ACCOUNTING WITH QUICKBOOKS
Sensational Sports is a small business selling sporting goods, located at 21 Main
Street, Main Beach. The business is run by Bob Main, who financed it from personal
savings and a loan from the Merchant Bank.
The business has 3 stock lines: tennis racquets, sports shoes and skis. All sales and
purchases are made on credit. The business has been running since 31 October 2005.
At 1 January 2006, the trial balance was as follows:
Trial balance at 1 January 2006
ABC Bank 8197.00
Accounts Receivable 32582.00
Delivery Van: Original Cost 56000.00
Accumulated Depreciation 22150.00
Accounts Payable 5060.00
Tax Payable 3524.18
Loan – Merchant Bank 35000
Cost of Goods Sold 15030.00
Depreciation of Delivery Van 3150.00
Interest paid 800.00
The accounts receivable were:
Alexander’s Sports Centre 3938
Connor Coordinates 1936
Fit For Living 2420
McMahon Training 4048
Mt Hotham Sports 13200
Newtown High School 7040
Task created by Suzanne Collings, Education Consultant 1
The accounts payable were:
The stock take at 31 December showed:
No on Cost Total Selling
Hand Value Price
Tennis racquets 14 160 2240 320
Pro Runners 23 110 2530 220
Skis 7 2000 14000 4000
The bank statement at 31 December 2005 was as follows:
Account Name: Sensational Sports Date: 31 December 2005
Date Details Debit Credit Balance
Nov 1 Balance 15294 Cr
16 7789 2640 12654 Cr
7790 2000 10654 Cr
Cash/Chqs 5300 15954 Cr
20 7791 800 15154 Cr
Account fee 15 15139 Cr
26 7792 8500 6639 Cr
30 Cash/Chqs 7210 13849 Cr
Dec 8 7794 2640 11209 Cr
9 7793 4195 7014 Cr
15 7795 2300 4714 Cr
20 Account fee 15 4699 Cr
23 7797 2700 1999 Cr
30 Cash/Chqs 484 2483 Cr
7798 7220 4737 Dr
A new stock line is to be introduced on January 1 2006:
Hockey stick – cost $75 (plus GST), selling price $150 (plus GST).
Purchases (Suppliers, Receive items and enter bill):
9 January Purchase 20 hockey sticks from Grey Nicholls. $1500 (plus GST)
13 February Purchase 20 tennis racquets from Dunlop $3200 (plus GST)
Task created by Suzanne Collings, Education Consultant 2
Sales (Customers, Create invoices):
15 January Sold 6 hockey sticks to Kew Hockey Club, invoice 4473 $900 (plus
25 January Sold 4 pair skis to Blue Cow Resort, invoice 4474, $16000 (plus GST)
18 February Sold 20 pairs of Pro Walkers to McMahon Training, invoice 4475
$4400 (plus GST)
20 March Sold 2 pair skis and 10 tennis racquets to Outdoor Adventures, invoice
4476, $11200 (plus GST)
Collections from Debtors (Customers, Receive Payments):
6 January Alexanders Sports Centre $3938
30 January Connor Coordinates $1936
28 February Mc Mahon Training $4048
13 March Newtown High School $7040
Cheque payments (Banking, Write Cheques):
7801 31 Jan Cash for wages $2100
7802 Motor vehicle expenses to Mobil Service Station $1720 (plus GST)
7803 Payment to creditor Puma $2640
7804 28 Feb Cash for wages $2200
7805 Payment to creditor Rockpool $2420
7806 31 Mar Advertising to Syd Patterson $6000 (plus GST)
7807 Quarterly loan payment $5000 to Merchant Bank, plus $800 interest
7808 Payment for 6 months rent to Woodards $14400 (plus GST)
7809 Drew cash for own use $2000
7810 Payment of GST to ATO for tax owning at end of March quarter.
Balance Day Adjustments (Company, Make General Journal Entry):
1 Rent paid on 31 March was 3 months in arrears and 3 months in advance
2 Advertising paid on 31 March was for March, April and May
3 Wages were accrued at 31 March $2400
4 Depreciation for the quarter ended 31 March is to be charged – 22.5% per
annum, straight line method.
Task created by Suzanne Collings, Education Consultant 3
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
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.
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.
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.
Enter the transactions in batches, being careful with the dates.
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
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