Merchandise Inventory The following is a list of closing inventory and the suppliers as at 28 February 2015. Quantity on hand Item Code Description Cost Price Sale Price Supplier 20 SFB Surfboards $360 $550 Custom Surfboards 12 SLB Sailboards $600 $950 Wave Rider 15 BBD Boogie Boards $80 $120 Highlands Surfway 30 SFM Surfing Manuals $10 $20 Seahorse Publishers 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. Al 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 Surf Haven’s income is earned from conducting surfing lessons. Item Code Lesson Type Fee Course SL1 Introductory $100 SL2 Intermediate $150 SL3 Advanced $200 Each level contains three lessons, at one hour per lesson spread over three consecutive Saturdays. The lessons are quoted excluding GST. Lessons revenue is recorded separately from sales. Supplier information Suppliers account balances as at 28 February 2015. Name Address Account Balance Custom Surfboards 56 Main Street, Torquay $3,500 Wave Rider 2 Beach Road, Fairhaven $5,000 Highlands Surfway 298 Carlton Parade, Geelong $2,200 Seahorse Publishers 1B Smith Street, Geelong $800 Each of the above account balances represents deliveries of inventory received on 26 February 2015; all purchases are on terms net 30 days. Page 3 of 7 Customer information Surf Haven 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 Date Last Invoice Account Balance Sharkeys Wye River 14 Bay Street Wye River Feb 27 $2,400 Torquay Surf Shop 47 Buckley Road, Torquay Feb 24 $4,000 Aireys Surf Club 3 Aireys Lane Aireys Inlet Feb 28 $1,700 Trial Balance as at 28 February 2015 Account Debit ($) Credit ($) 1-1110 Bank 10,500 1-1200 Accounts Receivable 8,100 1-1300 Inventory 15,900 1-3110 Shop Fittings & equipment (cost) 12,500 1-3120 Accumulated depreciation Shop fittings & equipment 750 1-3210 Motor vehicle (cost) 21,000 1-3220 Accumulated Depreciation - Motor Vehicle. 3,500 2-1200 Accounts Payable 11,500 2-1310 GST Payable 485 2-1350 Wages payable 165 2-2100 Loan – ANZ Bank, Bell’s Inlet 25,000 3-1200 Capital – Al Jardine 26,600 Total 68,000 68,000 Transactions: March 2015 1 Paid cash for printing expenses to Acorn Press– $594 (GST Inclusive).[chq 201] 1 Purchased a new cash register for $2,310 (GST inclusive) [chq 202].It is expected that the cash register will have an effective life of 6 years with a nil residual value. 2 Paid three month’s rent of $4,620 (GST inclusive) to Prime Real Estate. [chq 203]. 3 Paid cash to GMJ Autos for vehicle expenses- $297 – (Including GST) [chq 204] Page 4 of 7 3 Paid Highlands Surfway for the February account. [chq 205] 4 Paid for two months (January and February) advertising in the Surfing Times – $286 (GST inclusive) [chq 206] 4 Cash sales: inventory sold: 2 boogie boards, 2 surfboards, 3 surfing manuals (Invoice 753) 4 Received payment of $4,000 from Torquay Surf Shop 4 Five cash customers paid for Introductory Surf lessons. The course commences on March 8. (invoice L433) 8 Paid Seahorse Publishers for February account. [chq 207] 9 Purchased inventory: 12 surfboards, 6 sailboards and 16 boogie boards. 10 Paid Wave Rider $8,960 [chq 208] 11 Sales Invoice sent to Sharkeys Wye River for the following items:6 surfboards, 5 sailboards, 6 boogie boards, 10 surfing manuals (invoice 704) 12 Cash sale to Point Hicks School for the following items: 5 students enrolled in an SL1 I Introductory course and 4 students in an SL3 Advanced course. (Invoice SL34) The course commences on 17 March. 12 Pay day. Carl was paid for 28 hours and Brian was paid for 22 hours; the payments included wages owing from February. [Chqs 209 & 210] 12 Purchased inventory: 12 sailboards and 12 surfing manuals 14 Received payment from Airey’s Surf Club for February account. 15 Credit sale to Aireys Surf Club: 10 surfboards, 6 sailboards, 10 boogie boards and 15 surfing manuals (Invoice 755) 16 Cash drawings – Cheque payable to Al Wilson of $2,000 [chq 211] 16 Paid cash for vehicle expenses – $220 (Including GST) [chq 212] 16 Purchased 12 boogie boards 18 Cash sales: Inventory sold: 3 s u r f b o a r d s , 2 s a ilb o a r d s a nd 5 s u r f in g m a n ua ls ( in v o ic e 7 56 ) 18 Purchased 10 surfing manuals 19 Paid Australian Taxation Office GST owing [chq 213] 21 Paid Custom Surfboards the balance owing on the account.