This case study is designed to introduce you to using double entry computer accounting software for a small business. It covers many of the common transactions of everyday business, including GST. It is not meant to be a data entry exercise, but you are required to carefully record each transaction, understand how the software records these transactions in both the general and subsidiary ledgers and create reports.

The Athlete’s Store

The Athlete’s Store is a sports store located within the grounds of the Bundoora Sports & Aquatic Centre. The centre boasts an 8 lane Olympic size lap pool, an international standards athletic track as well as 6 Plexicushion tennis courts (official surface of the Australian Open). The centre also encompasses a gym, physiotherapy consultation rooms as well as a café.

The Athlete’s Store specialises in sales of elite sporting gear such as track footwear, swimwear, and tennis equipment. These items are sold to the general public as well as in bulk to sporting clubs and schools. The business also offers elite fitness training by their qualified personal training instructor, Stefan.

The store is owned by Jack Massi who has been operating the store for 3 years. He invested $50,000 of his own money into the business when he started operating. He is the General Manager of the store and also it’s only shareholder.

Jack’s customers are those who use the facilities or participate in the fitness classes regularly and as such know him quite well. He also sells stock in larger quantities to sports clubs and elite private schools who have the resources to purchase the products on behalf of their student sports teams.

Jack’s business also provides fitness training classes which are conducted within the sports complex. The classes run three times per week; Tuesday night is an athletic track class, Thursday night is an aqua fitness class and Saturday morning is a cardio tennis class. This structure is very popular with customers as it keeps their exercise routine interesting and varied as opposed to repetitive and uninspiring. For use of the facilities to run these classes three times per week the business is charged a small hire fee by centre management on a monthly basis.

Jack has operated the business using a manual accounting system since 2013. This year you were hired as his accountant and you discovered that Jack was writing everything down in books using a pencil and a ruler. He had kept a good record of everything but the process is tedious and outdated. Jack is hesitant to move to a computerised accounting system as he argues that if he has to learn the new system it will not save him time. You argue back and forth until you convince him that it will cost him less in accounting fees in the long run because once set up it will be faster to produce reports. He finally agrees and allows you to gather what you need to start the MYOB process.

You gather the following information that will help you set up the company in MYOB:

Company Information:

Company name: The Athlete’s Store

ABN: 97 968 969 969

Address: 31a Plenty Road, Bundoora VIC 3083

Phone: 9444 4444

Current Financial Year: 2018

Financial Reporting period: 1 July 2017 to 30 June 2018

Conversion Month: October

Accounting Periods: Twelve

This information is necessary to create the company file in MYOB

Trial Balance as at September 30th, 2017

This list below can be used to create an accounts list with the account opening balances.

General Ledger Accounts	YTD Debit	YTD Credit
Bank Account	84,269.50
Petty Cash	250
Inventory	3,291.50
Prepaid Rent	2,700
Accounts Receivable	13,880
Office Equipment	6,300
Office Equipment – Accumulated Depreciation		480
Accounts Payable		4,400
Loan AXZ Bank		30,000
GST Collected		980
GST Paid	290
PAYG Withholding Payable		1,860
Superannuation Payable		1,300
Shareholder’s Equity		50,000
Retained Earnings		17,350
Historical Balancing		0
Sales Income		27,450
Service Income		9,004
Discounts Taken		456
Purchases	16,450
Legal & Accounting Fees	300
Bank Charges	45
Depreciation	480
Office Supplies	65
Discounts Given	80
Freight Paid	58
Advertising	0
Cleaning	95
Postage	6
Rent	2,700
Telephone	450
Electricity & Gas	330
Water	170
Store Supplies	25
Staff Amenities	231
Superannuation	3,200
Wages & Salaries	6,360
Worker’s Compensation	1,100
Interest Income		67
Interest Expenses	221
Income Tax Expense	0
Total	143,347	143,347

Goods and Services Tax: Sales and Purchases

Jack charges GST on all sales and is charged 10% GST on all purchases of inventory. For all business expenses other than bank charges, wages and superannuation, Jack pays GST of 10%.

Customer account balances as at 30 September 2017

Name	Address	Date Last Invoice	Account Balance
Dolphins Swimming Club	5 Maloney Drive, Mernda ABN: 23 234 543 654	September 2^nd, 2017	$1,900
Bundoora East Primary School	9 Power Street, Bundoora East, VIC 3083 A.B.N 34 588 868 565	September 9^th, 2017	$2,200
Bundoora West Primary School	29 Edwards Street, Bundoora West, VIC 3083 A.B.N 85 959 093 282	August 12^th, 2017	$1,800
Bulleen Tennis Academy	623 Thompsons Rd Bulleen ABN: 34 567 765 876	September 15^th, 2017	$4,580
Plenty Park Little Athletics	43 Blossom Drive Plenty ABN: 87 987 987 543	September 24^th, 2017	$3,400

These are the customers that bought inventory from Jack on credit and are still owing as at 30^th September 2017. To receive payment for these customers that are billed on account you need to use the Receive Payments window.

