name (Ex. Cash)

  4. Account Type - (Set at Cash) - Down-drop arrow; select the Peachtree Type below to classify your accounts properly.

  5. Click - Save & New to continue (or save and close to end)

  6. Continue entering all the accounts below in the chart of accounts provided. Be careful in classifying the accounts properly because every new account created is defaulting at “Cash” as the type of account. Understand how Sage 50 classifies them differently from Generally Accepted Accounting Principles (GAAP). (This is a good topic of discussion with the faculty and students.)

  7. Click Reports and select Chart of Accounts to view your finished chart. Be sure that the account description and account type for each account match the chart of accounts as provided in this chapter.

Your Name, M.D.
Chart of Accounts
As of Dec. 31, (yr)
Account ID Account Description Active? Account Type
1001 Cash Yes Cash
1005 Petty Cash Yes Cash
1010 Accounts Receivable Yes Accounts Receivable
1015 Medical Supplies Yes Other Current Assets
1020 Office Supplies Yes Other Current Assets
1025 Prepaid Insurance Yes Other Current Assets
1030 Medical Equipment Yes Fixed Assets
1030.5 Accumulated Depreciation, M.E. Yes Accumulated Depreciation
1035 Office Equipment Yes Fixed Assets
1035.5 Accumulated Depreciation, O.E. Yes Accumulated Depreciation
1040 Furniture & Fixture Yes Fixed Assets
1040.5 Accumulated Depreciation, Furn Yes Accumulated Depreciation
2001 Accounts Payable Yes Accounts Payable
2005 Wages Payable Yes Other Current Liabilities
2010 Unearned Revenue Yes Other Current Liabilities
2015 Interest Payable Yes Other Current Liabilities
2020 Notes Payable Yes Long Term Liabilities
3001 Your Name, Capital Yes Equity-Doesn't Close
3002 Your Name, Draw Yes Equity-Gets Closed
3005 Retained Earnings Yes Equity-Retained Earnings
4001 Professional Fees Yes Income
4005 Interest Income Yes Income
5010 Bank Service Charge Expense Yes Expenses
5015 Depreciation Expense, M.E. Yes Expenses
5016 Depreciation Expense, O.E. Yes Expenses
5017 Depreciation Expense, Furn Yes Expenses
5025 Insurance Expense Yes Expenses
5030 Interest Expense Yes Expenses
5035 Licenses & Permits Expense Yes Expenses
5040 Postage & Delivery Expense Yes Expenses
5045 Rent Expense Yes Expenses
5050 Repairs Expense Yes Expenses
5055 Supplies Expense—Medical Yes Expenses
5060 Supplies Expense—Office Yes Expenses
5065 Telephone Expense Yes Expenses
5070 Utilities Expense Yes Expenses
5075 Wages Expense Yes Expenses

Problem 1-3

Print a copy of your Chart of Accounts.

  1. On Reports & Forms - Click - General Ledger …

  2. Double click - Chart of Accounts – Click – Options

  3. As of Date –Click – down drop arrow – Period 12, (12/31/yr) – OK

  4. Print - OK - Print. Look at the Chart of Accounts you just printed. Be sure the Account Description and Account Type match the Chart of Accounts as provided in this chapter.

For online students: (You do not need to print the reports.) Click – PDF – Click - OK – On File – Save as – Chapter 1 to your Documents for submission to the online class.

Problem 1-4

Back up your files on Chapter 1. These are the backup procedures that you will need to follow for every chapter:

  1. On File - Click - Back Up...

  2. Check box – Include company name in the backup file name

  3. Click - Back Up

  4. Save Backup for YOUR NAME, M.D. as: Save in (Click the down-drop arrow and look for your drive) Save in: Down-drop arrow - Click - USB Drive on E, F, or G or your CSN student account.

  5. File name: YOUR NAME, M.D.- Chapter 1.ptb

  6. Click - Save

  7. The company backup will require approximately 1 diskette – Click - OK. Please insert the first disk. Press OK to when ready or Cancel to abort – Click – OK. Make sure backup is 100% complete.

  8. Your file has been saved and stored on a disk.

Note: Problem 1-4 is your reference back-up procedures. You will need to change the “Chapter number” that you are in, as you back-up the succeeding chapters.

Online Students: Assignment 1 Submission:

Chart of Accounts as of Dec. 31, (yr) – (Period 12) pdf file only

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