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ACCT11081 – Introductory Financial Accounting Ass – Step 9 Melissa Edwards Entering transactions into MYOB and creating a set of financial statements: I have created the following transactions for my form to enter into MYOB for the purpose of creating financial statements for the month of July 2017. I have created a little more than 10 as while I was doing this exercise I wanted to create a few more steps to make my transactions seem realistic. My transactions are as follows: 3 rd July 2017 Created an invoice for consultancy fees to Roy Hill Mine for the amount of $150,000 including GST. This was done as a quote and then converted to an invoice. 4 th July 2017 Purchased $100,000 including GST of dynamite from the company TNT Blasting for job required later in the month. Invoice remains unpaid at this stage. 7 th July 2017 Purchased 50 x dump truck tyres from Tyres R Us at the amount of $6,000 each including GST for stock. The invoice remains unpaid at this stage. Purchased truck parts to the value of $52,500 as follows from Ashdown Ingram for stock: 10 x dump truck gear box @ $5,000 each including GST 25 x dump truck fan belts @ $100 each including GST This invoice remains unpaid at this stage. 12 th July 2017 Invoiced Rio Tinto Iron Ore for consultancy services for the design of phase 1 of the roads to their mine site for $60mil including GST. 17 th July 2017 Invoiced Samsung C & T for consultancy services for the design of phase 1 for the construction of railway lines to their mine site for $15mil including GST. 21 st July 2017 Received dynamite from TNT Blasting and therefore changed the order to a bill 25 th July 2017 Invoiced Rio Tinto Iron Ore for blasting services and supplies at their Pilbara mine site as follows: Blasting services invoiced for $4mil including GST Use of dynamite for the blasting invoiced for $50,000 including GST
Transcript of ACCT11081 – Introductory Financial Accounting · Web viewACCT11081 – Introductory Financial...
ACCT11081 – Introductory Financial Accounting
Ass – Step 9
Melissa Edwards
Entering transactions into MYOB and creating a set of financial statements:
I have created the following transactions for my form to enter into MYOB for the purpose of creating financial statements for the month of July 2017. I have created a little more than 10 as while I was doing this exercise I wanted to create a few more steps to make my transactions seem realistic. My transactions are as follows:
3 rd July 2017 Created an invoice for consultancy fees to Roy Hill Mine for the amount of $150,000 including GST. This was done as a quote and then converted to an invoice.
4 th July 2017 Purchased $100,000 including GST of dynamite from the company TNT Blasting for job required later in the month. Invoice remains unpaid at this stage.
7 th July 2017 Purchased 50 x dump truck tyres from Tyres R Us at the amount of $6,000 each including GST for stock. The invoice remains unpaid at this stage.
Purchased truck parts to the value of $52,500 as follows from Ashdown Ingram for stock:10 x dump truck gear box @ $5,000 each including GST25 x dump truck fan belts @ $100 each including GSTThis invoice remains unpaid at this stage.
12 th July 2017 Invoiced Rio Tinto Iron Ore for consultancy services for the design of phase 1 of the roads to their mine site for $60mil including GST.
17 th July 2017 Invoiced Samsung C & T for consultancy services for the design of phase 1 for the construction of railway lines to their mine site for $15mil including GST.
21 st July 2017 Received dynamite from TNT Blasting and therefore changed the order to a bill
25 th July 2017 Invoiced Rio Tinto Iron Ore for blasting services and supplies at their Pilbara mine site as follows:Blasting services invoiced for $4mil including GSTUse of dynamite for the blasting invoiced for $50,000 including GST
26 th July 2017 Returned 500 sticks of dynamite totalling $500,000 to TNT Blasting as they were faulty.Paid $500,000 to TNT via bank deposits
28 th July 2017 Invoiced BMA for drilling services at their Goonyella Riverside Mine Site for $6mil including GST.