All in-store sales are either EFTPOS, Credit Card or Cash. As there is an express AXZ Bank facility located next door to the store the cash can be banked everyday via the bank’s express deposit facility which can be operated 24 hours per day, 7 days per week. This policy of banking all takings each day is implemented for security reasons so as no money is left in the store overnight. This means that all income received from in-store sales can be entered into MYOB’s bank account immediately after each transaction. Therefore, use Enter Sales window for store sales and receive the payment in the Paid Today field at the bottom of the sale screen.

Fitness Training Price List: as at 30 September 2017

Session	Price charged per hour inc GST	Session running time
Track Training	$33	1 hour
Swim Training	$33	1 hour
Cardio Tennis	$33	1 hour

Ensure that these items are set up as inventory items that are only sold (link account to Service Sales) not purchased or inventoried.

The above prices include GST. All training revenue is strictly cash based, where customers pay before the service is performed. These training sessions are usually paid for immediately before the class however some clients pay for all three classes for the week on the day of the first class as they believe it will encourage them to show up to all three sessions.

The Fitness Training income is entered into the Enter Sales window using created customer card

Fitness Training Customers. You will also need to create inventory items called ‘Track Training’, ‘Swim Training’ and ‘Cardio Tennis Training’. Payment is received on the same window in the Paid Today field below.

Supplier account balances as at 30 September 2017

Name	Address	Supplier Terms	Account Balance
Swimmart Imports Pty Ltd	Unit 12/301 Airport Drive, Tullamarine VIC 3983 ABN: 65 567 763 555	Net 30	$300
Tennis Warehouse	5/11 Park Place, East Melbourne VIC 3005 ABN: 45 544 555 888	Net 30	$1,400
Atletico European Imports	56 Alexander Way, Port Melbourne VIC 3090 ABN: 87 987 555 232	Net 30	$2,700

These are the suppliers from which Jack purchased inventory and still had amounts owing as at 30^th September 2017.

Employees:

Jack has one full time employee and one casual employee. He also cites himself as an employee as the store’s General Manager. The business operates a 5 day week as the store is closed on Sunday’s and Monday’s. The employee details are:

Name	Address	Employment	Wages & Salaries
Jack Massi D.O.B 15 Jan 1981	5 Crissi Drive, Mernda VIC 3940 TFN: 234 543 654	Managing Director – Permanent Full Time	Annual Salary of $60,000 – paid monthly on the 15th
Sophie Woods D.O.B 28 Feb 1993	623 Thomas Rd Balwyn VIC 3409 TFN: 567 765 876	Retail Assistant – Casual	$21 per hour – paid monthly on the 15th
Stefan Rossi D.O.B 19 Mar 1990	43 Hibiscus Drive, Doncaster VIC 3545 TFN: 987 987 543	Fitness Trainer and Retail Assistant – Permanent Full Time	Annual Salary of $50,000 – paid monthly on the 15th

Full time employees are paid two weeks in arrears and two weeks in advance on the 15^th of each month. Casual employees are paid for the hours they worked for the month.

Employees are paid the obligatory 9.25% superannuation which is calculated and paid to their nominated super fund each month by the 21^st in the following month. As at 30 September $1,300 was due to be paid to Every Super Ltd in October for September’s wages.

Ensure that the Superannuation Guarantee is used and that the accounts linked are Superannuation Expense for the incursion of expenses and Superannuation Payable for the employer liability.

THE PAYROLL YEAR IS 2018****

Inventory: as at 30 September 2017

The following is a list of inventory on hand and the suppliers at the above date:

This list is entered into the Items List so as to have items ready to load when creating Sales and Purchase entries.

Quantity on hand	Item code	Description	Cost Price	Sale Price	Supplier
22	124	Track Trainers	42.50	85.00	Atletico European Imports
6	125	Gym Bags	15.00	30.00	Atletico European Imports
15	127	Swimming Goggles	9.50	19.00	Swimmart Imports Pty Ltd
24	129	Swimwear	24.00	48.00	Swimmart Imports Pty Ltd
38	130	Tennis Racquets	36.00	72.00	Tennis Warehouse
45	132	Tennis Ball Packs	4.00	8.00	Tennis Warehouse

Each of the above items of inventory are quoted net of GST. On each item, an additional 10% GST is charged on the sales price and 10% GST paid on the cost price.

Sales of the above items are recorded via the Enter Sales window using the Item Invoice layout.

Bank Loan Information:

Jack has a business loan with the AXZ Bank. Jack pays $1,240.50 per month off the loan on the 22^nd of each month. This payment includes interest and principle where the monthly interest is $340.50.

