Question

Case Study Background

Assume that Brisbane Divers (ABN 34 255 712444) operates as a partnership and you and your groupmembers are the owners of that company. Brisbane Divers specializesin selling locally manufactured diving equipment and takes studentson diving courses in its boat. The business charges GST on allinventory sales and dive lessons and pays GST on inventorypurchases and most business expenses.

Employees

Brisbane Divers employs two casual assistants. Julia Hiltonworks as a dive instructor on the boat, and Peter Ball works in theshop selling stock, and taking bookings for dive lessons. Eachemployee works between 20 to 30 hours per week, depending on theseason and demand. Payday is every second Saturday. The followinginformation is used to calculate their wages:

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Name	Role	Gross pay- Per hour ($)	PAYG tax Per hour ($)
Julia Hilton	Dive instructor	25	6
Peter Ball	Shop assistant	20	5

At the end of July, Brisbane Divers owed 4 hours pay toboth Peter and Julia.

Note: Do not use the employee section of MYOB,record the wages expense and tax as a cash payment.
Goods and Services Tax
All transactions which incur GST are identified, the GST is 10%

Goods and Services Tax:

Brisbane Divers pays GST of 10% on all business expenses, exceptWages.

Merchandise Inventory:

The following is a list of closing inventory and the suppliersas at July 31 2018.

Each of the above items of inventory is quoted excludingGST.

Restocking inventory.

The required inventory is purchased on credit under the terms ofpayment required by the suppliers.

Your group members have a good relationship with each of thesuppliers once your company places an order, the suppliers willdeliver them free of charge the same day.

Lessons:

A part of Brisbane Divers’ income is earned from conductingdiving lessons.

The lessons are quoted excluding GST.
Lessons revenue must be recorded separatelyfrom sales.

Quantity on hand	Item Code	Description	Cost Price	Sale Price	Supplier
23	DMS	Diving Masks	$130	$250	Scuba Gear Ltd.
24	EPS	Exposure Protection Suits	$150	$280	Planet Dives Ltd
38	SNO	Snorkel	$10	$20	SeaWorld Ltd

Item Code	Lesson Type	Fee Course
DL	Diving lessons	$150

Suppliers account balances as at July 31, 2018:

Name	Address	ABN	Account Balance
Planet Dives Ltd.	400 Sydney Road, Wingy	30 444 777 333	$944
Scuba Gear Ltd.	11, Tide Towers Williamsville.	20 888 555 222	$1280
SeaWorld Ltd.	79 Rountree road, Spotswood	92 000 333 666	$2330

Each of the above account balances represents deliveries ofinventory received on July 28th all purchases are on terms net 30days.

Customer Information:

Brisbane Divers sells most of its inventory strictly on a cashbasis, but the business has three credit customers. Terms ofpayment for these customers are net 30 days.

Name	Address	ABN	Date Last Invoice	Account Balance
Swimmers World	13 Colombo Street, , VIC 3292	50 999 555 666	July 26	$2 350
Brisbane Academy	47 Bloomy Road, , VIC 3292	92 555 888 111	July 19	$1 940
Westley Academy	33 Departure Drive VIC 4000	20 888 444 999	July 13	$4 400

Trial Balance as at July 31, 2018

Ledger Account	Debit ($)	Credit ($)
Bank	16 096
Stationery	2 500
Prepaid Insurance	3 000
Merchandise Inventory	6 970
Trade Debtors	8 690
Trade Creditors		4 554
Motor Vehicle	22 500
Accumulated Depreciation of Motor Vehicle.		6 850
Diving Equipment and Boat	38 900
Accumulated Depreciation of Dive Equip & Boat		11 230
Shop Fittings	5 750
Accumulated Depreciation of Shop Fittings		575
GST Collected		4 198
GST Paid	2 837
Capital		53 000
Loan - ANZ Bank, William Street.		25 500
PAYG Tax Payable		540
Wages Payable		136
Electricity Payable		660
	$107 243	$107 243

