Highway Heaven-s1-2020 (3).docx - ACC10008 Financial...

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ACC10008 Financial Accounting Systems AssignmentSemester 1, 2020Case Study – Highway HeavenGeneral informationThis case study requires you to use double entry manual recording and computer accounting software (XERO) for a small business to record transactions for April 2020. It covers many of the common transactions of everyday business, including GST. Specific informationHighway Heaven (ABN 65 111 177 778) is owned and operated by Michael Harley. He buys motorcycles from importers and sells them in Melbourne. His shop is at 888 Sydney Road, Glenville, 3056.All sales of motor cycles are on credit, unless otherwise stated; customers are required to pay cash for riding lessons. Purchases of motor cycles are on credit and operating expensesare paid in cash.The business charges GST on all inventory sales and riding lessons, and pays GST on inventory purchases and most business expenses.Goods and Services TaxHighway Heaven charges GST of 10% on all sales pays GST on all business expenses, except wages. Non-current asset acquisitions are also taxed at GST of 10%.EmployeesMichael has two employees, Dirk Davidson and Mae Scooter who are both paid $25 per hour. Wages owing to Dirk and Mai at 31 March is $200 each.Note: Highway Heaven does not use XERO payroll.Page 1 of 7
InventoryThe following is a list of closing inventory and the suppliers at 31 March 2020:QuantityOn handItemCodeDescriptionCostpriceSalePriceSupplier20BHHBig Head helmet$20$60Hit the Road15RRRoad Runner$1,650$5,280Best Bikes8CCCoast Cruiser$2,200$6,490Best BikesEach of the above items of inventory are quoted excludingGST.Inventory orders are delivered to Highway Heaven the same day the order is made to the supplier.Highway Heaven maintains inventory records for all inventory items.LessonsCustomers are charged $90 (excluding GST) per hour for riding lessons. All lessons are paidfor in cash at the time of the lesson. Lessons revenue is recorded separately from the sale of inventory.Supplier informationSupplier balances at 31 March 2020 are:NameAddressABNAccount balanceHit the Road181 Bend Boulevard,Bankstown, 311155 222 288 889$1,200Best Bikes99 Hill StreetSpokesville, 322227 222 266 667$3560Each of the above account balances represents deliveries of inventories received on 15 March 2020. All purchases are on terms net 30 days.Customer informationCustomer balances at 31 March 2020 are:NameAddressABNLast invoicedateAccountbalanceFree Wheelers22 Downhill Drive,Skyway, 34448411112222310 March$3,780Kamikaze Couriers10 Lost Lane,Somerton, 399916 111 199 99026 March$5,900Terms of payment for customers is 2/15, net 30 days.

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