The owner, Adeline Ridley, has worked in the fitness industry for many years, purchasingthisSevenDaysFitnessbusinessin2018. The business operates from a rented shop front where she has a five-year rental agreement at a set price of $1,760 per calendar month (including GST). Rent is usually paid on the first of each month for the relevant month.

Seven Days Fitness has two income streams – selling two popular products – Rowing machines and Exercise bikes and secondly providing fitness training for groups. Seven Days Fitness’s principal customers for inventory sales are medium-sized organizations who have office-based gyms but from time to time, the business also sells to the public.

Seven Days Fitness has operated the business using a manual accounting system since purchasing the business in 2018. As Seven Days Fitness’s accountant, you recommend the business convert from a manual recording system to a computerized accounting recording system using MYOB from August 2020.

All purchases of inventory are from local suppliers who supply inventory to Seven Days Fitness free of delivery charge.

Specific Information:

SevenDays Fitness purchases all its inventory on credit and sells inventory on credit to her business customers. From time to time, she sells inventory for cash to the public, and all fitness classes are also strictly on a cash basis.

Customer account balances as at: July 31st, 2020

    

Name	Address	Date of Last Invoice	Account Balance
Offline Education Organization	542 City Road, Melbourne ABN - 50 999 555 666	July 25th	$5,610
Village Fair	601 Suburb Street, South Melbourne ABN - 92 555 888 111	July 29th	$6,765

All credit customers are offered the following terms: 2.5%/ 15 days, net 30.

Suppliers account balances as at: July 31st, 2020

Name	Address	Terms	Account Balance
Rower Gears Ltd.	1 Scull Street, Brunswick ABN - 50 596 794 363	3%/ 15 days, net 30.	$5,505
Cycle Bazaar	14 Gove Street, Northcote ABN - 20 888 560 222	2%/ 15 days, net 30.	$3,834

Each of the above account balances for suppliers represents deliveries of inventory received on July 27th.

1. establish a chart of accounts, record supplier and customer balances, enter inventory balances and record opening ledger account balances
2. Record the transactions and adjusting entries using the correct module for the month ending 30th August 2020.
3. Trial Balance as at 31st July 2020 (after recording the opening balances).Produce with ledger account numbers.
4. Trial Balance as at 31st August 2020 (after all adjustments). Include ledger account numbers within the trial balance.
5. The Income Statement for the month ended 31st August 2020.
6. Balance Sheet as at 31st August 2020.

Answer rating: 100% (QA)

Answer 1 Establish a Chart of Accounts The chart of accounts is a set of accounts that organizations use to record their financial transactions and track their financial performance The chart of accou... View the full answer