Assessment 1 – BSBIFM501.docx
BSBIFM501 Manage budgets and financial plans
Name Athit Thangthongherun
Student ID number 180172
1. Compute for the missing values (?) in the Master Budget. Please make sure to read Appendix 1 Scenario in your assessment pack first in order to understand what the situation is and what is being asked for. You may also refer to Appendix 3 – Budgets and templates in your assessment pack to have an idea on how to compute for the values.
After completing the Master Budget, discuss two of the following: (Paragraph form)
● Discrepancy between profit company profit goals and budget projections (income and expenditure)
● Discrepancy between commissions negotiated and in budget
● Sales spread too evenly over the year to be accurate
● Budget for repairs and maintenance not realistic considering need
Achievability: The budget projects that the business will earn $1000000 net profit before tax for the coming financial year. The budget is achievable because from the previous company performance, the company managed to achieve sales of $1000000 in one quarter. This shows that it achievable for the company has a net profit of $1M in a financial year.
Understandable: The budget is simple but not inclusive. One can easily simply know what the projections mean but it hard to conceptualize because of lack of reference. There are no percentages of previous performance to show what the company earned in the previous financial year. This therefore makes the projections less convincing as it should be for those who do not have access to previous performance.
The master budget is accurate. The numerical calculations are correct showing total sales and all deductions. The calculations show that the company target of $1M is misses with a small margin of less than 5%.
Fairness: The budget is not fair because it assumes that sales and costs will be equal in all quarters. The second quarter has the highest sales of which are majorly from maintenance and repair. This is different from other quarters where the sales are 30% less to Q2. Therefore, the master budget is not fair by assuming equal sales and cost in all quarters.
(For numbers 2-5, please refer to Appendix 2 – Budgeting and finance policy and Appendix 3 Sales cost centre expense budget)
2. Refer to relevant legislation and ATO requirements, such as Business Activity Statements (BAS), and GST
Business activity statements (BAS)
If you are a business registered for GST you need to lodge a business activity statement (BAS).
Your BAS will help you report and pay your:
When you register for an Australian business number (ABN) and GST we will automatically send you a BAS when it is time to lodge.
Goods and Services Tax (GST)
Goods and Services Tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. If you are registered for GST, you send the GST you collect (less GST credits you can claim) to the Tax Office monthly, quarterly or annually (if eligible).
A sale in GST terms is referred to as a “supply”. The definition of supply has been drafted very widely to cover most receipts so that all revenue of business is subject to
GST. A supply includes:
3. Explain the key requirements for financial recordkeeping and auditing
Setting up the right record keeping system for your business will help you work efficiently, meet legal requirements and strengthen customer and staff relationships.
There are certain record keeping requirements for businesses in NSW, and there may be specific laws and requirements related to your industry sector. It’s a good idea to protect yourself by seeking expert advice before setting up a record keeping system for your business.
Laws that apply to your business will determine how long you need to keep records for. If you use an electronic record keeping system, you must also be able to produce a hard copy of a record if the Australian Taxation Office (ATO) or Australian Securities and Investments Commission (ASIC) request it.
Audit working papers are the documents which record all audit evidence obtained during financial statements auditing, internal management auditing, information systems auditing, and investigations. Audit working papers are used to support the audit work done in order to provide assurance that the audit was performed in accordance with the relevant auditing standards. They show the audit was:
4. Describe the principles and techniques involved in managing: budgeting, cash flows, electronic
spreadsheets, GST, ledgers…...
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