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ACCOUNTING WITH QUICKBOOKS 2007/08
GEORGINA’S GORGEOUS GEMS
Georgina’s Gorgeous Gems is a small business selling high quality jewellery, located
at 21 Broadway, Fig Tree Pocket. The business is run by Georgina Quilter, who
financed it from personal savings and a loan from the Venture Bank.
The business has 3 stock lines: ruby bracelets, diamond rings and pearl necklaces. All
sales and purchases are made on credit. The business has been running since 31
October 2005. At 1 August 2007, the trial balance was as follows:
GEORGINA’S GORGEOUS GEMS
Trial balance at 1 August 2007
Debit Credit
ABC Bank 17620.00
Accounts Receivable 106700.00
Stock 102500.00
Delivery Van: Original Cost 45000.00
Accumulated Depreciation 16000.00
Accounts Payable 63704.00
Tax Payable 9240.00
Loan – Venture Bank 90000.00
Capital 19236.00
Drawings 10000.00
Sales 135000.00
Cost of Goods Sold 67500.00
Electricity 800.00
Motor Expenses 800.00
Interest paid 2000.00
Rent 3000.00
Telephone 500.00
Wages 12000.00
$350800.00 $350800.00
The accounts receivable were:
M K Pearce 47300
L P Cohan 33000
P S Squires 19800
N N Arnup 6600
$106700
Task created by Suzanne Collings, Education Consultant 1
The accounts payable were:
Broughton Imports 51824
Tonkin Supplies 11880
$63704
The stock take at 31 July showed:
No on Cost Total Selling
Hand Value Price
Ruby bracelet 4 7500 30000 15000
Diamond ring 10 5000 50000 10000
Pearl necklace 15 1500 22500 3000
$102500
The bank statement at 31 July 2007 was as follows:
ABC Bank
Account Name: GEORGINA’S GORGEOUS GEMS
Date: 31 July 2007
Date Details Debit Credit Balance
1 July Balance 26210 Dr
1235 5000 31210 Dr
1236 6000 37210 Dr
5 1237 1000 38210 Dr
14 1238 20000 58210 Dr
14 Cash/Chqs 16500 41710 Dr
Cash/Chqs 22000 19710 Dr
15 Account fee 15 19725 Dr
16 1239 5000 24725 Dr
1240 6000 30725 Dr
18 Cash/Chqs 22000 8725 Dr
24 Cash/Chqs 9900 1175 Cr
27 Cash/Chqs 16200 17375 Cr
28 1242 11000 6375 Cr
31 1243 25000 18625 Dr
Transactions
A new stock line is to be introduced on 1 August 2007:
Emerald ring: cost $7000 (plus GST), selling price $14000 (plus GST).
Task created by Suzanne Collings, Education Consultant 2
Purchases (Suppliers, Receive items and enter bill):
Purchased 5 emerald rings from Broughton Imports on 3 August $38500
Sales (Customers, Create invoices):
5 August Sold 2 ruby bracelets to N Williams on credit, invoice 1071, $30000
(plus GST)
29 August Sold 3 diamond rings and 1 ruby bracelet to P S Squires on credit,
invoice 1072, $45000 (plus GST)
Collections from Debtors (Customers, Receive Payments):
7 August M K Pearce paid amount owing at 31 July Rec 465
29 August P S Squires paid amount owing at 31 July Rec 466
Cheque payments (Banking, Write Cheques):
1247 2 Aug Paid motor expenses $245 (plus GST) to Ampol Service Station
1248 Paid for stationery supplies, Normans $230 (plus GST)
1249 15 Aug Paid wages $6000
1250 Drew cash for own use $5000
1251 31 Aug Paid creditor Broughton Imports $40000
1252 Paid ATO the amount owing for GST at 31 August $9247
Balance Day Adjustments (Company, Make General Journal Entry):
1. Depreciate delivery van for 2 months ($840 per month)
2. Advertising account outstanding at 31 August. $5000
NOTES
Goods and Services Tax (GST)
1 It is advisable to edit the Tax codes (through Lists, Tax Codes, List) to reduce
the number of codes available and to reduce the opportunity for confusion for
the students.
2 Use the code NCG 10% for ALL inputs which attract GST, including
purchases of trading stock. Use the code GST 10% for all sales revenues.
3 Pay tax liabilities through Suppliers, Pay Tax Liability, assigning the next
number for the appropriate bank account.
4 The GST component of all purchases and sales has already been set up so it is
not necessary to adjust the invoices for the tax payable or collectable.
QuickBooks will automatically adjust the Tax Payable account for all
purchases and sales.
5 It is necessary to add the tax code (NCG 10%) into the TAX column for all
cheque payments which attract GST. The amount entered into the amount
field for the cheque must include the amount of the tax. QuickBooks will then
calculate the amount of the tax and show it in the appropriate column. This
will automatically adjust the Tax Payable Account.
Task created by Suzanne Collings, Education Consultant 3
6 If the amount of GST paid out by the business is greater than the amount
collected from customers, the balance of the Tax Payable account will show a
negative amount, it will still be listed as a Current Liability.
Bank Reconciliation
1 On the Menu bar, select Banking, Reconcile. Enter the final bank balance
from the bank statement provided.
2 Enter the bank fees through Write Cheques. Enter BS instead of a cheque
number. You will need to open an account for Bank Charges.
3 On the reconciliation screen, enter a tick beside each item which appears on
the bank statement. As you tick off the items, the Difference at the bottom
right of the screen will change to Zero as the account is reconciled.
Transactions
Enter the transactions in batches, being careful with the dates.
Decision Centre
On the Company navigator, click on Company Centre to access a wide range of
assessment tools. As this data file is using current dates, this will show small graphs
of the current situation.
Use Reports, Customers & Receivables, Accounts Receivable Graph as a basis for
discussion on the state of the bank account and the amount owed by customers
(especially in the 90+ days column)
Check the graphs for Accounts payable and income and expense. Note that %’s are
shown for each area of the graph. Double click on any area of a graph and it will
show more information. Further double clicking will take you right back to the
document which generated the transaction.
Task created by Suzanne Collings, Education Consultant 4
