Set up a New Company File in a Computer Accounting Program
Set up a new company file using the current financial year with 12 reporting periods.
Call the Company Jerry’s Hardware Pty Ltd.
ABN: 11 123 456 789
NOTE: Create a separate folder on your computer/flash drive and make sure you save your data file to the folder you have set up otherwise you may have trouble locating your data file.
In the set-up options you may be able to use an accounts list from an appropriate industry sample i.e. in MYOB you could set the accounts list up using the “Retail” industry Classification and choosing “Hardware Store” as the business type.
Accounts List Set-up and Opening General Ledger Balances
Set up the general ledger trial balance with the following assets and liability opening balances:
Editing the Accounts List
Even if you have chosen an industry accounts list you may want to edit some of the account names. For example, you only need one Sales account. Give it a name/title like “Garden Sales” and you can delete any other Sales Accounts. You only need one Cost of Goods Sold (COGS) account. If your chart of accounts/accounts list has a “Purchases” account rename it “COGS” and delete any extra accounts in the Cost of Sales area that are not needed. If using MYOB rename the “Merchandising Inventory” account to “Inventory”.
Set-Up Inventory Items
Set-up inventory for one (1) item.
The item is to be bought, sold and inventoried.
Use an appropriate product code & name that your software accepts and that is appropriate to the inventory item which for this example is Garden Rakes.
Product Code: GR01
Item Name: Garden Rakes
Enter the opening inventory balance as shown below in the month’s transaction ie. The opening inventory comprises 350 Garden Rakes (Cost Price $15 excluding GST).
NOTE: Don’t forget to date this transaction 1 July CY (Current Year).
Set up a Supplier and Customer Card
You only have one (1) supplier and one (1) customer.
All purchases and purchase returns are on credit terms with the supplier “Bennings”.
All sales and sales returns are on credit terms with the customer “Green Finger Supplies”.
Set up one (1) supplier Card for: Bennings Ltd, ABN: 11 222 333 444. On the Buying details tab select a Purchase Layout option of “item” so that when this supplier’s card is used for a purchase an item invoice layout automatically is displayed. Make up a shipping address for this supplier. Tax Code Applicable to this supplier is “GST” – record this on the Buying Details Tab of the Card in MYOB (or your chosen software package).
Set up one customer (1) Card for: Green Finger Supplies. On the Selling details tab select a Sales Layout option of “item” so that when this customer’s card is used for a sale an item invoice layout automatically is displayed. Make up a shipping address for this customer. Tax Code Applicable to this customer is “GST” – record this on the Selling Details Tab of the Card in MYOB (or your chosen software package).
High recommended you save a copy or backup of this file prior to processing the transactions. If any of the transactions are entered out of order using the wrong date your average inventory values will be corrupted and you will need to start back at the point you have saved this back-up to get the correct answer at the end. Computer accounting programs apply the weighted average method of inventory valuation. Inventory unit costs are re-weighted & re-calculated after each new purchase. Always keep checking you have the correct date prior to recording the transaction as computer programs have a habit of defaulting in many instances to the current day’s date.
Jerry’s Hardware Pty Ltd – Inventory transactions for the month of July.
Note: you should already have entered the opening stock balance as per the instructions above. The unit cost and selling prices in the table below are GST exclusive, however GST is applicable to Garden Rakes.
Ensure each time you record a sale or purchase if you are using the figures in the table below the tax inclusive box is not selected as the figure below are GST exclusive. The computer program will then know to add 10% GST onto the invoice.
Date Transaction Qty Unit Cost Price
GST exclusive Unit Sales Price
1 Jul Opening balance 350 $15.00
4 Jul Purchase 350 $14.00
8 Jul Sale 300 $18.00
11 Jul Purchase return (from 4 Jul) 35
18 Jul Sale 200 $18.00
20 Jul Sale return (from 18 Jul) 20
25 Jul Purchase 190 $13.50
31 Jul Stock on hand 360
Record the above inventory transactions for purchases, purchase returns, sales and sales returns i.e. the transactions (dated 4 July through to 25 July).
A stocktake count was performed at the end of the month on 31 July. There were 360 rakes on hand as indicated in the table above. Record separately the stocktake count in the part of your software that allows you to record the inventory count for each item of inventory. In MYOB for example, this is in the Inventory Command Centre under “Count Inventory”. Set the COGS account up as the default account for the inventory adjustment.
Reports to be printed – be careful to tailor the dates of reports so they only cover the period to 31 July.Please send me PDF file and another file that I can change the detail.
At 31 July print the following reports:
• Items List Summary
• A report showing all journals for the month of July
• An accounts receivable report
• accounts payable ageing report
• An Accounts List Detail Report (MYOB) or Trial balance at 31 July excluding zero balances
• A transaction history for the Inventory Ledger account from 1 July to 31 July
• An accounts Transaction Accrual Inventory
• Please send me a file that I can open in MYOB Programme though e-mail.