We are now ready to buy our Lemonade Stand supplies. Most kids just go to the local grocery store and pay full price for their supplies. However, we can save money by seeking out wholesale supplies and buying each item in bulk. We will buy our Cups from Cups Galore. They will sell us a box with 1000 cups for $10 or one penny per cup. To enter this expense in our accounting system, click on the Check Register in your Chart of Accounts. Then open it. For Number, write the number on the check of the date of the transaction. For Description, write Cups Galore. For the Transfer type, click on the arrow and select Expenses, Supplies, Cups. For withdrawal, type 10.00. Then press Enter.
Then click Save. Then click Close.
We now have only $190 in Assets all of which is in our Checking Account. But we still have $200 in Equity because the $10 we spent on cups is counted as an Asset. It is our inventory of cups.
We will next buy a box of 50 lemons from a company called Lots of Lemons for $20 and record this transaction in our check register.
Last, we will buy 10 five pound bags of sugar from a company called Big Bags of Sugar for $5 per bag or a total of $50. Because we have gotten a “resellers license” when we registered our business, there is no sales tax on any of these transactions because sales tax is only on retail sales. Here is what our Check Register now looks like:
Here is what our Chart of Accounts now looks like:
Here is what the Expenses: Supply Accounts now look like:
Your cups are only 10 cents each. Your lemons are only 40 cents each and the sugar for an entire jar of lemonade is less than 50 cents. By keeping your costs low, you can sell lemonade for a low price and still make a big profit.
You are now ready to start mixing your lemonade and selling to customers. At the end of each day, add up all of the sales you made and deposit them in your real business bank account. Also record the deposit in your GnuCash Check Register. Each deposit will increase your Assets and increase your Equity.
There is much more than GnuCash can do for you as your business gets bigger and your supplies start giving you credit terms. But for now, we will move on to some tips on how to make your website look a lot better.