Software of the Month Club 1995 March

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CHAPTER 1: INTRODUCTION =============================================================================== Account II is an easy-to-use integrated personal finance and tax program that handles your everyday financial needs. It balances your checkbook and credit card accounts, calculates interest on savings accounts and loans, and maintains other financial data such as your paycheck information. Account II also completely integrates your financial data with most of the federal tax forms. Each financial transaction can be tagged with a tax code and in just seconds is automatically totaled on the proper line of the correct tax form. The real power of Account II comes from its ability to easily, yet accurately, project your finances many years into the future, allowing you to investigate what-if scenarios to determine your best after tax investment strategy. By using Account II throughout the year, you can keep track of your tax situation helping you to identify tax saving opportunities and allowing you to make adjustments before the end of the tax year. Some of the financial questions Account II can answer: * What is your after tax net worth at the end of this year, at the end of next year, or in five years? * Are you having too much or too little taxes withheld from your paycheck? * Should you rent or buy a house? * Should you refinance your home loan? * Should you pay off a mortgage or loan early? * Should you put your money in a taxable or nontaxable investment? * Will you experience a future cash flow problem? * Can you afford to buy a new car or other major purchase? * Do you have enough savings to fund your retirement? * If you are self employed, Account II will calculate your quarterly estimated tax. You do not need to be an accountant to use Account II. That's because Account II works just like your checkbook register. If you can balance your checkbook, you already know how to use Account II. HARDWARE REQUIREMENTS Account II is designed to operate on IBM and compatible computers with 640K of RAM, DOS 3.3 or higher and a hard drive with 1MB free disk space. CHAPTER 1: INTRODUCTION 2 HOW TO USE ACCOUNT II The beginner should first go through the Tutorial to get a hands-on introduction to the major functions and capabilities of Account II. Refer to chapter 2 on how to create a Tutorial copy. Then go to Chapter 3 for a step-by-step guide through the Tutorial. To begin using Account II for your personal finances, refer to Chapter 2 to make your personal copy of Account II tailored to your specific tax requirements. Then refer to Chapter 5 to help set up your accounts. Chapter 2 also explains how to make backups of your copy of Account II. Backups should be made regularly to ensure that you do not lose your account data, if your disk become damaged or otherwise unreadable. Refer to chapter 4 for a complete technical description of all Account II functions. Chapter 6 gives a line-by-line explanation for each tax form included in Account II. REGISTRATION INFORMATION To order the latest version of Account II including a fully documented user manual, complete the following form and send along with $15.00 (check or money order only) to: DUTYCAT SOFTWARE 1890 W. Hillcrest Dr. #465 Newbury Park, Ca. 91320-2355 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - | 1 | ACCOUNT II ORDER FORM | | Please send me the latest version of Account II. | | Name __________________________________________________ | | | Address _______________________________________________ | | | City ______________________ State ____ Zip Code _____ | | __ __ | |__| 5.25" disk (1.2 Mbyte) |__| 3.5" disk (1.4 Mbyte) | - - - - - - - - - - - - - - - - - - - - - - - - - - - - - WHO NEEDS TO REGISTER You are required to register if you continue to use this software after an initial 30 day evaluation period. WHY YOU SHOULD REGISTER 1. You will receive the latest version of Account II including a comprehensive user manual. 2. You will receive technical support. 3. You will receive notification of updated versions of Account II. 4. It's the right thing to do. LIMITED WARRANTY THIS SOFTWARE, INSTRUCTION MANUAL, AND REFERENCE MATERIALS ARE SOLD "AS IS" WITHOUT WARRANTY AS TO THEIR PERFORMANCE OR FITNESS FOR ANY PARTICULAR PURPOSE. THE ENTIRE RISK AS TO THE RESULTS AND PERFORMANCE OF THIS PROGRAM IS ASSUMED BY THE BUYER. CHAPTER 2: USING THE UTILITY PROGRAM =============================================================================== GETTING STARTED The following three steps will get you up and running with Account II. STEP 1 - CREATE AND RUN THE ACCOUNT II TUTORIAL The Tutorial takes approximately one hour to complete. It is recommended that you complete the Tutorial in one session. If you have already gone through the Tutorial or are otherwise familiar with Account II, you can skip this step. 1. Start the Utility program by typing "C:\ACC93B\UTIL" and press Enter. Note: If you installed Account II on a drive other than drive C:, replace C: with the appropriate letter. 2. Type T to select 'make a Tutorial copy'. 3. Select the destination drive where you want the tutorial copy located, usually the same drive selected above. Note: If you get the alert 'Limit of 5 copies in a directory', you have reached the maximum allowable number of copies on the destination drive. You must either select a different destination drive or delete an existing copy on the destination drive. Refer to 'Delete an existing copy' below. Note: If you get the alert 'Duplicate copy name', a Tutorial already exist on the destination drive. You must first either select a different destination drive or delete the existing Tutorial copy. Refer to 'Delete an existing copy' below. After a few seconds of disk activity, you exit the utility program. 4. Go to Chapter 3 and follow the Tutorial. STEP 2 - PRINT THE SECOND PART OF THE ACCOUNT II MANUAL 1. At the DOS prompt, type "C:\ACC93B\COPY MANUAL.2 PRN". This prints chapters 4, 5, 6 and 7. STEP 3 - CREATE YOUR PERSONAL COPY OF ACCOUNT II 1. Start the Utility program by typing "C:\ACC93B\UTIL" and press Enter. Note: If you installed Account II on a drive other than drive C:, replace C: with the appropriate letter. 2. Type N to select 'make a New copy'. 