ACC10008 Financial Information Systems Computer Accounting Assignment MYOB Case Study Deeper Dives

General Information: 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 (VAT in some countries). 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 using an excel spreadsheet. Specific Information: Deeper Dives (ABN 84 958 732 843) is owned and operated by Fred Flathead and is situated at 122 Slides Street, Williamsville, Victoria, 3957. Deeper Dives specialises in selling locally manufactured diving equipment and takes students on diving courses in its boat. The business charges GST on all inventory sales and dive lessons, and pays GST on inventory purchases and most business expenses. Fred Flathead has operated the business using single entry manual accounting techniques on a spreadsheet. His accountant has suggested that Fred converts the single entry information into double entry computer accounting software. Fred employs you to establish the business records starting on March 1, 2014.

Employees: Deeper Dives employs two casual assistants. Katerina Cray works as a dive instructor on the boat with Fred, and Peter Prawn works in the shop selling stock, and taking bookings for dive lessons. Fred pays Katerina $25 per hour gross wages, and deducts $6 per hour PAYG tax payable. Peter is paid $20 per hour gross, with $5 per hour deducted for PAYG tax payable. Each employee works between 10 to 15 hours per week, depending on the season and demand. Payday is every second Wednesday. At the end of February, Deeper Dives owed 2 hours pay to both Peter and Katerina. Goods and Services Tax: Deeper Dives pays GST of 10% on all business expenses, except Wages. Fixed assets acquisitions are also taxed at 10%. 1

Merchandise Inventory: The following is a list of closing inventory and the suppliers as at February 28th , 2014. Quantity Item Description Cost Sale Supplier on hand Code Price Price 10 SDS Summer Dive Suit $143.00 $275.00 Right Dive Pty Ltd 15 22 48 36 WDS BV DSK LDM Winter Dive Suit Buoyancy Vest Dive Starter Kits Learn to Dive Manuals $165.00 $308.00 Right Dive Pty Ltd $45.00 $44.00 $6.60 $82.50 Sponge Bob Industries $77.00 Sponge Bob Industries $11.00 Plankton Publishers

Each of the above items of inventory is quoted including GST. Restocking inventory. The required inventory is purchased on credit under the terms of payment required by the suppliers. Fred has a good relationship with each of his suppliers once he places an order, the suppliers will deliver them free of charge the same day. Lessons: A part of Deeper Dives income is earned from conducting diving lessons. Item Code Lesson Type Fee Course DL1 Introductory $150 DL2 DL3 Intermediate Advanced $210 $240

Each level contains 3 lessons, at one hour per lesson spread over 3 consecutive Saturdays. The lessons are quoted inclusive of GST. Lessons Revenue is recorded separately from sales. Suppliers account balances as at February 28th , 2014: Name Sponge Bob Industries Right Dive Pty Ltd Plankton Publishers Address 425 Sydney Road, Coburg Factory 11, Tide Towers Williamsville Business Complex 87 Circular Drive, Spotswood ABN 50 596 794 363 20 888 560 222 92 000 444 666 Account Balance $944 $1280 $2330

Each of the above account balances represents deliveries of inventory received on February 25 th all purchases are on terms net 30 days.

Customer Information: Deeper Dives sells most of its inventory strictly on a cash basis, but the business has two credit customers. Terms of payment for these customers are net 30 days. Name Swimmers City Williamsville Secondary College Bottom of the Harbour Tax Tours Address 14 Bligh Street, Williamsville, VIC 3292 47 Buckley Road, Williamsville, VIC 3292 33 Departed Drive Havens Ville ABN 50 999 555 666 92 555 888 111 20 853 478 201 Date Last Invoice Feb 27 Feb 25 Jan 3 Account Balance $2 350 $1 940 $4 400

Trial Balance as at February 28, 2014 Ledger Account Bank Merchandise Inventory Trade Debtors Trade Creditors Motor Vehicle Accumulated Depreciation of Motor Vehicle. Diving Equipment and Boat Accumulated Depreciation of Dive Equip & Boat Shop Fittings Accumulated Depreciation of Shop Fittings GST Collected GST Paid Capital Fred Flathead Unearned Lesson Fees Loan - ANZ Bank, Williamsville PAYG Tax Payable Wages Payable $101 723 $2 837 $50 000 $3 300 $20 000 $540 $68 $101 723 $5 750 $575 $4 266 $38 900 $11 670 $22 500 $6 750 Debit $16 460 $6 586 $8 690 $4 554 Credit

