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Term and Year 3, 2022 Time allowed 7 Weeks

Assessment No 2 Assessment Weighting 60%

Assessment Type Project Assignment

Due Date Week No. 7 Room Zoom

Details of Subject

Qualification BSB50420Diploma of Leadership and Management

Subject Name Finance

Details of Unit(s) of competency

Unit Code (s) and Names BSBFIN501 Manage budgets and financial plans

Details of Student

Student Name College AAI (BRISBANE) Student ID Student Declaration: I declare that the work submitted is my own and has not been copied or plagiarised from any person or source. I acknowledge that I understand the requirements to complete the assessment tasks. I am also aware of my right to appeal. The feedback session schedule and reassessment procedure were explained to me. Students

Signature: ____________________

Date: _____/_____/_________

Details of Assessor

Assessors Name Ali Kauser

Assessment Outcome

Assessment Result FORMCHECKBOX Competent FORMCHECKBOX Not Yet Competent Marks / 60

Feedback to Student

Progressive feedback to students, identifying gaps in competency and comments on positive improvements:

Assessor Declaration: I declare that I have conducted a fair, valid, reliable and flexible assessment with this student.

FORMCHECKBOX Student attended the feedback session.

FORMCHECKBOX Student did not attend the feedback session. Assessors

Signature: ___________________

Date: _____/_____/________

Purpose of the Assessment

The purpose of this assessment is to assess the student in the following learning outcomes: Competent (C) Not Yet Competent (NYC)

1.1 Access budget/financial plans for the work team 1.2 Evaluate budget and financial plan outcomes with required organisational personnel 1.3 Negotiate any changes required to be made to budget/financial plans with relevant personnel within the organisation 1.4 Prepare contingency plans in the event that initial plans need to be varied 2.1 Communicate details of agreed budget and financial plans to relevant team members 2.2 Support team members to access resources and systems to perform required roles 2.3 Implement processes to monitor actual expenditure, control costs and modify contingency plans as required according to financial objectives 2.4 Report on budget and expenditure according to organisational protocols 3.1 Collect information on effectiveness of financial management processes within work team 3.2 Analyse variance between actual and budgeted finances 3.3 Identify and recommend improvements to existing financial management processes 3.4 Implement agreed improvements according to financial objectives of work team and organisation 3.5 Evaluate agreed improvements Assessment/evidence gathering conditions

Each assessment component is recorded as either Satisfactory (S) or Not Satisfactory (NS). A student can only achieve competence when all assessment components listed under Purpose of the assessment section are Satisfactory. Your trainer will give you feedback after the completion of each assessment. A student who is assessed as NS (Not Satisfactory) is eligible for re-assessment.

Resources required for this Assessment

Upon completion, submit the assessment to your trainer along with assessment coversheet

Refer to the subject notes on E-Learning prior to responding to the tasks/questions

Any additional material will be provided by Trainer

Instructions for Students

Please read the following instructions carefully

This assessment has to be completed FORMCHECKBOX In class FORMCHECKBOX At home

The assessment is to be completed according to the instructions given by your assessor.

Feedback on each task will be provided to enable you to determine how your work could be improved. You will be provided with feedback on your work within 2 weeks of the assessment due date. All other feedbacks will be provided by the end of the term.

Should you not answer the questions correctly, you will be given feedback on the results and your gaps in knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be deemed competent for this unit of competency.

If you are not sure about any aspects of this assessment, please ask for clarification from assessor.

Please refer to the College re-assessment and re-sit policy for more information.

INSTRUCTIONS:

This is a project assignment and you are required to complete this assignment by week 8. This assessment includes case scenarios with analytical tasks that require calculations, decision making and responses. Marking allocations and marking table at the end of this assessment document.

CONTEXT & SCENARIO

You (acting as Peter) have recently joined as a general manager at Metropolitan INC. (a diversified organisation) that operates various small business branches across Sydney. As the general manager, who not only looks after the overall operation of the business but also attends meetings with the directors and investors when proposing any changes and expansion of the business. You will act as Peter (General Manager) to progressively completing the organisational tasks one after another within the simulated environment for the various other businesses owned by Metropolitan INC. Your trainer will be one of the important stakeholders for your work and will act as the Director of Operations. Your trainer will advise you and approve your financial plans and relevant plans that you will prepare for the various businesses of the organisation.