Transactions: August 2018

Date	Description
1	Paid rent for 2(two) months - $4,400 (GST Inclusive). [chq90]
3	Paid Cash for vehicle expenses- $275 – (GST Inclusive) [chq91]
3	Paid Scuba Gear Ltd. for July account. [chq 93]
4	Received payment from Swimmers World for July account.
4	Purchased more inventory 25 x DMS, 20 x EPS, 25 x SNO
4	Cash sales: Inventory sold: 10 x DMS, 6 x EPS, 20 x SNO
4	Paid electricity bill for July $ 660(including GST) [chq 94]

5	Five cash customers paid for diving course. ($150+ GST eachperson). The course commences on August 8 (since the service will beprovided within August, consider this as cash sales for Augustdirectly. No need to record as unearned.)
7	Paid SeaWorld Ltd. for July account. [chq 95]
7	Paid advertising in the Williamsville Times - $275(GSTInclusive) [chq 96]
8	Sales Invoice sent to Swimmers World for the following items: 15x DMS, 18 x SNO
9	Pay day. Julia was paid for 30 hours and Peter was paid for 22hours, which includes wages owing from July [chq 97 and 98]
12	Received payment from Brisbane Academy World for Julyaccount.
14	Cash sales: Inventory sold: 10 x DMS, 12 EPS
16	Cash drawings – Cheque payable to one of your groupmembers$5000[chq 99]
16	Paid Planet Dives Ltd. for July accounts. [chq 100]
19	10 cash customers paid for diving course. ($150+GST eachperson).( The course commences on 20th of August)
21	Received payment from Westley Academy for July account
23	Paid monthly repayment to ANZ for bank loan. $500 (includes $50 interest). GST is not payable on thistransaction. [ chq 101]
23	Pay day. Peter was paid for 20 hours and Julia was paid for 25hours. [chq 102 and 103]
25	Paid Electricity for August - $880 (GST Inclusive) [chq 104]
29	Swimmers World paid for items purchased on August 8.
31	Paid Telephone Expenses for August $660 (including GST) [chq105]

Adjustments at 31 August 2018

Depreciation of motor vehicle 20 % per annum at cost.

Depreciation of diving equipment and boat $6000 per annum.

Depreciation of Shop Fittings 10 % per annum at written downvalue.

Accruedwages:Peter–28hourandJulia22hours.

Accrued Cleaning expenses for August $ 1100(including GST). Atax invoice has been

received.

Stationery on hand at 31 August 2018 totaled $ 1590.

The portion of prepaid insurance expired as of 31 August 2018 is$2,500.

Water bill for August is unpaid and unrecorded $750 Plus GST. Atax invoice has been

received.

Part A: Manual Recording

IMPORTANT: Part A ManualRecording

Required:

Record the opening balances as at 1 August 2018 in theappropriate general ledger accounts.

Record August month’s transactions in the general journal andpost these to the generalledger.

Record end of month adjustments in the general journal and postthese to the general ledger.

Prepare a Trial Balance after end of month adjustments as at 31August 2018

PrepareanIncomeStatementforAugust2018andaBalanceSheetasat31August2018.

Part B: Computerised accounts using MYOB

1.Enterthebusinessinformation,establishachartofaccounts,recordsupplierandcustomerbalances, enter inventory balances and record opening ledgeraccount balances as at 1 August 2018.

2. Record the transactions, including the adjusting entries, forthe month of August 2018.

3. Produce Trial Balance as at August 31st, 2018 (after alladjustments). (This MUST be directly printed from MYOB).

4. Produce Transaction Journal from 1 August to 31 August forall transactions. (This MUST be directly printed from MYOB).

5. Produce Income Statement for month ended August 2018 (ThisMUST be directly printed from MYOB).

6. Produce Balance Sheet as at 31st August 2018 (This MUST bedirectly printed from MYOB).