Received items from Tyres R Us and therefore changed the order to a bill
Received items from Ashdown Ingram and therefore changed the order to a bill
ACCT11081 – Introductory Financial Accounting
Ass – Step 9
Melissa Edwards
Invoiced Roy Hill Pty Ltd for the laying of phase 2 of drainage pipes at their Pilbara mine site for the amount of $2.7mil including GST.
Payment 31 st July 2017 received from Roy Hill Pty Ltd for the amount of $1mil.
Financial Statements
ACCT11081 – Introductory Financial Accounting
Ass – Step 9
Melissa Edwards
After completing these transactions in MYOB, I have been able to create the following Financial Statements.
Income Statement
Balance Sheet
Cash Flow Statement
ACCT11081 – Introductory Financial Accounting
Ass – Step 9
Melissa Edwards
All Journals Report
ACCT11081 – Introductory Financial Accounting
Ass – Step 9
Melissa Edwards
I found the task of creating these reports quite easy so I did not need to interact with fellow students to be able to generate these. I did however have difficulties with initially downloading the software and even though I found out how to fix it myself, there were heaps of comments on Facebook from students who tried to assist me with this task, as follows:
Martin Turner posted my question:
ACCT11081 – Introductory Financial Accounting
Ass – Step 9
Melissa Edwards
Students responded:
My question:
ACCT11081 – Introductory Financial Accounting
Ass – Step 9
Melissa Edwards
Responses:
Interpreting my financial statements:
Looking at the income statement for the month of July, my company doesn’t seem to be doing so well as it made a loss of $11mil. The total income for the month was $79mil but I have entered some inventories as an expense for $90mil. I am fairly certain that I have entered this into MYOB incorrectly thought because these inventories should have been entered as an asset. I did try to go in and change this item (which was dynamite for a job) to an inventory account, but I kept getting an error message to say that there was already an order for this item. I checked the securities tab in the account settings and the restriction to not allow invoices to be changed was not ticked, but I was still not able to change this item. I’m sure that as I use MYOB more and more these difficulties will become easier to resolve. However, if I had not entered this incorrectly, then my company would be making quite a healthy profit.
Looking at the balance sheet, the total equity of the company doesn’t look too bad, considering it’s at $144.7mil. However, when I look at the opening balance of my accounts, it has decreased quite significantly. Again, if I was analysing these statement I would probably ask why the trade creditors was so high. But I already know that answer and it was due to my error.
The cash flow statement tells the same story as the other reports. After all my high end transactions for my company, I have only increased the cash at the bank by $500,000. And this is once again due to the inventory entered as an expense and not an asset. Had the inventory been entered the correct way the cash at the bank at the end of the period would have been greater and a proper reflection of how my business was performing.
I have thought to myself and wondered if I should go back and try to change this again or correct it in an adjusting transaction, but I have decided not to because I think this is a learning curve for me because I have realised my error and can see how this is reflected in my financial statements in a negative way. So I have left it as is and will learn from this for future entries.
The all journals report I found the most interesting. This is where I realised the true extent of my error and why it has created sucj a mess with my financial statements. My purchase for dynamite was supposed to be for $100,000 but I have entered this in for $100mil. So this is the reason why my company has made no money. Because they are sitting with $100mil worth of dynamite for blasting jobs when only $100,000 was required initially and only $50,000 was used. I would say that in my entries I have made quite an error with recording/data entry and if I was the CFO or CEO of this company I would be asking for a please explain.
ACCT11081 – Introductory Financial Accounting
Ass – Step 9
Melissa Edwards
I had a look at the ratios for my net profit margins, and as expected they are extremely low. I have calculated these as follows:
Netprofit after taxSales =
−11,032,727.2079,863,636.37 = -0.13%
The return on assets is also extremely low, therefore my company is not using it’s assets to the best of their abilities as far as the figures are showing. Which is reflected as follows:
Net profit after taxtotalassets =
−11,032,727.20243,193,272.73 = -0.045%