3. Select the destination drive where you want the new copy located, usually the same drive selected above. CHAPTER 2: USING THE UTILITY PROGRAM 2 Note: If you get the alert 'Limit of 5 copies in a directory', you have reached the maximum allowable number of copies on the destination drive. You must either select a different destination drive or delete an existing copy on the destination drive. Refer to 'Delete an existing copy' below. 4. Enter the name of your new copy. The name can contain up to 10 characters. Note: If you get the alert 'Duplicate copy name', a copy with this name already exist on the destination drive. You must first either select a different destination drive or copy name, or delete the existing copy with this name. Refer to 'Delete an existing copy' below. 5. Select the tax forms that you want to include in this copy of Account II. Selected tax forms have a preceding the tax form title. To select a tax form, highlight the desired tax form with the arrow keys and press Enter. Alternatively you can, type the three letter tax form code (e.g. FZ1). If the tax form is reselected, the disappears and the form is not included. If you are in doubt whether to include a tax form, it is usually better to include the form. If at a later date you determine that you don't need the form, you can remove the tax from by using the CONVERT option described below. 6. Once the desired tax forms are selected, press <Alt-C> to continue processing. After a few seconds of disk activity, you exit the utility program. 7. To start Account II, type "C:\ACC93B\ACC" and press Enter. Select the copy you created by typing the copy name at the prompt and press Enter. You can also scroll through the copy names by pressing the up or down arrows. 8. The next time you want to run Account II, repeat step 7. OTHER UTILITY PROGRAM OPTIONS It is assumed that you installed Account II on drive C. If this is not the case, replace the C: in the following steps with the appropriate drive letter. Back up an existing copy Use this option to make a duplicate of an existing copy. You should make frequent backups of your copies of Account II in the event that your disk becomes damaged or otherwise unreadable. The backup copy is an exact duplicate of the original except for the copy name and date. 1. Start the Utility program by typing "C:\ACC93B\UTIL" and press Enter. Note: If you installed Account II on a drive other than drive C:, replace C: with the appropriate letter. 2. Type B to select 'Backup an existing copy'. CHAPTER 2: USING THE UTILITY PROGRAM 3 3. Select the source drive where the existing copy is located. Note: If you get the alert 'No copies in this directory.', no copies of Account II were found on the source drive. Note: You can only backup a copy in directory ACC93B. Use the CONVERT option described below if the copy is in a previous version of Account II. 4. Highlight the copy you desire to backup using the up or down arrow keys and press Enter. If only one copy is shown, simply press enter. 5. Select the destination drive where you want the backup copy located. Note: If you get the alert 'Limit of 5 copies in a directory', you have reached the maximum allowable number of copies on the destination drive. You must either select a different destination drive or delete an existing copy on the destination drive. Refer to 'Delete an existing copy' below. 6. Enter the name of the backup copy. The name can contain up to 10 characters. Note: If you get the alert 'Duplicate copy name', a copy with this name already exist on the destination drive. You must first either select a different destination drive or copy name, or delete the existing copy with this name. Refer to 'Delete an existing copy' below. Convert an existing copy Use this option to make a duplicate copy of an existing User disk, but with a different set of tax forms or to convert previous versions of Account II. 1. Start the Utility program by typing "C:\ACC93B\UTIL" and press Enter. Note: If you installed Account II on a drive other than drive C:, replace C: with the appropriate letter. 2. Type C to select 'Convert an existing copy'. 3. Select the source drive where the existing copy is located. Note: If you get the alert 'No copies in this directory.', no copies of Account II were found on the source drive. 4. Highlight the source directory where the existing copy is located using the up or down arrow keys and press Enter. If only one directory is shown, simply press Enter. Note: If you get the alert 'No copies in this directory.', no copies of Account II were found on the source directory. 5. Highlight the copy you desire to backup using the up and down arrow key and press Enter. If only one copy is shown, simply press Enter. CHAPTER 2: USING THE UTILITY PROGRAM 4 6. Select the destination drive where you want the converted copy located. Note: If you get the alert 'Limit of 5 copies in a directory', you have reached the maximum allowable number of copies on the destination drive. You must either select a different destination drive or delete an existing copy on the destination drive. Refer to 'Delete an existing copy' below. 7. Enter the name of your new copy. The name can contain up to 10 characters. You can have up to 5 copies of Account II on a given disk. Note: If you get the alert 'Duplicate copy name', a copy with this name already exist on the destination drive. You must first either select a different destination drive or copy name, or delete the existing copy with this name. Refer to 'Delete an existing copy' below. 8. Select the tax forms that you want to include in this copy of Account II. Selected tax forms have a preceding the tax form title. To select a tax form, highlight the desired tax form with the arrow keys and press Enter. Alternatively you can, type the three letter tax form code (e.g. FZ1). If the tax form code is reselected, the disappears and the form is not included. 9. After the desired tax forms are selected, press <Alt-C> to continue processing. After a few seconds of disk activity, you exit the utility program. Delete an existing copy Use this option to remove obsolete copies to free up disk space or to make room for additional copies of Account II on a given drive. 1. Start the Utility program by typing "C:\ACC93B\UTIL" and press Enter. Note: If you installed Account II a on drive other than drive C:, replace C: with the appropriate letter. 2. Type D to select 'Delete an existing copy'. 