Case Study 1

Introduction

In this assignment students are required to use the:

  • General Ledger
  • Banking
  • Sales – Accounts Receivable
  • Purchases – Accounts payable Inventory

modules of the MYOB computer accounting program to process transactions and to produce a set of accounting reports relating to business operations.

Input Business data

The business is a book retailer named, “Student Name Pty Ltd” (students are to insert their own name) and is located at Your Address – Sydney NSW 2000.The firm’s sales are both over-the-counter cash and credit to well known customers.

 

Company Name Address ABN Current

Financial Year

Last Month of Financial

Year

Starter Chart
“Your name”

Books Pty Ltd

 Your Address Your student Number 2020 June Retail Book store

 

New Financial Year starting               July, 2019

Conversion month:                          July 2019

 

Chart of Accounts

You are to create your own chart of accounts by using one of the default charts provided by MYOB which most closely resembles the business or you can choose the ‘Build your own’ option. If you are using one of the default charts, you may be required to modify/delete accounts to suit the nature of the transactions as given in the question.

 

Transaction Source

Cash registers – for cash sales

Invoices – for credit sales

Cheque book – for cash payments

Deposit books – for cash receipts

Bank statements – for direct charges and direct deposits

Supplier invoices – for goods and services

Working papers – for adjusting and miscellaneous entries

 

GST

Please note that GST free items are bank fees, salaries and wages, interest expense, superannuation and fines – you can check with your lecturer for others.

Transaction Period

New financial year starting 1st July 2019, and the processing period is July 2019, the current financial year is 2020, conversion month being July and there are 12 periods.

 

Opening Balances as at 1 July 2019

 General Ledger Account Balances Dr $ Cr $
Cash at Bank 48,000  
Accounts Receivable 52,000  
Inventory control 130,000  
Prepayments 10,000  
Shop Fixtures and Equipment 350,000  
Accum Depn – Shop Fixt & Equip   120,000
Goodwill 50,000  
Accounts Payable   40,000
GST payable (collected)   20,000
GST receivable (paid) 15,000  
Accrued expenses   10,000
PAYG Withholding   10,000
Provision for dividend   50,000
Loan – noncurrent   250,000
Issued and Paid up capital   120,000
Retained Earnings   35,000
  655,000 655,000

 

Customers

  1. Students are required to make up their own unique customer names and addresses.
  2. Only credit sales are recorded, cash sales are put through the cash book.
  3. The firm’ credit policy is 30 days.
  4. Information provided for customers and their balance as at 1 July is as follows:

 

Accounts Receivable Control
 

Customer Code

 Balance Outstanding $ Days Outstanding
C01 15,000 60
C02 12,000 30
C03 2,000 60
C04 7,000 30
C05 2,000 30
C06 4,000 60
C07 3,000 30
C08 2,000 30
C09 4,000 30
C10 1,000 30
Total 52,000  

 

Suppliers

  1. Students are required to make up their own unique supplier names and address.
  2. Accounts Payable ledger has suppliers entered for trading stock as well as other goods and services acquired on credit.
  3. Cash purchases, are processed directly through the cash book.
  4. All suppliers extend the normal 30 day terms, with no discount for prompt payment.
  5. Information provided for suppliers and their balance as at 1 July is as follows:

 

 

Accounts Payable Control
 

Supplier Code

 Balance Outstanding $  

Invoice Date
S01 – Trading Goods 6,000 1st June
S02 – Trading Goods 2,000 5th June
S03 – Trading Goods 12,000 7th June
S04 – Trading Goods 8,000 8th June
S05 – Telephone Co 1,000 12th June
S06 – Stationery 1,500 15th June
S07 – Car Garage Co 1,500 6th June
S08 – Trading Goods 3,000 13th June
S09 – Advertising Co 4,000 16th June
S10 – Courier Co 1,000 14th June
Total 40,000  
 

Be sure to enter an ABN numbers for each supplier when creating the Supplier’s account otherwise there are taxation implications.

