Week 2 Chat session Transcript 3/25/2012 -- (Too long to post as a reply to Week 2 discussion)

Troy: I have read all lessons but I have not memorized very much.

 

George: Well, fearless leader only got through 1 1/2 lessons to my chagrin, but I think I have them under control.

 

Troy: Just when it starts to make sense the tutorial adds another layer of stuff and nocks me back down, but I am learning so it is good.

 

George: Anyone starting late is not going to see the preceding material

George: This chat is not up to snuff for us.

Ok, that brings us to now and we can start talking, without loosing anything

Wes, Troy, are you here?

 

Wes Stack  I'm here.

12:10 PM

Beverly Beu Haas   Hi George and Wes. Sorry to be late. I had sinus surgery this past week and was unable to get to homework. I hope it's okay to listen in, though.

 

June Kinsinger  i am here

 

George: Wes and Troy say they read all, but did not retain too spectacularly

 

June Kinsinger  i agree with others...the exercises were great but referring back and redoing helps grasp the tasks

George: I read less but have a fair handle

 

Wes Stack  I would be anxious to put the concepts into action. Think I'll learn them better that way.

 

Troy Bungart I just need to find time to keep re reading it.

 

June Kinsinger   i found taking each task and looking at it as a single entry helps the most having a sample printed out to refer back to helps keep things straight also

 

Troy Bungart  I know a lot more now than before I started this.

 

June Kinsinger  yes....and the more entries you make and repeating them helps understand the double entry process

 

George:   The material will not make a whole lot of sense until we use it, but we can't really use it until we have accounts in hand.

12:16 PM

Wes Stack  I haven't looked at Wave accounting, but would setting up our accounts using that software make us focus on the "how to"?

 

George:   Let's do that right here. What would be our asset accounts? Please number them

 

Wes Stack   Asset accounts for what business?

George:   Our own or Joe Potter

1. Cash

 

Wes Stack

2. Equipment

 

June Kinsinger

2. pottery wheel

3. chemiclas

opps

 

Wes Stack

4.clay

 

George:

5 Checking Account

6. Paypal Account

 

Wes Stack   I don't use Paypal. How is this account an asset. Do you make a deposit?

 

June Kinsinger   it can hold cash payments on sales and can be used to pay payables

 

Wes Stack   OK

 

Troy Bungart   I use paypal, mine is an asset

 

George:    When people buy my stuff on etsy the money collects there

 

Wes Stack

Learned something already!

 

George:   

7. Accounts receivable

12:24 PM

June Kinsinger

liabilities? accounts payable

 

George:   Not done with assets yet

 

June Kinsinger

ooops

George:   Anyone?

 

Troy Bungart   is stock an asset?

George:    Is it part of the business or separate from the business?

 

Troy Bungart   It is what is going to be sold hopfuly

 

George:    Your Stock is inventory - I have an accountant's input on that.

12:28 PM

 

Troy Bungart   Okay.  right, if I counted materials and finished product the materials would be counted twice.

 

June Kinsinger   inventory would be asset. i was thinking of stock in a company outside of your personal business

12:31 PM

George:    He said leave everything as raw materials until it is going out the door as finished goods. Everything is tracked as cost of goods sold.

 

Troy Bungart   okay

 

George:    Finished pots on the shelf are nothing but clay and glaze.

12:33 PM

George:   The remaining typical asset accounts would be office supplies, Furniture, buildings, land, vehicles

 

George:    OK, we have a list of asset accounts. Some are actually items within accounts. Equipment is an account containing wheel, kiln, pug mill, etc.

Can someone condense and repost the asset accounts?

 

June Kinsinger   i can

 

Wes Stack   Would there be accounts for chemicals, clay, etc. or would they be under one account such as "materials"?

12:38 PM

George:    Good observation - Raw materials would be a good account

 

June Kinsinger    1. checking acct   2. raw materials   3. equipment   4. paypal acct   
5. accounts receivable

 

Troy Bungart

cash, checking, paypal, office supplies, equipment, materials, furniture, buildings, land, vehicles

 

George:    Do any of you in your businesses have any other assets that don't fit well under categories we have named?

12:42 PM

Troy Bungart   I don't think so.

 

Wes Stack

No, but I've never accounted for furniture and land in my accounting. How do those work?

12:45 PM

George:    They don't enter into your profit/loss picture, but they can be used in your balance sheet to show the value of your business in the event you need to get a loan to expand your business.

 

June Kinsinger   our accountant uses a %age calculated by the size of my shop space to the actual size of our property

Wes Stack   Thanks both. Good to know!

 

June Kinsinger  that same percentage is used when calculating taxes as a %age of utilities and such.

12:48 PM

George:    Potters generally find they can't make a successful business just making and selling pots. They often diversify by teaching classes and or offering studio space to other potters.

12:50 PM

George:    Anything else about assets?

 

June Kinsinger   does anyone know what a going rate would be for private lessons?

12:53 PM

Beverly Beu Haas   still here

12:54 PM

George:    A one on one private lesson should relate to your skill as a potter, as a teacher, the quality of the workspace - all highly variable.

 

June Kinsinger   thanks.  Are we continueing next week?

 

George:    Absolutely - I think we could spend another half hour to finish accounts today.

 

Wes Stack  let's do it

George:    I will post the remaining chat session for anyone who has to leave.

 

Troy Bungart  I am still here

 

George:    OK what would be the liability accounts?

 

Wes Stack   Accounts payable

June Kinsinger

insrance

utilities

website

Troy Bungart

show fees

rent

George:    No, those are expenses

 

Troy Bungart   loans

 

George:    except accounts payable

Notes payable

Mortgages payable

 

Wes Stack   Is mortgage a liability or expense?

 

George:    Both?

1:02 PM

George:    The unpaid balance is definitely a liability.  Where would a mortgage payment (for business) be a debit and where a credit?   Let's come back to that one.

 

Now we need to break down the Owners Equity sub classes.

First Revenues

 

Wes Stack   goods sold

 

Troy Bungart  amounts billed or sold for services or products

1:10 PM

OK and services sold - classes, firing space,

Any other Income from the operations of the business?

 

Troy Bungart   you could sell some raw materials if you are buying in bulk

 

George:    Rental income is a possibility.  I know potters who do that

 

Wes Stack  How about value of pieces donated to charities?

 

George:    No revenue out of that.

1:14 PM

Troy Bungart   what about intellectual property, say I sell a book or dvd

publish a book or dvd

1:15 PM

George:    That would be revenue

 

I have an unexpected guest I must visit with, so must cut this short. Can you all complete a list of accounts? June and I will combine them into one we will use for Joes Pottery and then provide you with a list of transactions to correctly account for. I will post this by Wednesday evening.

Just post your lists in your own workspaces

 

Troy Bungart   Thanks George!

 

Wes Stack   Will do. Thanks much.

 

George:    We will continue with the lessons 4-6

 

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