3. Select the source drive where the copy to be deleted is located. Note: If you get the alert 'No copies in this directory.', no copies of Account II were found on the source drive. 4. Highlight the copy you desire to delete using the up and down arrow keys and press Enter. If only one copy is shown, simply press enter. 5. Answer the cue 'Do you really want to do this' with Y. Once the copy is removed, you cannot get it back. CHAPTER 3: TUTORIAL ============================================================================== To follow this tutorial section, first create a Tutorial copy as described in Chapter 2. The Tutorial takes approximately one hour to complete. It is recommended that you complete the Tutorial in one session. GETTING STARTED To start the Account II tutorial, type C:\ACC93B\ACC and press Enter. If you installed the Tutorial on a drive other then C, replace C: with the correct letter. After a few seconds of disk activity, you are prompted to select a copy name. Highlight TUTORIAL using the up or down arrow keys and press Enter. If TUTORIAL is the only copy listed, just press Enter. Note: If TUTORIAL does not appear or you get the alert "No copies in this directory", verify you selected the correct drive and directory above. Otherwise return to chapter 2 step 2 and create a TUTORIAL copy. MAIN MENU You are now at the main menu. ACCOUNT II - VERSION 93B MAIN MENU -Setup-------------- -Portfolios---------------- --Quit--------------------- |open new Account || PORTFOLIO A | -status------------------- |Block remove || ||Copy name 'TUTORIAL ' | |portFolio parameters|| ||Accounts 0 | |open new Portfolio || ||Lines free 135378 | |change pRinter || ||Printer LPT1 | |change today's Date || ||Today's date 10/25/93 | -------------------- --------------------------- -------------------------- =Accounts========< >=============================================== | | | | | | | | | | | | | | ============================================================================= -Taxforms-------------------------------------------------------------------- | FZ1-FORM 1040 | | FA1-SCH A ITEMIZED DED. | | FB1-SCH B INTEREST INC. | | | | | ----------------------------------------------------------------------------- The main menu is divided into 6 windows. Setup - A collection of miscellaneous functions used to open a new account, open a new portfolio, etc. CHAPTER 3: TUTORIAL 2 Portfolios - A spreadsheet display combining the information in the Accounts and Tax Forms to compute your after tax net worth. Quit - Although it doesn't look like a window, select quit to exit Account II. Status - Displays various system parameters. Accounts - All of your financial data, such as checking account, credit card account, savings account, house mortgage, payroll, etc. are inserted into the accounts. You can open up to 255 accounts. Tax forms - Displays any of the tax forms (i.e., Form 1040, Schedule A, etc.). Information inserted in the accounts is used to complete the tax forms. MOVING AROUND IN THE MAIN MENU Upon entering the MAIN MENU, the 'Accounts' window is active. The active window has a double line and bold border. Pressing the Tab key cycles the active window throughout 5 of the 6 windows (the 'status' window is for display only and cannot be active). Hold down Shift and press Tab to cycle in the opposite direction. You can also move directly from one window to another by holding down the 'Alt' (Alternate) key and pressing the first letter of the desired window name (e.g., Alt-S to activate the 'Setup' window). CHANGING TODAY'S DATE Today's date is displayed in the 'status' box at the upper right corner of the MAIN MENU. For purposes of this tutorial, you should change this date to January 1st. =Setup============== |open new Account | |Block remove | 1. Activate the 'Setup' window. |portFolio parameters| |open new Portfolio | |change pRinter | |change today's Date | ==================== =Setup============== |open new Account | |Block remove | 2. Highlight 'change today's Date' using the up or down |portFolio paramenter| arrow keys. |open new Portfolio | |change pRinter | |change today's Date | ==================== CHAPTER 3: TUTORIAL 3 -status------------------ |Copy name 'TUTORIAL' | |Accounts 0 | 3. Press Enter. 'Today's date' in the 'status' s |Lines free | window is highlighted. |Printer LPT1 | |Today's date 10/25/93 | ------------------------- -status------------------ |Copy name 'TUTORIAL' | |Accounts 0 | 4. Change today's date by typing 1 - Enter, |Lines free | 1 - Enter, 93 - Enter. |Printer LPT1 | |Today's date 1/ 1/93 | ------------------------- If you enter a wrong number, the Esc (escape) key in the upper left corner of the keyboard aborts the entry sequence.Throughout this tutorial, if you find yourself in an unfamiliar situation, simply press the Esc key until the MAIN MENU is again displayed. OPENING THE CHECKING ACCOUNT The following example demonstrates how to open and balance a checkbook using Account II. =Open acc.= |Generic | |Checking | |Expense | |Payroll | |Savings | |Ira | 1. Activate the 'Setup' window and select 'open new Account'. A |Loan to you| new window displays the different accounts that can be opened. |loan Fr you| |Mortgage | |cRedit card| |Utility | |sTock | |Asset | =========== =Checking account================ |interest Rate............. .000| |interest Method....... Simple | 2. Select 'Checking'. The 'Checking |First interest date...... 1/ 1/93| account' dialog box appears. |Interval.............Monthly | |freQuency..................... 1| |Last interest date....... 1/ 1/93| |**********OPEN ACCOUNT***********| ================================= The Checking account dialog box asks you to insert information to automatically calculate earned interest. Assume that you earn 3% simple interest calculated on the last day of the month. CHAPTER 3: TUTORIAL 4 3. Select 'interest Rate' and enter 3.000. =Checking account================ |interest Rate............. 3.000| |interest Method....... Simple | 4. Complete the rest of the dialog box |First interest date...... 1/31/93| as shown. |Interval.............Monthly | |freQuency..................... 1| |Last interest date.......12/31/93| |**********OPEN ACCOUNT***********| ================================= The 'First interest date', 'Interval', 'freQuency' and 'Last interest date' work together. The 'First interest date' and 'Last interest date' specify the first date to calculate interest and the last date to calculate interest respectively. The 'Interval' and 'Multiple' specify how often to calculate interest, in this case every month. If, for example, you want to calculate interest every other month, set 'freQuency' to 2. 