 

All suppliers must have an ABN Number.

 

Inventory

  1. Students are required to make up their own unique product names.
  2. Inventory unit measure is per book item
  3. The firm uses the perpetual inventory method of accounting for inventory, (that is when inventory is purchased it is added (debited) to ‘Inventory ‘account and when it is sold, the cost is debited against ‘Cost of sales’ and credited against Inventory).
  4. Information provided for inventory and their balance as at 1 July is as follows:

 

  Inventory Control  
 

Product Code

 Quantity on Hand Unit cost ($) Value of Inventory Unit Sell Price

Excluding GST
P01 1,000 $10.00 $10,000 $20.00
P02 250 $20.00 5,000 $40.00
P03 700 $10.00 7,000 $20.00
P04 1,000 $13.00 13,000 $26.00
P05 1,000 $5.00 5,000 $10.00
P06 1,000 $15.00 15,000 $30.00
P07 1,000 $12.00 12,000 $24.00
P08 1,000 $30.00 30,000 $60.00
P09 2,000 $13.00 26,000 $26.00
P10

 

 700

 

 $10.00

 

 7,000 $20.00

 
$130,000

 

Transactions for July 2019

Data source: Suppliers’ Invoices. Dates shown are invoice dates, amounts include GST.

 

Date Transaction Details
1st Jul Received invoice from S01 for 100 books – stock item P01, for $1,320.00.
2nd Jul Received invoice from S04 for 100 books – stock item P02, $1900.00
3rd Jul Received invoice from S03 for 150 books, stock item P09 for $2,145.00 The Warehouse manager reported that only 140 books of product P09, had been received. Accounts department adjusted S03’s account for the short delivery.
4th Jul Purchased stationery on account from S06 for $550.00 (Charged to Expense account)
6th Jul Received invoice from S08, $300 for 20 books – stock item P06.
7th Jul Received invoice from S03, for 200 books – stock item P04 $2,800
14th Jul Received invoice from S11 (new) $250.00 for July’s cleaning.
18th Jul Received invoice from S12 (new) $3000.00 for legal fees in relation to lease.
21st Jul Invoice from S10 for July’s courier service, $620.00.
24th Jul Received invoice from S05 for telephone for the month $835.00.
26th Jul Received invoice from S09 for advertising undertaken in July $4,500.00.
31st Jul Received invoice from S07 for petrol and repairs for company vehicle $550.00.

Data source – sales invoices and cash register tapes – sales include GST.

 

Cash sales

Date Transaction Details
1st Jul Sold 140 units P01
8th Jul Sold 50 units of P02 and 50 units of P03
12th Jul Sold 30 units of P03, 25 units of P06, 30 units of P07 and 15 units of P08,
15th Jul Sold 20 units of P04, 15 units of P06 and 55 units of P08,
18th Jul Sold 35 units of P02, 10 units of P03, 35 units of P05, and 50 units of P10.
22nd Jul Sold 8 units of P03, 75 units of P04, 35 units of P06 and 15 units of P09.
31st Jul Sold 15 units of P06, 75 units P07 and 45 units P08.

Credit sales:

Date Transaction Details
5th Jul Invoice to C01 for 100 units of P08
8th Jul Invoice to C10 for 50 units of P10
12th Jul Invoice to C02 for 250 units of P01
14th Jul Invoice to C09 for 30 units of P02, 35 units of P03
15th Jul Invoice to C03 for 65 units of P02 and 200 units of P04
16th Jul Invoice to C07 for 80 units of P05
17th Jul Invoice to C08 for 90 units of P04
20th Jul Invoice to C04 for 50 units of P05 and 40 units of P08
22nd Jul Invoice to C06 for 200 units of P06 and 50 units of P07
22nd Jul Invoice to C05 for 100 units of P05 and 30 units of P07
23rd Jul Invoice to C05 for 255 units of P08
24th Jul Invoice to C06 for 125 units of P02.
24th Jul Invoice to C04 for 50 units of P09 and 60 units of P10
26th Jul Invoice to C07 for 70 units of P06
28th Jul Invoice to C08 for 100 units of P03 and 20 units of P09

