TELS 3340 Chapter Notes - Chapter 1: Henri Fayol
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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 Diversâ 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 â (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: |
4 | Paid electricity bill for July $ 660(including GST) [chq 94] |
5 | Five cash customers paid for diving course. ($150+ GST eachperson). |
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 â 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. |
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:Peterâ28hourandJulia22hours.
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 monthâs 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).
