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Background Assume that Brisbane Divers operates as a partnership and you and your group members are the owners of that company. Brisbane Divers specializes in

Background

Assume that Brisbane Divers operates as a partnership and you and your group members are the owners of that company. Brisbane Divers specializes 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.

Employees

Brisbane Divers employs two casual assistants. Julia Hilton works as a dive instructor on the boat, and Peter Ball works in the shop selling stock, and taking bookings for dive lessons. Each employee works between 20 to 30 hours per week, depending on the season and demand. Payday is every second Saturday. The following information is used to calculate their wages:

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 to both 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, except Wages.

Merchandise Inventory:

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

Each of the above items of inventory is quoted excluding GST.

Restocking inventory.

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

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

Lessons:

A part of Brisbane Divers income is earned from conducting diving lessons.

The lessons are quoted excluding GST. Lessons revenue must be recorded separately from 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 of inventory received on July 28th all purchases are on terms net 30 days.

Customer Information:

Brisbane Divers sells most of its inventory strictly on a cash basis, but the business has three credit customers. Terms of payment 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). [chq 90]

3

Paid Cash for vehicle expenses- $275 (GST Inclusive) [chq 91]

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 each person). The course commences on August 8 (since the service will be provided within August, consider this as cash sales for August directly. No need to record as unearned.)

7

Paid SeaWorld Ltd. for July account. [chq 95]

7

Paid advertising in the Williamsville Times - $275(GST Inclusive) [chq 96]

8

Sales Invoice sent to Swimmers World for the following items: 15 x DMS, 18 x SNO

9

Pay day. Julia was paid for 30 hours and Peter was paid for 22 hours, which includes wages owing from July [chq 97 and 98]

12

Received payment from Brisbane Academy World for July account.

14

Cash sales: Inventory sold: 10 x DMS, 12 EPS

16

Cash drawings Cheque payable to one of your group members$5000[chq 99]

16

Paid Planet Dives Ltd. for July accounts. [chq 100]

19

10 cash customers paid for diving course. ($150+GST each person).( 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 this transaction. [ chq 101]

23

Pay day. Peter was paid for 20 hours and Julia was paid for 25 hours. [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) [chq 105]

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 down value.

Accruedwages:Peter28hourandJulia22hours.

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

received.

Part A: Manual Recording (15%)

IMPORTANT: Part A Manual Recording

Required:

a) Record the opening balances as at 1 August 2018 in the appropriate general ledger accounts.

b) Record August months transactions in the general journal and post these to the generalledger.

c) Record end of month adjustments in the general journal and post these to the general ledger.

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

e) Prepare an Income Statement for August 2018 and a BalanceSheet as at 31August 2018.

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