 

Data source – deposit book (cash receipts)

The daily over-the-counter cash takings are banked the same day. Other receipts include payments by account customers, as follows:

 

Date Transaction Details
17th Jul Customer C01 paid $15,000.00
18th Jul Customer C02 paid $12,000.00
19th Jul Customer C03, paid $2,000.00
20th Jul Customer C04 paid $7,000.00
21st Jul Customer C06 paid $4,000.00
22nd Jul Customer C07, paid for balance of his account as at 30 June, plus the purchases during the month made prior to 20th July.
23rd Jul Customer C08 paid $2000.00
24th Jul Received $4,000.00 from C09.
31st Jul At the end of the month, after the depreciation charge was made for the month, the business sold old Shop Fixtures and equipment for cash

which had a written down value of $3,800.00 at the time of sale for $3,300.00 (GST inclusive). The plant and equipment originally cost $12,000.00.

 

Data source – cheque book (cash payments) 

Date Transaction Details
1st Jul Drawn a cheque for $1,000.00 start a Petty Cash float. (Cheque 1055)
2nd Jul Reimbursed $110.00 to an employee for travel expenses incurred. (Cheque 1056)
4th Jul Paid Junes sales commission owing to retail assistants of $10,000.00 previously accrued. (Cheque 1057)
15th Jul Paid June’s PAYG withholding tax of $10,000.00 (Cheque 1058)
16th Jul Paid GST obligation for June, as per trial balance. (Cheque 1059)
17th Jul Paid S01 the balance of the account as at 30 June. (Cheque 1060)
19th Jul Paid S02 the balance of the account as at 30 June.(Cheque 1061)
20th Jul Paid S03 $12,000 being the amount owing as at 1st July. (Cheque 1062)
23rd Jul Paid $3,000.00 employee superannuation (Cheque 1063)
27th Jul Paid balance as at 1 July owing to

S04 (Cheque 1064)

S05 (Cheque 1065)

S06 (Cheque 1066)

S07 (Cheque 1067)
28th Jul Paid wages to employees for the month amounting to $28,000 net of withholding tax. Cheque 1068). The withholding tax of $9,000 is to be paid on the 21 August.
29th Jul Reimbursed petty cash for Travelling Expense $220, Office Supplies $165, Postage $187, the total of the cheques drawn being $572 (Cheque 1069)
31st Jul The Directors paid $50,000 dividends, as provided in June. (Cheque1070)

 

Data source – bank statements

Date Transaction Details
18th Jul Periodic payment for lease of POS equipment $990.00 for July.
31st Jul Bank fees of $110.00 were charged to the account.

Data source – notes and working papers – Month end adjustments

Date                                           Transaction Details
31st Jul      Shop fixtures and equipment are depreciated at 20% p.a. diminishing value and the entry for July 2019 (being 31 days of depreciation) needs to be made.

31st Jul      Sales commission earned by retail assistants, but not paid at 31st July amounted to $5000.00.

31st Jul      Prepaid expenses as at 30 June ($10,000.00) represented the premium paid on annual policy starting on 1 May 2019. Record the insurance expense expired for the month of July.

31st Jul      The company’s long term loan is at 9.00% p.a. Interest is paid quarterly, but needs to be accrued for July (31 days).

31st Jul      Create a provision for doubtful debts equal to 5% of Accounts Receivable balance as at 31st July.

31st Jul      Estimated electricity usage for July amounted to $2,100.00 and this amount is to be accrued as at 31st July.

 

No GST on accruals.