Task 1: Cash Flow Statement for Metropolitan Furniture

Metropolitan furniture is one of the big operations for the company but registered as a small business. Peter has asked to prepare a proposed budget for the forthcoming quarter. He consults with the sales manager and finds that:

Estimated sales are as follows:

February $265,000 April $290,000

March $255,000 May $250,000

June $280,000

In consultation with the production manager he estimates that the cost of goods sold is to be budgeted at 45% of the sales figure. The salaries are expected to be $65,000 per month. When sales exceed $260,000 in any one month, the sales team is entitled to an additional 5% commission on the excess sales over this figure. Other expenses are estimated to be $35,000 per month.

The owner of the organisation is concerned about the cash flow which was not thought of before. The owner is of the opinion that the collection of cash from sales is slow and this could possibly lead to cash flow problems to the organisation. As Peter has never forecasted cash flow before he sets about collecting information on this.

Peter estimates that 80% of the total sales are going to be cash sales where the bill is settled when the goods are purchased or delivered. 10% of the months sales settle the accounts owed in the month following sales. Others (i.e. 10% of the months sales) settle in the month after.

Additional information for Cash Flow Statement:

The organisation gets a months credit on its purchases. That is, the accounts for the purchases (COGS) made in one month is settled in the following month.

All salaries are paid in the month as they are incurred.

The additional commission is paid in the month after the month in which it was earned.

Other expenses are paid in the month they were incurred.

The bank balance at the beginning of the first month is estimated to be $40,000.

Show the profit and loss calculations for the April, May and June

Show the cash flow projection calculations for April, May and June

Will the business have adequate financial provision to pay tax? Why? Visit the ATO website (www.ato.gov.au) and find out what is the tax rate (%) they will have to pay

If the cash flow statement and the P & L are productive, then what are the relevant people Peter needs to communicate if he establishes a business plan? How can Peter ensure that documented outcomes are achievable, accurate and comprehensible?

If the P & L showing good profit trend and the forecasted cash flow statement returns positive results, then marketing and operational departments may tend to expand their budget and therefore the business may have cash shortage in future. Does Peter require a contingency plan?

Answer (1): (2.5 marks)

Profit and Loss calculations

April May June

$ $ $

Sales Less Cost of Goods Sold Gross Profit Sales Salaries Commission Other expenses Total expenses Net Profit Answer (2): (2.5 marks)

Cash flow projections

April May June

$ $ $

Opening Cash Plus cash in: This month From last month From two months ago Total Cash available Less cash out:

Salaries Commission other expenses Stock Total cash out Closing cash balance Answer (3): (4 marks)

___________________________________________________________________

__________________________________________________________________

Answer (4): (4 marks)

__________________________________________________________________________

Answer (5): (4 marks)

__________________________________________________________________________

Task 2: Report Financial Activities

As part of your job (acting as Peter) job is required to report and advise the owner about daily financial positions and activities (income and revenue control, contingency plan) for the company. Based on the above financial analysis calculation that you have prepared in the previous section, please prepare an email communication below on how Peter can advise the owner. (5 marks)

Email Communication

<Date>

Subject:

To:

Dear Director/Owner,

Task 3: Create Action Plan

Jenny, John, Adam and George are part of your team. Based on the scenario of Task 1 you are required to monitor financial performance (achieve forecasted sales, monitor costs on an agreed cyclical basis to identify cost variations and expenditure overruns) on a continuous. List the Key performance indicators that can be relevant for this task and create an action plan in the table below in order to provide support to ensure how team members can competently perform required roles: (6 marks)

Job Title Suggested Support for achieving goals (e.g give access to resources and systems, disseminate relevant details of the agreed budget/plans, sales coach, contingency plan) Determine and access resources and systems to manage financial management processes within the work team Time frame Key Performance Indicators (e.g. monitor expected and actual sales and expenditure, identify cost variation and expenditure overruns etc)

Jenny (Sales Officer) John (Accounts receivable officer) Adam (Accounts payable officer) George (Payroll officer) Analyse data and information on the above processes in reference to Task 1 within the work team and identify, document and recommend any improvements to existing processes: (2 marks)

Task 4: Preparation of Cash Flow Statement(8 mark)

Metropolitan shoe manufacturing company is another small business of the Metropolitan INC. and currently is in a competitive position in the market and is trading in Western Sydney. Peter requested to see the cash flow operations. Calculate the total cash inflows and cash outflows for this company and the net cash position at the end of December from the following information:

Use the space provided and show all line items.