5. Select 'OPEN ACCOUNT' at the bottom of the dialog box. ===================== 6. Finally, name the account CHECKING. | Enter account name. | | <CHECKING > | ===================== ACCOUNT DISPLAY You have now entered the account display. ----------------------------------------------------------------------------- |CHECKING Lines 12 Date 1/ 1/93 Rate 3.000% Set .00 Balance| |Ln# Date Ck# Description Transfer Tax I C Amount .00| | 1 1/31/93 EARNED INTEREST BINT S .00 .00| | 2 2/28/93 EARNED INTEREST BINT S .00 .00| | 3 3/31/93 EARNED INTEREST BINT S .00 .00| | 4 4/30/93 EARNED INTEREST BINT S .00 .00| | 5 5/31/93 EARNED INTEREST BINT S .00 .00| | 6 6/30/93 EARNED INTEREST BINT S .00 .00| | 7 7/31/93 EARNED INTEREST BINT S .00 .00| | 8 8/31/93 EARNED INTEREST BINT S .00 .00| | 9 9/30/93 EARNED INTEREST BINT S .00 .00| | 10 10/31/93 EARNED INTEREST BINT S .00 .00| | 11 11/30/93 EARNED INTEREST BINT S .00 .00| | 12 12/31/93 EARNED INTEREST BINT S .00 .00| | | | | | | | | |< > | | | | INSERT LINE <T> RENAME TITLE <D> DATE PAGE <V> RECONCILE | |<R> REMOVE LINE <J> INTEREST RATE PRINT <Z> DELETE ACCOUNT | |<E> EDIT LINE <Y> SET BALANCE <X> BLOCK REMOVE <O> TRIAL LINE ORDER| |<C> COPY LINE INITIAL BALANCE | ----------------------------------------------------------------------------- CHAPTER 3: TUTORIAL 5 The name of the account, today's date and interest Rate can be found on the top line. The second line contains a list of column labels similar to that found in a checkbook register. Next are the projected interest calculations listed in chronological order. Notice each line is identical except the date column. The date column is incremented by one month for each line. Account II knows how many days in each month, including leap years. Since the balance is zero, the earned interest is also zero. As you insert lines into the account, you will see the earned interest automatically calculated. At the bottom of the display are the options available in the Account. Note: If the account display looks different, you made an error completing the Checking account dialog box. Delete the account by pressing 'Z' and return to step 1 of OPENING THE CHECKING ACCOUNT. INSERTING LINES Suppose you deposit $1000.00 into your checking account. Notice the first option listed at the bottom of the Account display is INSERT LINE. 1. Press the I key. --------------------------------------------------------------------- |INS Date Ck# Description Transfer Tax I C Amount| | 1/ 1/93 .00| --------------------------------------------------------------------- The options at the bottom of the Account display are replaced with the trial line. Under the Date column is today's date and a '.00' is in the Amount column. You can move about the trial line columns by pressing the Tab or Shift-tab keys. 2. Press the Tab key until the Description column is highlighted. Type Deposit and press the Enter key. --------------------------------------------------------------------- |INS Date Ck# Description Transfer Tax I C Amount| | 1/ 1/93 DEPOSIT .00| --------------------------------------------------------------------- 3. Tab to the 'Amount' column and enter 1000. --------------------------------------------------------------------- |INS Date Ck# Description Transfer Tax I C Amount| | 1/ 1/93 DEPOSIT 1000 | --------------------------------------------------------------------- 4. Insert the sign of the amount. Since this is a deposit, the + sign should be selected. You can also press the Enter key without selecting '+'. The plus sign is accepted as the default. CHAPTER 3: TUTORIAL 6 --------------------------------------------------------------------- |INS Date Ck# Description Transfer Tax I C Amount| | 1/ 1/93 DEPOSIT 1000 | | <+> '+' '-'| --------------------------------------------------------------------- After entering the amount, the trial line should look as follows: --------------------------------------------------------------------- |INS Date Ck# Description Transfer Tax I C Amount| | 1/ 1/93 DEPOSIT 1000.00| | | |<S> SINGLE <R> REPETITIVE PRINT CHECK < > | --------------------------------------------------------------------- 5. To insert the trial line into the account, press S for SINGLE entry. The trial line is inserted in the top of the account and the other lines are moved down. LINE ORDERING Insert the following two lines. Ensure each date is entered correctly and the amount is negative. --------------------------------------------------------------------- |INS Date Ck# Description Transfer Tax I C Amount| | 1/ 3/93 101 SOFTWARE STORE -50.00| | | |<S> SINGLE | --------------------------------------------------------------------- --------------------------------------------------------------------- |INS Date Ck# Description Transfer Tax I C Amount| | 1/ 2/93 102 FOOD STORE -25.00| | | |<S> SINGLE | --------------------------------------------------------------------- The top of the account should now look like this: ----------------------------------------------------------------------------- |CHECKING Lines 15 Date 1/ 1/93 Rate 3.000% Set .00 Balance| |Ln# Date Ck# Description Transfer Tax I C Amount .00| | 1 1/ 1/93 DEPOSIT 1000.00 1000.00| | 2 1/ 2/93 102 FOOD STORE -25.00 975.00| | 3 1/ 3/93 101 SOFTWARE STORE -50.00 925.00| ----------------------------------------------------------------------------- Notice that check 102 is placed before check 101, although the lines were inserted in the reverse order. All lines are automatically arranged by increasing date. CHAPTER 3: TUTORIAL 7 EDITING LINES You can also edit existing lines. The following example demonstrates the <E> EDIT LINE option. 1. Notice the last line inserted into the account is highlighted. You can move the highlighted line by pressing the up or down arrow keys. Highlight check number 102 (should be line 2). 