The bank statement received from the bank at the end of July is as follows:

 

NABBY Bank Ltd Business Trading Account

Branch: Wetherill Park

Bank & BSB No. 099 – 166

Account No. 2210 05678

Account Name: Case Study 3

ACN: 35 246 135 789

                          The Manager,

Your Names Books Pty Ltd

 

From:                  1-Jul-2019

                          55 Smith Avenue

                         Sydney NSW 2000

To:                     31-Jul-2019  

 
Date Particulars Debit Credit Balance
1-Jul Opening Balance     $48,000.00
2-Jul Deposit – Cash & Cheques   $3,080.00 $51,080.00
3-Jul Chq# 1055 $1,000.00   $50,080.00
6-Jul Chq# 1056 $110.00   $49,970.00
7-Jul Chq# 1057 $10,000.00   $39,970.00
9-Jul Deposit – Cash & Cheques   $3,300.00 $43,270.00
13-Jul Deposit – Cash & Cheques   $3,267.00 $46,537.00
16-Jul Deposit – Cash & Cheques   $4,697.00 $51,234.00
18-Jul Periodic Payment – POS Equip $990.00   $50,244.00
19-Jul Deposit – Cash & Cheques   $3,245.00 $53,489.00
19-Jul Chq# 1058 $10,000.00   $43,489.00
20-Jul Deposit – Cash & Cheques   $15,000.00 $58,489.00
21-Jul Deposit – Cash & Cheques   $12,000.00 $70,489.00
13-Jul Chq# 1059 $5,000.00   $65,489.00
22-Jul Deposit – Cash & Cheques   $2,000.00 $67,489.00
23-Jul Chq# 1060 $6,000.00   $61,489.00
23-Jul Deposit – Cash & Cheques   $3,905.00 $65,394.00
24-Jul Chq# 1061 $2,000.00   $63,394.00
24-Jul Deposit – Cash & Cheques   $7,000.00 $70,394.00
25-Jul Chq# 1062 $12,000.00   $58,394.00
25-Jul Deposit – Cash & Cheques   $4,000.00 $62,394.00
26-Jul Deposit – Cash & Cheques   $3,880.00 $66,274.00
26-Jul Chq# 1063 $3,000.00   $63,274.00
27-Jul Deposit – Cash & Cheques   $2,000.00 $65,274.00
28-Jul Deposit – Cash & Cheques   $4,000.00 $69,274.00
30-Jul Chq# 1064 $8,000.00   $61,274.00
30-Jul Chq# 1065 $1,000.00   $60,274.00
30-Jul Chq# 1066 $1,500.00   $58,774.00
30-Jul Chq# 1068 $28,000.00   $30,774.00
31-Jul Chq# 1069 $572.00   $30,202.00
31-Jul Bank Fees and Charges $110.00   $30,092.00

Transaction not shown on the Bank Statement are either UNPRESENTED CHEQUES or OUTSTANDING DEPOSITS.

Required:

  1. Set-up the business in MYOB – Remember to incorporate YOUR NAME as part of the company name.
  2. Modify the chart of accounts as required to ensure that the transactions affecting the company are recorded and classified correctly.
  3. Enter the Opening Balances to the General Ledger and set up the subsidiary ledger for Customers, Suppliers and Inventory.
  4. Process transactions for July, including the completion of the Bank Reconciliation.
  5. Print reports for the month of July to be submitted, are as follows:
    • Accounts (General Ledger)

Accounts List – Summary

Trial Balance

Transaction Journals = General Journal

Profit & Loss Accrual

Standard Balance Sheet

  • Sales (Accounts Receivable)

Receivables – Reconciliation Summary

Item – Sales Summary

  • Purchases (Accounts Payable) Payables – ReconciliationSummary

Item -Purchase Summary

  • Banking

Transaction Journals

Cash Disbursements Journal

Cash Receipts Journal

Cheques and Deposits

Reconciliation Report

  • GST / Sales Tax Reports

GST Reports GST [Detail – Accrual]

  • Inventory Items

Items List Summary

Inventory Value Reconciliation

 

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