December 2012

Particulars Amount $

Cash receipts from customers 245,000

Cash paid to suppliers and employees 101,570

Interest paid 24,120

Income tax paid 25,910

Purchase of Subsidiary X, net of cash acquired 450000

Purchase of property, plant and equipment 350,100

Proceeds from sale of equipment 120,000

Interest received 22,550

Dividends received 25,654

Proceeds from issue of share capital 250,000

Proceeds from long-term borrowings 250,000

Payment of finance lease liabilities 50,000

Dividends paid 25,700

Cash and cash equivalents at beginning of period 530,750

Additional Instructions:

Regular inflow and outflow is recorded under operating activities

Cash inflow and outflow related to non-current assets are recorded under investment activities

Cash inflow and outflow related to interest bearing transactions are recorded under financing activities.

For each section add the inflows and then deduct the outflow.

Operating activities: $ Net Cash flow

Investment activities: Financing activities: Total Cash surplus/deficit Cash and cash equivalent at the beginning of the year Cash and cash equivalent at the end of the year Task 5: Change Analysis and Decision Making

Does the above cash flow statement show a positive /negative position on the end of December? Do you (acting as Peter) require negotiating any immediate changes with relevant personnel for a better outcome? If so, justify your answer: (5 marks)

__________________________________________________________________________

_________________________________________________________________________

__________________________________________________________________________

Task 6: GST and Cash Flow Statement (6 marks)

Metropolitan Flower Shop is also managed by you (acting as Peter) that operate in North Sydney. Peter is forecasting the transactions during the next financial year will affect its cash flow. (All ATO dues and ATO credits are expected to be settled during the year)

Cash sales, 10% GST not included

Credit sales for year, including 10% GST

Cash receipts in respect of credit sales budget year

Cash receipts in respect of credit sales previous year

Cash purchases, 10% GST not included

GST payable to ATO

GST input credit from ATO

Wages

Other payments, including 10% GST 90 000

186 000

150 000

11 000

80 000

10 000

20 000

110 000

44 000

Prepare a budgeted cash flow statement assuming that the opening bank balance was $30,200.

Workings:

Cash Receipts: $ $

Cash sales GST receipts on cash sales Credit sales - budget year Credit sales - previous year Total Cash receipts Cash Payments: Purchases GST payments on cash purchases Wages Net GST payable to ATO Other payments Total Cash Payments: Cash surplus/(deficit) Opening bank balance Closing bank balance

Task 7: Cash Flow Outcome Analysis

Do you (acting as Peter) need to worry about the outcome of the cash flow statement of the above calculation? (2 Marks)

__________________________________________________________________________

_________________________________________________________________________

How can you prepare contingency plans in the event that initial plans need to be varied ?

(2 Marks)

__________________________________________________________________________

_________________________________________________________________________

__________________________________________________________________________

How can you Implement, monitor and modify contingency plans as required to maintain financial objectives?

(1 Mark)

__________________________________________________________________________

_________________________________________________________________________

__________________________________________________________________________

How can you report the above budget and expenditure in accordance with organisational protocols? (1 Mark)

__________________________________________________________________________

_________________________________________________________________________

__________________________________________________________________________

Task 8: Petty Cash

Metropolitan stationary shop is another small business in Eastern Sydney. Acting as Peter, you want to keep on track of all the small expenses and asked the accounts manager to collect and collate for analysis, data and information on the effectiveness of financial management processes within the work team and present the petty cash book for the month of January. (2 marks)

0259752

Tasks to be completed in the Petty Cash Book template:

Recording the establishment of the petty cash float in the Petty Cash Book

Recording the payment vouchers in the Petty Cash Book

Balancing the Petty Cash Book on the dates indicated

Recording the reimbursement cheques in the Petty Cash Book

-7899401541780

Do you(acting as Peter) any recommend any improvements to existing processes? (1 mark)

MARKING TABLE FOR ALL TASKS (for trainer use only)

The assessor needs to use judgment in providing marks for the tasks based on learner performance.