2. Press <E> EDIT. Line 2 is copied into the trial line. 3. Change the date to January 4th. 4. When the trial line has been modified as shown below, select <S> SINGLE. --------------------------------------------------------------------- |EDIT Date Ck# Description Transfer Tax I C Amount| | 2 1/ 4/93 102 FOOD STORE -25.00| | | |<S> SINGLE | --------------------------------------------------------------------- The lines are again rearranged by increasing date. RECONCILING YOUR CHECKING BALANCE Account II provides a simple yet accurate method to balance your checking account to the penny. Suppose you receive your monthly checking account statement from the bank. The deposit and check 102 have cleared the bank, but check 101 has not. The 'C' (Cleared) column is used to label which transactions have cleared. 1. Select <V> RECONCILE. The following appears at the bottom of the display. ================================================================= | The beginning balance on your statement should be ' .00'. | | Press enter to reconcile this account. < > | ================================================================= 2. Since this is the first statement, the beginning balance should be zero. Press the Enter key to continue. 3. You are next prompted to insert a check number. Since the deposit has no check number, accept the default by pressing the Enter key. ----------------------------------------------------------------------------- |RECONCILE Ck# Amount | | | | | | ' ' - BLANK Running balance .00| | '?' - QUERY | ----------------------------------------------------------------------------- CHAPTER 3: TUTORIAL 8 4. Enter the amount of the deposit. --------------------------------------------------------------------- |RECONCILE Ck# Amount| | 1000 | | <+> '+' '-'| --------------------------------------------------------------------- The account is searched for the first line that matches the selected check and amount (should be line 1). This line is then copied into the trial line. 5. Accept this match by pressing <A>. --------------------------------------------------------------------- |RECONCILE Ck# Amount| | 1 1/ 1/93 DEPOSIT 1000.00| | | |<A> ACCEPT <N> NEXT <A> | --------------------------------------------------------------------- Line 1 now has an 'X' in the 'C' column. This indicates that the transaction has cleared the bank. 6. Repeat steps 3 through 5 for check number 102 (should be line 3). Don't forget to enter a negative 25 for the amount. Notice check number 102 has a '/' in the 'C' column instead of an 'X'. This indicates there are one or more transactions above this line that have not cleared. 7. To exit reconcile, press Esc. ============================================================== | The ending balance on your statement should be ' 975.00'. | | Press any key to continue. < > | ============================================================== This amount should agree with the ending balance of your bank statement. 8. Press any key to return to the Account display. INTEREST CALCULATIONS The 'S' in the 'I' (Interest) column of the EARNED INTEREST line, together with the Rate on the top line of the account display, tells Account II to automatically calculate the monthly interest earnings at an annual rate of 3%. The BINT in the Tax column of the EARNED INTEREST line indicates that this amount is reported as taxable interest. You will see how these amounts are totaled on Schedule B. CHAPTER 3: TUTORIAL 9 SAVING THE ACCOUNT Press the ESC key. The account is saved on the disk and you return to the MAIN MENU. Notice that CHECKING is listed in the 'Accounts' window. TAX FORMS 1. Escape to the MAIN MENU, if not already there, and activate the 'Setup' window. 2. Select 'portFolio parameters'. ==================== |staRt date 3/31/93| 3. Verify Portfolio parameters appear as follows. |Interval Monthly | If not, make the appropriate modifications. |freQuency 3 | |stoP date 12/31/93| |Tax year 93 | ==================== 4. Escape back to the 'Setup' window. 5. Activate the 'Tax forms' window. Note: Only Form 1040 and Schedules A and B are included in the Tutorial. The forms you can include in your personal copy of Account II are listed in chapter 6. 6. Select FB1-SCH B INTEREST INC. After a few seconds of disk activity, observe the following tax form. ----------------------------------------------------------------------------- |FB1-SCH B INTEREST INC. DATE 7/11/94 TAX YEAR 93 < > | | =========================================================================== | |PART I - INTEREST INCOME | | 1 Interest income from seller-financed mortgages.......[BIMT]| 1 | .00| | Other interest income................................[BINT]| 1 | 25.50| | 2 Add the amounts on line 1..................................| 2 | 25.50| | 3 Enter the excludable savings bond interest...........[BSBI]| 3 | .00| | 4 Subtract line 3 from 2. Enter on Form 1040, line 8A...(FZ1)| 4 | 25.50| |-----------------------------------------------------------------------------| |PART II - DIVIDEND INCOME | | 5 Dividend income......................................[BDIV]| 5 | .00| | Capital gain distributions.[BCGD]| 5 | .00| | Nontaxable distributions.[BDNT]| 5 | .00| | 6 Add the amounts on line 5..................................| 6 | .00| | 7 Capital gain distributions. Enter on | | Schedule D...................(FD1/FZ1)[BCGD]| 7 | .00|///| | | 8 Nontaxable distributions..............[BDNT]| 8 | .00|///| | | 9 Add the amounts on line 7 and 8............................| 9 | .00| |10 Subtract line 9 from 6. Enter on Form 1040, line 9....(FZ1)|10 | .00| | =========================================================================== | ----------------------------------------------------------------------------- Notice the 4 letter category [BINT] again appears on line 1. Also note that line 1 contains the total of all lines with BINT in the Tax column. CHAPTER 3: TUTORIAL 10 Line 4 is transferred to FORM 1040 line 8a. Escape back to the MAIN MENU and select FZ1-FORM 1040. Line 8a is the amount from Schedule B, line 4. PAYROLL ACCOUNT The next task is to insert your payroll data into an account. In fact all of your payroll information (e.g., gross income, taxes withheld, other deductions etc.) will be entered for an entire year as it appears on the pay stub you receive each week. A powerful Account II feature is the ability to project your finances as many years into the future as you wish. 1. Escape to the MAIN MENU, activate the 'Setup' window and select 'open new Account'. 2. Select 'Payroll'. 3. Select 'Take home pay transfer account'. You can select this line directly by pressing the T key. As you will see, Account II can transfer amounts from one account to another. 