Transactions: March 2014. 1 1 Paid OfficeWorks - $660 (GST Inclusive) for printing. Purchased a new Apple iPhone 5 from the Apple Store for $1320 (GST Inclusive). It is expected that the phone will have a 24 month life and will have a residual value of $0 at the end of its useful life. Paid Cash for vehicle expenses- $187 (Including GST) Paid Right Dive Pty Ltd for February account. Received payment from Swimmers City for February account. Paid for two months (March and April) advertising in the Williamsville Times - $198 (GST Inclusive) Cash sales: Inventory sold: 5 x SDS, 3 x WDS, 2 x BV, 25 x DSK, 20 x LDM Four cash customers paid for a full Level I Introductory course. ($150 each person). The course commences on March 8 Paid Plankton Publishers for February account. Restocking Purchase order for 15 x SDS, 6 x WDS. Sales Invoice sent to Swimmers City for the following items: 10 x SDS, 10 x BV, 10 x DSK, 10 x LDM. Sales Invoice sent to Swimmers City for the following items: 10 students enrolled in a Level I Introductory Course. The course commences on March 15. Pay day. Katerina was paid for 28 hours and Peter was paid for 22 hours which includes wages owing from February. Restocking Purchase order for 30 x LDM. Received payment from Williamsville Secondary College for February account. Cash sales: Inventory sold: 8 x SDS, 5 x BV, 3 x DSK, 10 LDM All lessons paid in advance from February completed. Cash drawings Cheque payable to Fred Flathead $3 900 Paid Cash for vehicle expenses- $220 (Including GST) Paid Sponge Bob Industries for February accounts. Restocking Purchase order for 15 SDS. Cash sales: Inventory sold: 10 x SDS, 2 x BV, 10 x DSK. Restocking Purchase order for 30 x DSK. Returned 2 SDS to Right Dive Pty Ltd. They were slightly damaged. A Credit Note was issued by the supplier These items were from the purchase on February 16th . Paid monthly repayment to ANZ for bank loan. $350 (includes $50 interest). GST is not payable on this transaction. In addition, Fred pays an extra $3000 off the loan (all of this payment is for the loan principal). Paid Telstra Ltd for business phone accounts - $385 (GST Inclusive)

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Cash Drawings - Cheque payable to Fred Flathead $2 500 Cash sales: Inventory sold: 5 x SDS, 5 x WDS, 2 x BV, 10 x DSK, 10 x LDM.

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Pay day. Peter was paid for 30 hours and Katerina was paid for 24 hours. 10 cash customers paid in advance for a full Level I Introductory course. 4 cash customers paid in advance for a full Level II Intermediate course. The course commences on April 12. Swimmers City paid for items purchased on March 9. A customer purchased 12 x DSKs, for cash at a special price of $65 (including GST). The customer also purchased 12 x LDMs at the normal price for cash. The ANZ Bank in Williamsville has sent a bank statement for the month of March 2014. The following items were noted from the Bank Statement. The wages cheque to Katerina (March 26) had not been presented to the bank. Bank fees of $15 were debited to the account on March 22nd. (There is no GST on bank fees).

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Adjustments at March 31st , 2014 Some of the necessary adjustments are to be found in the transactions above. Other adjustments are listed below. 1. The physical stock take does not agree with the computer records. Following details relate to the missing stock. Physical stock take as at March 31st , 2014. BV DSK LDM SDS WDS 1 6 2 0 11

2. The Motor Vehicle, Shop Fittings and Diving Equipment and Boat are to be depreciated using the Straight Line method, at 15% per annum on cost. 3. Accrued Wages: Peter - 8 hours, and Katerina 9 hours.

Required:

Part 1: Enter the business information, establish a chart of accounts, record supplier and customer balances, enter inventory balances and record opening ledger account balances. Part 2: Record the transactions for the month of March 2014. Part 3: Prepare the following reports: a. Trial Balance as at March 31st 2014 (after all adjustments) b. Income Statement for March 31st 2014. c. Balance Sheet as at March 31st 2014.

ASSIGNMENT SUBMISSION: 1. Trial Balance as at March 31st 2014 (after all adjustments). This MUST be directly printed from MYOB (Marks will NOT be given for a Trial balance exported to Excel).

2. The Income Statement for March 31st 2014. Reports must follow generally accepted accounting principles This MUST be exported and printed from Excel (Marks will NOT be given for an Income Statement printed from MYOB)

3. Balance Sheet as at March 31st 2014. Reports must follow generally accepted accounting principles This MUST be exported and printed from Excel (Marks will NOT be given for a Balance Sheet printed from MYOB)

Important Information
1. If the assignment does not satisfy both of the following requirements, it will not be accepted for marking. (i) It is required that when establishing the business name for the assignment, to put the student name (Deeper Dive - Your name). For example, if the students name is John White, the company name of that students assignment would be (Deeper Dive - John White). If it is a group assignment, both students names must be recorded on the business name when they establish the company. Any assignment with no student name/ names in the company name will not be accepted.

(ii)

The Trial Balance must be directly printed form MYOB. Any assignment with Trial Balance produced in another format (e.g. Excel) will not be accepted for marking.

2. It is the students responsibility to keep a backup copy of the assignment until all the assignment process is completed and marks are on blackboard.

3. The Financial Statements are to be presented in accordance with generally accepted accounting principles. principles (HINT: You will need to change some of the automatic settings of the financial statements when you convert them from MYOB into Excel). MYOB may not necessarily produce financial statements according to these accepted

4.

Grade scale for the MYOB Assignment is as follows: Grade scale for the MYOB Assignment Description Recording of Transactions accurately. PresentationPreparation of the Income statement and the Balance sheet must be in accordance with the generally accepted accounting principles. Total Possible Marks 5 20 Maximum Possible Marks 15

5.

The assignments handed in late will be penalised as explained in the unit outline. Please refer to the unit outline for details.