TASK NO. MARK ALLOCATED MARK RECEIVED

Task 1 (Q & A) Q1 2.5 Q2 2.5 Q3 4 Q4 4 Q5 4 Task 2 5 Task 3 8 Task 4 8 Task 5 5 Task 6 8 Task 7 6 Task 8 3 Total

Details of Assessment

Term and Year 3, 2022 Time allowed 4 weeks

Assessment No 1 Assessment Weighting 40%

Assessment Type Knowledge Assessment

Due Date Week No. 4 Room Zoom

Details of Subject

Qualification BSB50420Diploma of Leadership and Management

Subject Name Finance

Details of Unit(s) of competency

Unit Code (s) and Names BSBFIN501 Manage budgets and financial plans

Details of Student

Signature: ____________________

Date: _____/_____/_________

Details of Assessor

Assessors Name Ali Kauser

Assessment Outcome

Assessment Result FORMCHECKBOX Competent FORMCHECKBOX Not Yet Competent Marks / 40

Feedback to Student

Progressive feedback to students, identifying gaps in competency and comments on positive improvements:

Assessor Declaration: I declare that I have conducted a fair, valid, reliable and flexible assessment with this student.

FORMCHECKBOX Student attended the feedback session.

FORMCHECKBOX Student did not attend the feedback session. Assessors

Signature: ___________________

Date: _____/_____/________

Purpose of the Assessment

The purpose of this assessment is to assess the student in the following learning outcomes: Competent (C) Not Yet Competent (NYC)

BSBFIN501 (Knowledge Evidence) basic accounting principles types of budgets and financial plans legislation and current ATO requirements, including the GST key requirements for financial record keeping and auditing principles for managing work teams BSBFIN501 (Performance Evidence) manage the budget and of an organisation for one reporting period. communicate with relevant people to clarify budget and financial plans, negotiate changes and disseminate information prepare, implement and modify financial contingency plans monitor expenditure and control costs support and monitor team members report on budget and expenditure review and make recommendations for improvements to financial processes meet record-keeping requirements for Australian Taxation Office (ATO) and for auditing purposes Assessment/evidence gathering conditions

Resources required for this Assessment

Upon completion, submit the assessment to your trainer along with assessment coversheet

Refer to the subject notes on E-Learning prior to responding to the tasks/questions

Any additional material will be provided by Trainer

Instructions for Students

Please read the following instructions carefully

This assessment has to be completed FORMCHECKBOX In class FORMCHECKBOX At home

The assessment is to be completed according to the instructions given by your assessor.

If you are not sure about any aspects of this assessment, please ask for clarification from assessor.

Please refer to the College re-assessment and re-sit policy for more information.

INSTRUCTIONS:

This is an in-class assessment and you are required to work on this assessment on a week-by-week basis. This assessment includes tasks such as short questions, checking and corrections of accounting methods, accurate data entry, preparation and authorization, filing documentation and relevant knowledge testing of financial transactions & interim reports. Marking allocations and marking table below.

MARKING TABLE FOR ALL TASKS (for trainer use only)

The assessor needs to use judgment in providing marks for the tasks based on learner performance.

TASK NO. MARK ALLOCATED MARK RECEIVED

TASK 1 4 TASK 2 4 TASK 3 2 TASK 4 2 TASK 5 2 TASK 6 1 TASK 7 2 TASK 8 2 TASK 9 3 TASK 10 2 TASK 11 4 TASK 12 (PART A) 4 TASK 12 (PART B) 4 TASK 13 4 Total 40 Week 1 &2

Task 1: Describe the following the accounting principles of accounting. Explain each one with an example. (4 marks)

The Revenue Principle:

_________________________________________________________________________________

The Expense Principle:

_________________________________________________________________________________

The Matching Principle:

_________________________________________________________________________________

The Cost Principle:

_________________________________________________________________________________

The Objectivity Principle:

_________________________________________________________________________________

Task 2: Visit the Australian Tax Office website (www.ato.gov.au) and identify the records relevant to current legislations regarding the following: (4 marks)

Sales records:

_________________________________________________________________________________

Purchase/expense records:

_________________________________________________________________________________

Year-end income tax records:

_________________________________________________________________________________

Records relating to payments made to employees:

_________________________________________________________________________________

PAYG withholding records relating to business payments:

_________________________________________________________________________________

Goods and Services Tax (GST):

_________________________________________________________________________________

Task 3: How often does an organization need to perform an audit trail to make sure all transactions are recording with due diligence? (2 marks)

_________________________________________________________________________________

Week3

Task 4: Give some examples for the following costs: (2 marks)

Direct cost

_________________________________________________________________________________

Indirect cost

_________________________________________________________________________________

Fixed cost

_________________________________________________________________________________

Variable cost

_________________________________________________________________________________

Step cost/Semi variable cost

_________________________________________________________________________________

Task 5: Sales Budget (2 marks)

From the information given, calculate and write down all possible variances (units or dollar amounts as applicable) in the variance columns stating whether they are favourable (F) or unfavourable (U).

Budget Actual Variance

(Total)

Qty $

Sales Product A Units 900 950 Sales Product B Units 1 200 1 180 Sales Product C Units 1 500 1 650 Sales Product A $/Unit 10 9 Sales Product B $/Unit 12 14 Sales Product C $/Unit 15 16 Production Product A Units 1000 1 100 Production Product B Units 1 200 1 320 Production Product C Units 1 800 1 780 Raw material X $ 5 700 6 875 Raw material Y $ 10 500 10 230 Raw material Z $ 7 200 7 476 Task 6: Dissemination of budgets and financial plans. (1 mark)

List the ways by which dissemination of budget and action requirements takes place. How can an organisation negotiate any changes required to be made to budget/financial plans with relevant personnel?

_________________________________________________________________________________

Task 7: Fees Budget Scenario. (1 Mark)

The Suburat Medical Centre, located in an affluent suburb, provides a 24-hour medical service to the residents. A recently recruited employee has been asked to help the management with the preparation of a fees budget for January 20X1and is provided with the following information:

Forty-five per cent of patients pay in cash when services are performed, and those insured claim refunds from their medical funds. The fee charged to the patients is $25.

Fifty-five per cent of the patients are accepted on bulk billing, where the fee charged is $19.

Thenumber of patients expected for consultation/treatment in January 20X1 is 1700.

Show how the fees budget will be prepared.

Workings:

Suburat Medical Centre

Fees budget January 20X1

Fees receivable in cash Fees receivable from bulk billing Total fees Prepare contingency plans for the organisation above if they dont reach the required target of patients? (1 Mark)

Task 8: Expense budget scenario. (2 marks)

Prepare a selling expense budget for the month of February 20XX for Dajan & Co. The sales for

February are expected to be $120000. The bases to be used for budget purposes are as follows:

Annual fixed expenses are allocated equally to each month.

Sales staff salaries are equal to 4% of sales.

Depreciation of sales vehicles is an amount of $18000 per annum.

Sales staff insurance is 2.5% of total sales staff salaries.

The advertising budget is currently $19200 per annum.

Sales vehicle maintenance costs the organisation 2% of sales revenue.

Freight out is calculated at 0.65% of revenue.

Workings:

Item $

Salaries Depreciation Staff Insurance Advertising Vehicle Maintenance Freight Total

Task 9: Preparing Profit & Loss and Balance sheet using Spreadsheet: (2 marks)

Complete the following P & L and Balance sheet.