4. Select 'Select existing account'. A list of existing accounts appears at the bottom of the screen. 5. Highlight CHECKING and press Enter. =Payroll account=========================== |Your or spouse payroll..............Your | |ytd gRoss income................. .00| |ytd 401k plaN.................... .00| |ytd fEderal income tax withheld.. .00| |ytd sociAl security withheld..... .00| |ytd state incoMe tax withheld.... .00| |ytd cHaritable contributions..... .00| 6. Complete the rest of the |Gross income..................... 700.00| 'Payroll account' dialog |401 K plan....................... .00| box as shown. |401 k Plan transfer account.... | |feDeral income tax withheld...... 80.00| |sOcial security withheld......... 50.00| |State income tax withheld........ 25.00| |Charitable contribution.......... 10.00| |Take home pay transfer account.CHECKING | |First pay date..................... 1/ 7/93| |Interval.......................Weekly | |freQuency............................... 1| |Last pay date......................12/31/93| |***************OPEN ACCOUNT****************| =========================================== 7. Select 'OPEN ACCOUNT' at the bottom of the dialog box. 8. Name the account 'PAYROLL'. CHAPTER 3: TUTORIAL 11 You again enter the account display but with a different account name. ----------------------------------------------------------------------------- |PAYROLL Lines 312 Date 1/ 7/93 Rate .000% Set .00 Balance| |Ln# Date Ck# Description Transfer Tax I C Amount .00| | 1 1/ 7/93 10 TAXABLE INCOME ZWAG 700.00 700.00| | 2 1/ 7/93 40 FED TAX WITHHELD ZFTW -80.00 620.00| | 3 1/ 7/93 50 SOCIAL SECURITY -50.00 570.00| | 4 1/ 7/93 60 STATE TAX WITHHE ASTW -25.00 545.00| | 5 1/ 7/93 70 CHARITABLE CONTR ACAS -10.00 535.00| | 6 1/ 7/93 ? TAKE HOME PAY CHECKING B -535.00 .00| | 7 1/14/93 10 TAXABLE INCOME ZWAG 700.00 700.00| | 8 1/14/93 40 FED TAX WITHHELD ZFTW -80.00 620.00| | 9 1/14/93 50 SOCIAL SECURITY -50.00 570.00| | 10 1/14/93 60 STATE TAX WITHHE ASTW -25.00 545.00| | 11 1/14/93 70 CHARITABLE CONTR ACAS -10.00 535.00| | 12 1/14/93 ? TAKE HOME PAY CHECKING B -535.00 .00| | 13 1/21/93 10 TAXABLE INCOME ZWAG 700.00 700.00| | 14 1/21/93 40 FED TAX WITHHELD ZFTW -80.00 620.00| | 15 1/21/93 50 SOCIAL SECURITY -50.00 570.00| ----------------------------------------------------------------------------- Notice that 6 lines are automatically inserted into the PAYROLL account each week based on your entries in the dialog box. Note: If the PAYROLL account looks different, you did not complete the Payroll account dialog box correctly. Press 'Z' to delete the account and answer 'Y' to the cues, then return to step 1. MOVING AROUND IN THE ACCOUNT Besides using the up and down arrow keys, there are 6 other ways to move around in the account. 'Page down' key - displays the next 15 lines of the account. 'Page up' key - displays the previous 15 lines of the account. 'Home' key - highlights the first line of the account. 'End' key - highlights the last line of the account. 'Ctrl-Home' key - moves the highlight to the top of the screen. 'Ctrl-End' key - moves the highlight to the bottom of the screen. TAX FORMS The TAXABLE INCOME line of the PAYROLL account has the tax category ZWAG that tells Account II to total all amounts with this tax category on line 7 WAGES, SALARIES, TIPS, ETC. of FORM 1040. 1. Escape to the MAIN MENU and activate the 'Tax forms' window. CHAPTER 3: TUTORIAL 12 2. Select FZ1-FORM 1040. Form 1040 is redisplayed. Line 7 contains the total of the lines with ZWAG in the Tax column. TAX CATEGORY DISPLAY While Form 1040 is displayed, type ZWAG and press Enter. The tax form is replaced with the Tax Category display. This display is similar to the Account display. It is a compilation of all lines containing the selected tax category. CHANGING FILING STATUS AND EXEMPTIONS Escape back to tax form 1040. If you look at the top of the form, you see a '<Z1> 1'. This signifies the FILING STATUS of Single. 1. Type Z1 and press the Enter key. 2. Response to the cue with 2. ---------------------------------------------------------------------- |FZ1-1040 DATE 1/ 1/93 TAX YEAR 93 <Z1 > < 2>| ---------------------------------------------------------------------- After a few more seconds of disk activity, the filing status is set to MARRIED FILING JOINT RETURN. Now claim your spouse as an exemption by changing <Z7> on line 6B to X. Also increase your number of dependents from 0 to 2 by selecting <Z2> on line 6C. Notice that the total number of exemptions on line 6E is automatically updated. MOVING AROUND IN THE TAX FORM Moving around in the tax form is similar to moving around in the account. Use the up or down arrow keys to scroll the tax form. 'Page up' and 'Page down' scrolls the tax form a screen at a time. 'Home' displays the top of the form and 'End' displays the bottom of the form. Move up or down until you see line 34. This is your standard deduction based on your filing status. Line 36 is automatically calculated based on the number of exemptions claimed. Line 37 is your total taxable income. By referring to the 1993 tax table under the married filing joint return column for this taxable income, you will arrive at the tax shown on line 38. Also notice the marginal tax rate is calculated and displayed on line 38. Move down to the bottom of Form 1040. Line 54 is the federal income tax withheld which was labeled with ZFTW in the PAYROLL account. Line 61 is the amount overpaid or line 64 is the amount of tax you owe. CHAPTER 3: TUTORIAL 13 INSERTING REPETITIVE LINES There are hundreds of different tax categories. To help you locate the correct category, you can display the appropriate tax form as you are completing the trial line in the account. If you know which line of which tax form the amount should go, you can find the correct tax category. Assume that in addition to federal and state taxes withheld, you also have local taxes withheld from your paycheck. Local taxes withheld are reported on line 5 of Schedule A. 1. Escape to the MAIN MENU and reenter the PAYROLL account. 2. Select INSERT LINE. 3. Tab over to the Tax column. Notice the tax forms listed at the bottom of the display. 4. Select FA1-SCH A ITEMIZED DED. Schedule A replaces the account display. However, all the totals are blank. ASTW is the tax category for STATE AND LOCAL INCOME TAXES on line 5. 5. Type ASTW and press Enter. The account and trial line are redisplayed with ASTW in the Tax column. 