Injecting Capital Fund by cash

From the previous example, it is shown that the initial capital injection was made by simply recording journal of term loan and equity transfers to bank saving, to be then spent for purchasing fixed assets. The bank balance then is:
Electronic Clearing Account ($ 75,000)
KiwiBank Saving Account $ 100,000
Bank balance $ 25,000

The owner is now thinking to add some more fund to the bank account by cash. However, he wants to consider that his fund injection is to be recorded as a banking receipt to the company.

To record this:
go to Banking > Receive Money


Then fill in the form like this:


Some notes to this form:
1. Deposit to account: KiwiBank Saving
2. The payor is Jeffry Liando as personal
3. Account is for KBF equity as to be injected as capital

The transaction journal is similar with the previous direct method (recording journal):


The updated balance sheet as of Jan 2007:

Balance Sheet Report

To see the balance sheet report as of Dec 2006:
go to Report (bottom menu) > Accounts
choose Standard Balance Sheet > click Customise
and choose the period of December


And the report will be like this after clicking Display:

Initial Capital Investment

As every business must start with an initial capital investment, KBF builds its plant and office with own equity and bank loans. KBF's equity and loan from bank may first deposit or transfer to savings before being spent for capital expenditures.

To do this, the simple way is to create journal directly:
go to command centre > accounts list

There some new accounts we want to create here:
1. KBF equity
2. KiwiBank Term Loans
3. KiwiBank Savings
For KBF equity, go to equity > press new

Fill in the form something like this:

Same process for KiwiBank Term Loans with account type: liability and KiwiBank Savings with account type: asset.

Then, just record the journals as KBF's equity and loan from bank being transfered or deposited to savings. Go to record journal entry.
Equity

Loan

From here, KBF can establish the biofuel plant and buying office equipment and vehicles. Go to purchase > enter purchases. Please use GST tax code - Standard (S) with 12.5% GST. Then pay or close all open bill with electronic clearing account.

Finally, by checking the account list (go to accounts > accounst list), it can be found the balance sheet position something like this.

How about the inventory and production? Does KBF need more funding to start production? Stay tuned.

It's better to build your own accounts

Start with creating a new company file:

Then, follow the instructions until the accounts list menu. In this menu, it is recommended to build your own accounts list as you might need some flexible adjustments when recoding journals.

Kiwi Biofuel Ltd

Kiwi Biofuel (KBF) Ltd is a fictional manufacturing company used in this MYOB simulation. KBF produces liquid biofuel from kiwi fruits. With $100,000 assets raised from $50,000 equity and $50 loan, KBF's production capacity is 1,000 litre per day or 300,000 litre per year. It employs 2 labours, 1 engineer and 1 office assistant.

To produce 100 litre, it needs:
5 tray kiwi fruits @$6.00 per tray
2 hours labours @$12.50 per hour
50 kWh electricity @$0.10 per kWh
Total = $60 per 100 litre

Selling price = $1.00 per litre

One year budget:

• Sales = $300,000
• Cost of sales = $180,000
• Advertising = $10,000
• Salaries = $60,000
• Office = $10,000
• Maintenance = $ 10,000
• Other expenses = $10,000
• Operating profit = $20,000
• Tax = $6,600
• OPAT = $13,400
• ROA = 13.40%
• ROE = 26.80%