P & L Statement IBC Pty Ltd

July 1, 2013 to June 30, 2014

Gross sales 346,400

Les: sales returns and allowances 1,000

A. Total Business Income Cost of Goods Sold: Beginning Inventory, July 2012 160,000

Add: Direct material 90,000

Direct labour 50,000

Factory overhead 2,000

Less: Closing inventory, June 2013 100,000

B. Cost of Goods Sold C. Gross Profit (A-B) Expenses Salaries 68,250

Utility bills 5,800

Rent 23,000

Office supplies 2,250

Insurance 3,900

Advertising 8,650

Telephone 2,700

Travel and entertainment 2,550

Dues and subscriptions 1,100

Interest paid 2,140

Commission paid 1,250

Owners drawings 11,700

D. Total expenses Net Profit (C-D)

Balance Sheet IBC Pty Ltd

July 1, 2013 to June 30, 2014

Assets Cash 8,450

Accounts Receivable 65,000

Inventory 19,550

Land 65,000

Buildings 32,500

Plant & equipment 32,500

Less: Accumulated depreciation (16,900)

Goodwill 22,100

A. Total Assets Liabilities Accounts payable 44,200

Bank overdraft 1,000

Short term loans 15,000

Mortgage 35,000

B. Total liabilities C. Net Assets (A-B) Owners equity Opening equity 66,500

Retained profit 66,500

D. Total owners equity Determine the financial performance and identify, document and recommend any improvements of the above calculation? (1 marks)

Week 4

Task 10: GST Calculations. (2 marks)

John is the owner of a fish and chips shop in Parramatta. His total sale for the month of February was $24,000 including GST. His purchase was $18,000 for the same month. Calculate the following.

(i) GST received

(ii) GST paid

(iii) Net GST payable

Week 5

Task 11: GST and Cash Flow Statement (4 marks)

A company forecasts the following transactions during the next financial year which will affect its

cash flow. (All ATO dues and ATO credits are expected to be settled during the year.)

Cash sales, 10% GST not included

Credit sales for year, including 10% GST

Cash receipts in respect of credit sales budget year

Cash receipts in respect of credit sales previous year

Cash purchases, 10% GST not included

GST payable to ATO

GST input credit from ATO

Wages

Other payments, including 10% GST 80 000

176 000

140 800

11 000

90 000

12 000

24 000

120 000

33 000

Prepare a budgeted cash flow statement assuming that the opening bank balance was $30,200.

Workings:

Cash Receipts: $ $

Task 12:

Part A: Accounts Receivable Collection Schedule and Cash Flow Statement. (4 marks)

Part B: Create an EXCEL file and complete the calculations through using formula. (4 marks)

(Please attach a screenshot of the excel work sheet at the end of assessment at appendix 1)

Scenario: Stock & Co., a manufacturing company need to produce a cash flow budget as part of an overdraft application with their bank. They collect and collate for analysis, data and information on the effectiveness of financial management processes within the work team. The following are some of Stocks budgeted figures:

Credit sales

$ Purchases

$ Wages

November 39 000 26 975 3 185

December 41 600 31 200 3 900

January 23 400 52 650 3 600

February 37 700 53 300 3 470

March 27 300 58 175 3 380

Budgeted cash at bank on 1 January is $5590.

Though credit terms of sale are payment by the end of the month following the month of supply, Stock & Co. can expect half of the sales to be paid on the due date, with the other half being paid during the following month. Creditors are paid during the month following the month of supply. Wages are paid in the month they are owed.

Utilising the following tables for format, prepare a cash budget for the quarter 1 January to 31March 20XX.

Workings

PART A: Accounts Receivable Collection Schedule

January February March

Receipts from sales in: $ $ $

November December January February TOTAL COLLECTIONS PART B: Cash flow plan

January February March

$ $ $

Balance b/fwd. Cash receipts (from credit sales) Total Funds Available Payments Accounts Payable Wages Total Payments Balance c/fwd. Task 13: Decision making and judgements. (4 marks)

Based on the calculations in TASK 12 (A and B) what went wrong?

_________________________________________________________________________________

What are the consequences of those wrongs?

_________________________________________________________________________________

What organisational protocols should be followed for reporting if loss is inevitable? Determine and access resources and systems to manage financial management processes within the work team

_________________________________________________________________________________

What support can be provided to the team members to ensure that proper management of finances is in action? How can the organisation to ensure that documented outcomes are achievable, accurate and comprehensible in the near future?

_________________________________________________________________________________

_____________________________________________________________________________

_________________________________________________________________________________

Appendix 1 (attach screenshot of excel file for Task 12 Part B)

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