6. Complete the trial line as shown below, except this time end trial line modifications by selecting <R> REPETITIVE instead of <S> SINGLE. --------------------------------------------------------------------- |INS Date Ck# Description Transfer Tax I C Amount| | 1/ 7/93 65 LOCAL TAX WITHHELD ASTW -15.00| | | |<R> REPETITIVE | --------------------------------------------------------------------- 7. You are next prompted to select an interval. Select Weekly. --------------------------------------------------------------------- |INS Date Ck# Description Transfer Tax I C Amount| | 1/ 7/93 65 LOCAL TA =Interval=== ASTW -15.00| | |Daily | | |<R> REPETITIVE |Weekly | | |INTERVAL |Semi-monthly| | | |Monthly | | | |Annually | | | ============ | --------------------------------------------------------------------- 8. Now select the frequency. Since you receive a pay check every week, enter 1. If you get a pay check every other week, a '2' would be selected. --------------------------------------------------------------------- |<S> SINGLE <R> REPETITIVE <R> | |INTERVAL Weekly | |FREQUENCY 1 | --------------------------------------------------------------------- CHAPTER 3: TUTORIAL 14 9. A default stop date appears. However, you should insert 12/31/93. --------------------------------------------------------------------- |<S> SINGLE <R> REPETITIVE <R> | |INTERVAL Weekly | |FREQUENCY 1 | |STOP DATE 12/31/93 | --------------------------------------------------------------------- The LOCAL TAX WITHHELD is inserted into the account each week. Notice the new line is inserted between check numbers 60 and 70 since the check number of the LOCAL TAX WITHHELD is 65. If two or more lines have the same date, the lines are ordered by increasing check number. SET BALANCE You might have noticed that the amount column of the TAKE HOME PAY LINE in the PAYROLL account automatically updated after you inserted the LOCAL TAX WITHHELD line. This is due to the B in the 'I' column. Normally the 'I' column is used to automatically calculate interest, but here it adjusts the amount to set the balance to zero. TRANSFER COLUMN Also notice that CHECKING appears in the Transfer column of the TAKE HOME PAY line, transferring all your take home pay to the CHECKING account. Escape to the MAIN MENU and reenter the CHECKING account. Notice the TAKE HOME PAY lines are repeated in the CHECKING account. Also notice PAYROLL appears in the Transfer column and the Amount is positive. EXPENSE ACCOUNT Just as you projected your income, you can also project your expenses throughout the year. 1. Escape to the MAIN MENU, activate the 'Setup' window and select 'open new Account'. 2. Select 'Expense'. =Expense account================ |projected Expenses.... 100.00| |Transfer account....CHECKING | 3. Complete the 'Expense account' dialog |First expense date...... 1/ 7/93| box as shown. |Interval............Weekly | |freQuency.................... 1| |Last expense date.......12/31/93| |**********OPEN ACCOUNT**********| ================================ 4. Select 'OPEN ACCOUNT' at the bottom of the dialog box. CHAPTER 3: TUTORIAL 15 5. Name the account 'MISC EXPENSE'. The first line of the MISC EXPENSE account lists your projected expenses for the first week of the year. This line is repeated every week throughout the year. The PROJECTED EXPENSES lines are also transferred to the CHECKING account. Now assume it is a week later. You can simulate this by escaping to the MAIN MENU, activate the 'Setup' window and change today's date to 1/7/93. Notice the '?' next to MISC EXPENSE in the Accounts window. Reenter the MISC EXPENSE account. The first PROJECTED EXPENSES line has a '?' in the check column. This causes the '?' to appear next to MISC EXPENSE in the MAIN MENU when today's date equals the date of this line. In this way you are alerted at the MAIN MENU that one or more lines in the account needs attention (i.e., you need to pay a bill). REMOVING LINES Each week you should remove the PROJECTED EXPENSES line and replace it with your actual expenses. 1. Highlight the PROJECTED EXPENSES line dated 1/7/93 (should be line 1) and press <R> REMOVE LINE. Line 1 is copied into the trial line. When removing a line, no modifications of the trial line may be made. 2. Select <S> SINGLE and answer Y to also remove this line in the CHECKING account. Line 1 is removed from the account. You can project other expenses such as groceries, gasoline, house repairs, etc. A separate account should be opened for each expense. UTILITY ACCOUNT Just as you projected miscellaneous expenses, you can also project periodic expenses such as rent, telephone, electric, etc. 1. Escape to the MAIN MENU, activate the 'Setup' window and select 'open new Account'. 2. Select 'Utility'. =Utility account=========================== |payment Amount................... 1000.00| |paY to the order of......XYZ APARTMENTS | 3. Complete the Utility account |aCcount payment withdrawn from.CHECKING | dialog box. |First payment date................. 1/31/93| |Interval.......................Monthly | |freQuency............................... 1| |Last payment date..................12/31/93| |***************OPEN ACCOUNT****************| =========================================== 4. Select 'OPEN ACCOUNT' at the bottom of the dialog box. CHAPTER 3: TUTORIAL 16 5. Name the account 'RENT'. Your projected rent is inserted into the account for each month. You can project other utilities such as electric, telephone, water, etc. A separate account should be opened for each utility. PORTFOLIOS The PORTFOLIO display combines information inserted in the Accounts and the results of the tax forms to give a "bottom line" measure of your after tax net worth. 1. Escape to the MAIN MENU and activate the 'Portfolios' window. 