Prepaid Rent Information:

On July 1^st 2017, Jack paid $5,940 Inc. GST for 6 month’s rent in advance to the Bundoora Sports & Aquatic Centre.

Transactions during October 2017:

Date	Transaction
1 Tue	In-store sales were for 6 trainers, 8 swim goggles, 4 tennis racquets
1 Tue	15 customers paid for Tuesday’s Track Fitness Class. Of those customers 4 customers paid for all three of the weeks classes in advance.
2 Wed	Purchased 45 swim caps (new inventory item cost $6 each, sale price $12 each excluding GST) and 5 swimming goggles from Swimmart. Invoice #57
2 Wed	Tennis Warehouse had a promotion for the new children’s program TennisKids. Jack purchased 30 Junior Tennis Racquets (new inventory item for $12.50 each to be sold for $25 each excluding GST). Invoice #322
2 Wed	Sold 25 Junior Tennis racquets and 20 packs of tennis balls to Bundoora West Primary School on account. Invoice #300
3 Thu	12 customers paid for Thursdays Swim Fitness Class. Use Invoice# TC (training customers)
3 Thu	Paid the cleaner cash of $95 for store cleaning from the Petty Cash tin.
4 Fri	Sold 35 swim caps to a new customer, Bundoora Girls Grammar School (ABN 23 454 654 567 Plenty Road Bundoora) Swim Team. Invoice #301
4 Fri	Purchased 10 pairs of track sports shoes from Atletico European Imports. Invoice #98
4 Fri	After opening the shoe boxes, Jack noticed that two pairs of track shoes had missing spikes underneath. He organised a return of 2 pairs of faulty track sports shoes to Atletico European Imports for a credit off the account. Credit #98C
4 Fri	Jack decided to purchase ball machines for his store. As they are rather expensive and Jack is not sure whether they will sell easily, he decides to purchase only 3 machines from Tennis Warehouse. They cost $2,500 each and sell for $5,000 each excluding GST. Invoice #633.
5 Sat	10 customers paid for Saturday Morning’s Cardio Tennis
5 Sat	Jack ran out of printer ink as he was printing invoices. He sent Sophie to Bundoora Stationery Store with money from the Petty Cash tin for office supplies including printer ink. She spent $83.50 in cash.
5 Sat	In-store sales were for 8 trainers and 4 gym bags
8 Tue	14 customers paid for Tuesday’s Track Fitness Class. Of those customers 3 customers paid for all three of the weeks classes in advance.
8 Tue	Sold 2 tennis ball machine to Bulleen Tennis Academy on account. Invoice #302
8 Tue	Paid BPay for electricity bill to City Electric of $126.40
9 Wed	Received payment from Bulleen Tennis academy for amounts owing from September 2016.
9 Wed	Received payment for Invoice #300 from Bundoora West Primary School.
10 Thu	Purchased 12 gym bags ($65 excluding GST cost price) from new supplier Champion Sports Imports (ABN 86 579 684 676, Factory 4/11 International Drive, Airport West 3098). Their terms are Net 30 days with no early payment discount offered. Invoice #888
10 Thu	Bundoora Girls Grammar returned 5 faulty swim caps. Credit note #305C. They argued that the store room should be checked for mice as the holes in the caps look like mice bites. On the same day they paid the balance of their account.
10 Thu	11 customers paid for Thursday’s Swim Fitness Class

11 Fri	In-store sales were for 7 pairs of trainers and 5 gym bags
12 Sat	In-store sales were for 8 swimsuits
12 Sat	9 customers paid for Saturday Morning’s Cardio Tennis
15 Tue	18 customers paid for Tuesday’s Track Fitness Class
15 Tue	Paid Wages for October. Jack and Stefano received full monthly salary (net $4003 and $3455.67 respectively), Sophie worked 65 hours for September/October for $1365 net.
17 Thu	13 customers paid for Thursday’s Swim Fitness Class
18 Fri	A new customer, Natasha Karilovinokova (ABN 76 545 664 755, Russian Consulate), ordered 7 trainers in a women’s size 11(!) for the visiting Russian women’s basketball team. As the large size was not available in store Jack put the trainers on back order for the customer. Sales Order #310.
19 Sat	Paid Superannuation payable for the previous month to EasySuper. Cheque #42
19 Sat	After seeing Australian Jimmy Carter win Wimbledon, 22 customers paid for Saturday Morning’s Cardio Tennis.
22 Tue	Paid the monthly repayment for the business loan.
22 Tue	8 customers paid for Tuesday’s Track Fitness Class.
23 Wed	A Jamaican just broke the 100meter world record. In anticipation of a surge in customers wanting to use this as inspiration to train harder, Jack places an order for 45 pairs of track shoes from Atletico for the upcoming summer athletics season. Purchase Order #PO123.
24 Thu	12 customers paid for Thursday’s Swim Fitness Class
24 Thu	After an attempted break in, Jack purchased $4400 inc. GST worth of surveillance and security equipment for the store. The equipment was paid for with a loan given to him by his concerned mother. He promised he will pay her back when he can. The equipment is depreciated using the straight line method over its four year useful life. Record the purchase of the equipment and the loan to his mother using a General Journal. You will have to create an asset account and a liability account for each.
25 Fri	Paid $375 for advertising in the Sun Newspaper Health Guide. Cheque # 43
25 Fri	The stock ordered on 18^th has been shipped to customer. Charged freight on delivery of $45.
26 Sat	5 customers paid for Saturday Morning’s Cardio Tennis
29 Tue	After torrential rain flooded the track and tennis courts, all fitness training was suspended for the last week of October.
29 Tue	Received a phone call from Bundoora East Primary School saying that we sent them an invoice with Bundoora West Primary School listed as the customer. After some investigating it was found that Sophie accidently entered the incorrect customer on the invoice. Jack needs to delete the original sales invoice from the 2^nd October and the payment on the 9^th October and re-enter a new one with the correct customer Bundoora East Primary School.
30 Wed	The order which was placed on the 23^rd October was delivered to the store. Invoice #211
31 Thu	Monthly bank statement received from AXZ Bank showed the following transactions on the 31^st October: Bank Charges $15 Interest Income $23