[chq 214] 21 Returned 3 sailboards to Wave Rider. They were slightly damaged. A Credit Note was issued by the supplier. These items were from the purchase on 12 March 23 Purchased 12 surfboards and 15 surfing manuals 23 Paid monthly repayment to ANZ for bank loan; $550 (includes $50 interest). GST is not payable on this transaction. Fred decided that the business would pay an additional $2,500 off the loan principal. [chq 215] 23 Paid Telstra Ltd for business phone accounts - $572 (GST Inclusive) [chq 216] 25 Credit sale to Sharkeys Wye River: 5 surfboards, 4 sailboards and 9 boogie boards. (Invoice 757 Page 5 of 7 26 Pay day. Carl was paid for 30 hours and Brian was paid for 24 hours. [chqs 217 & 218] 27 10 cash customers paid in advance for a full SL1 Introductory course. 4 cash customers paid in advance for an SL2 Intermediate course. The course commences on 6 April. (Invoice SL35) 27 Received $12,267 from Sharkeys Wye River 27 A customer purchased 3 x surfboards for cash at a special price of $423.50 each (including GST). The customer also purchased 6 surfing manuals at the normal price. (Invoice 758) 28 Cash sale:2 boogie board (Invoice 759) 31 The ANZ Bank in Williamsville has sent a bank statement for the month of March 2015. The following items were noted from the bank statement. ï‚· The wages cheque to Brian on 26 March [chq 218] had not been presented to the bank. ï‚· Cheque received from Sharkeys Wye River on 27 March was dishonoured due to insufficient funds. ï‚· Bank fees of $15 were debited to the account on 30 March ï‚· A credit for an electronic transfer of $1,200 was received for sale of second-hand surfboards on commission. Adjustments at 31 March 2015 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 and adjustments for inventory are required. Physical stock-take as at 31 March 2015: ï‚· Surf boards 15 ï‚· Sailboards 10 ï‚· Boogie boards 12 ï‚· Surfing manuals 24 2. The shop fittings are to be depreciated using the straight line method, at 15% per annum on cost. The motor vehicle is to be depreciated using the straight line method at 20% per annum on cost. 3. Accrued wages: Carl – 8 hours, and Brian – 10 hours. Page 6 of 7 Required: Part A: manual recording 1. Record the opening balances as at 1 March 2015 in the appropriate accounts and the opening balances of accounts receivable, accounts payable and inventory in the appropriate subsidiary ledgers. 2. Record the transactions in the appropriate general or special journal for March 2015. Record and post all transactions from journals to the general ledger in accordance with accounting procedures. 3. Prepare schedules of accounts receivable, accounts payable and inventory as at 31 March 2015 and reconcile these with the control accounts in the general ledger. 4. Record end of month adjustments in the general journal and post these to the general ledger. 5. Prepare a Trial Balance after end of month adjustments as at 31 March 2015. 6. Prepare closing entries for March 2015 7. Prepare an Income Statement for March 2015 and a Balance Sheet as at 31 March 2015. 8. Prepare a Trial Balance after closing entries for March 2015 Pro-forma journals, ledgers, worksheets and reports are available in the assessment folder and must be used to submit part A. Part B Computerised accounts using MYOB 1. Set up a data file for Surf haven and process the transactions for March 2015. 2. The Easy Setup Assistant can be used for the initial setup process to: ï‚· Prepare the Chart of Accounts ï‚· Enter the opening balances in the general ledger ï‚· Setup customer and supplier cards and enter opening balances in the specialist modules ï‚· Record transactions and end of month adjustments for February 2015 The Command Centre can be used to create inventory items and enter opening balances 3. Record the transactions for March 2015 using the Sales, Purchases, Banking, Accounts and Inventory modules. 4. Record end of month adjustments. Note: End of period processing procedure must not be undertaken.