2. Select PORTFOLIO A. 3. Because the CHECKING account is new, you are asked if you want to modify this line. Press N. ----------------------------------------------------------------------------- |PORTFOLIO A Date 1/ 7/93 3/31/93 6/30/93 9/30/93 12/31/93| |CHECKING 3083.09 5579.82 8516.20 11052.02| |MISC EXPENSE | |PAYROLL .00 .00 .00 .00| |RENT | | | | | | | | | | TAX .00 .00 .00 1014.00| | | | TOTAL 3083.09 5579.82 8516.20 12066.02| | | | ======================================= | ||'CHECKING ' is a new account. Do you| | || want to make any changes? (Y/N) < > | | | ======================================= | ----------------------------------------------------------------------------- 4. Press N again for the PAYROLL account. The left column of the PORTFOLIO display is the list of accounts opened so far. Across the top are four dates beginning with the 'staRt date' and incremented according to the 'Interval' and 'freQuency' selected in the 'portFolio parameters' window. The tutorial is set up so that these dates are the end of each quarter. The date columns list the balance of each account for the corresponding date. On the bottom line of the display is the total of each column. The amount on the TAX line under the date 12/31/93 equals the tax overpaid on line 61 of Form 1040. CHAPTER 3: TUTORIAL 17 WHAT IF SCENARIOS Suppose you consider buying a house but need to know how this will affect your after tax net worth. The following example demonstrates the increase or decrease in net worth you can expect when the money previously spent for rent is applied to a house mortgage, considering the added tax advantages of home mortgage interest deductions and the appreciation of your house value. 1. Escape to the MAIN MENU, activate the 'Setup' window and select 'open new Account'. 2. Select 'Mortgage'. =Mortgage account========================== |interest Rate....................... 10.000| |loan Date.......................... 1/ 1/93| |loan Amount......................100 000.00| |Payment amount................... 1200.00| 3. Complete the 'Mortgage |paY to the order of......1ST SAVINGS & LOAN| account' dialog box. |accOunt payment withdrawn from.CHECKING | |Escrow amount.................... .00| |accoUnt escrow transferred to.. | |firSt interest date................ 1/15/93| |First payment date................. 1/31/93| |Interval.......................Monthly | |freQuency............................... 1| |Last payment date..................12/31/93| |***************OPEN ACCOUNT****************| =========================================== 4. Select 'OPEN ACCOUNT' at the bottom of the dialog box. 5. Name the account 'MORTGAGE'. The 'C' in the 'I' column of the INTEREST line calculates interest compounded daily as opposed to the 'S' simple interest calculated in the CHECKING account. AIHM is the tax category for deductible house mortgage interest on Schedule A, line 9a. Your monthly mortgage payment (line 3) is deducted from the CHECKING account. 6. Escape to the MAIN MENU and enter the CHECKING account. The payment lines from the MORTGAGE account appear at the end of each month (should be line 13). However you must remove the RENT lines (should be line 12), since you no longer need to rent your apartment. 7. Highlight the RENT line (should be line 12). 8. Select <R> REMOVE LINE. 9. Select <R> REPETITIVE. 10. Accept the default INTERVAL, FREQUENCY and STOP DATE by repeatedly pressing the Enter key. CHAPTER 3: TUTORIAL 18 11. Answer 'Y' to also remove this line in the RENT account. The RENT lines for the year are removed. 12. Escape to the MAIN MENU and select Tax form FA1-SCH A ITEMIZED DED. Line 5 is the total of state tax withheld, line 9a is the house mortgage interest deduction and line 13 are your charitable contributions. Line 26 is the total itemized deductions. This amount is transferred to Form 1040 line 34, replacing the Standard deduction. ASSET ACCOUNT One last account needs to be added. If you look at the portfolio now, it would show a large negative value because the house mortgage account contributes a $100,000 liability. However your house is also an asset that appreciates. 1. Escape to the MAIN MENU, activate the 'Setup' window and select 'open new Account'. 2. Select 'Asset'. =Asset account============================ |Appreciation or depreciation..Appreciation| |appreciation Rate.................. 5.000| |purchase Date..................... 1/ 1/93| 3. Complete the 'Asset account' |purchase Price..................100 000.00| dialog box. |aCcount purchased from........ | |First appreciation date........... 1/31/93| |Interval......................Monthly | |freQuency.............................. 1| |Last appreciation date............12/31/93| |***************OPEN ACCOUNT***************| ========================================== 4. Select 'OPEN ACCOUNT' at the bottom of the dialog box. 5. Name the account 'HOUSE VALUE'. Each APPRECIATION line shows the monthly increase in your house value. ADJUSTING PORTFOLIO LINES Although the HOUSE VALUE account computes the appreciated value of your home, it does not consider the Realtor commission you would pay should you decide to sell. The following example reduces each amount of the HOUSE VALUE line in the Portfolio by a 6.5% Realtor commission. 1. Return to PORTFOLIO A. The new accounts HOUSE VALUE and MORTGAGE are now listed. 2. Answer Y to make changes to the HOUSE VALUE line. 3. Press % to select PERCENT LINE. CHAPTER 3: TUTORIAL 19 4. Enter -6.5. Make sure you include the minus sign. All amounts on the HOUSE VALUE line are reduced by 6.5%. 5. Answer N to the cue to make changes to the MORTGAGE line. The "bottom line" total again reflects your new after tax net worth if you purchase a house. By comparing this total with the net worth calculated before buying a house, one can make a more informed financial decision. SHORT TERM PORTFOLIO You can create a second portfolio that shows only your short term (liquid) accounts (i.e., all accounts less the HOUSE VALUE and MORTGAGE accounts). 1. Escape to the MAIN MENU, activate the 'Setup' window and select 'open new Portfolio'. 2. Name the portfolio SHORT TERM. 3. Highlight the HOUSE VALUE line. 4. Press BLANK LINE. All values on the HOUSE VALUE line are removed and the total line is recalculated. 5. Repeat steps 3 and 4 for the MORTGAGE line. The total line of the SHORT TERM portfolio includes only your liquid assets. You can create a different portfolio for your IRAs, stocks, CDs, etc. QUITTING ACCOUNT II Escape to the MAIN MENU, activate the 'Quit' window and press Enter to return to DOS. WHERE TO GO FROM HERE Congratulations. You successfully navigated the Account II Tutorial. We hope you found Account II to be not only the most powerful personal finance and tax software, but also a straight forward and easy-to-use program. To start using Account II for your own finances, return to Chapter 2 and follow step 2. You should also refer to Chapter 5 to help you set up the various accounts.