Balance Day adjustments at 31st October 2017

Depreciation for all non-current assets are to be recorded for the month of October 2017. The Office Equipment which was purchased on 1^st June 2017 is to continue to depreciate using the straight-line method over a 4 year useful life with no residual value. Calculate depreciation for 1 month and enter it using a General Journal Entry.
Calculate depreciation on security cameras for 7 days (i.e. 24^th Oct -31^st October) and enter using a General Journal Entry.

Jack has used up 1 more month in prepaid rent. Enter the expensed amount in a General Journal Entry.

Required:

Once you have read through the assignment complete the following tasks in order and produce the following reports

Part 1

Enter the business information including name, address, ABN and company preferences.
Establish a chart of account based upon the trial balance and enter the opening balances correctly. Produce a PDF of the Accounts List as at 1/10/2017

Record the supplier and customer details as well as their opening balances – apply the amounts to corresponding sales and purchases. Produce a PDF of the Customer Card List and the Supplier Card List as at 1/10/2017

Enter the employee information. Produce a PDF of the Employee Card List as at 1/10/2017
Enter inventory item details and enter opening balances for each item. Produce a PDF of the Inventory on Hand List as at 1/10/2017.

Part 2

Record the transactions for October 2017
Calculate and record adjusting entries for the month of October 2017

Produce a Transaction Journal List for 1/10/2017 – 31/10/2017

Part 3

Prepare the following reports for 31^st October 2017:

Trial Balance
Aged Debtors Report

Aged Creditors Report iv. Income Statement for October 2017

Balance Sheet
The General Ledger accounts for Cash at Bank, Inventory and GST Collected, GST Paid.

Here is a list of things you can do in order to attempt to gain full marks.

Start the assignment early and finish early so that you have plenty of time to go back over your work and find any errors.
Keep regular copies of your files
Set regular times to complete the tasks and set deadlines that you can realistically achieve.
Compare your work with as many other students as possible before you hand it in. If you find that you have recorded things differently, you both can’t be right, or you can both be wrong, so discuss it and make the necessary corrections.
Check your spreadsheets carefully after you have exported your files.

Students have traditionally made the same predictable mistakes. Some common mistakes include (but are not limited to) the following:

Incorrect amounts entered into the opening balances in the chart of accounts. Check to ensure that the amounts entered are positive except for the contra accounts.
Wrong amounts recorded – eg Incorrect sales/purchases amounts
Enter an order incorrectly as an invoice
Transactions recorded twice
Entering freight into the incorrect screen
Entering expense payments into supplier purchases command centre  GST missing or applied where it shouldn’t be.  Missing end of month adjusting entries.

Submission instructions

Assignments with NO MYOB solution file (Myo. Format) will be granted a zero mark. All files must be saved based on your student ID number. All the following reports and files must be submitted to the assignment submission box.

1	Account list [Summary] – PDF format
2	Aged payables [Summary] – PDF format
3	Aged Receivables [Summary] – PDF format
4	Employee Employment Details – PDF format
5	General ledger [Detail] 1/10/2017 to 31/10/2017 – PDF format
6	Item list [Summary] – PDF format
7	Profit & loss statement October 2017 – PDF format
8	Balance sheet As of October 2017 – PDF format
9	All Journals 1/10/2017 to 31/10/2017 – PDF format
10	Trial Balance October 2017 – PDF format
11	MYOB solution file – Myo. Format

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