BSBFIM601 Assessment –1 (1)

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BSBFIM601 Assessment –1 (1)

Manage budgets and financial plans

Assessment 1 – Part A

  • Develop a sales budget, profit budget, cash flow budget and debtor ageing summary.
  • Houzit prepares budgets to meet various company objectives. Budgets are prepared:

  • for a specific expansion of the business activities:
  • business case to be prepared covering a cost-benefit analysis, market research report and summary profit and investment expectations
  • to outline a specific debt reduction initiative:
  • company-wide summary of profit expectations, planned debt and equity funding arrangements, CAPEX plans summarized
  • annually to cover the next financial year:
  • for the 12 month period from the beginning to the end of the financial year
  • budget to include four quarter milestones in line with seasonal trends identified from prior year data
  • initial preparation includes a preliminary overview of the financial year ahead
  • sales budget for next year to be prepared by department by quarter
  • profit budget (including detailed expenses) for the next year to be prepared by quarter
  • cash flow effect of the GST payable per quarter to be prepared (scheduled compliance payment date is the 21st day after the end of the quarter)
  • To satisfy the statutory requirements relating to the current and short-term solvency of the company:
  • three monthly rolling forecast of cash flows to be prepared
  • To qualify the strategic plans for the next 3–5 years planning cycle:
  • Profit and CAPEX budget to be prepared.
  • Sales and profit budget for 2018/19 by department by quarter

  • The statutory requirements are:
  • superannuation is 9.5% of wages and salaries for each quarter
  • payroll tax is 5.45% of wages and salaries for each quarter
  • workers’ compensation is 2% of wages and salaries for each quarter
  • Company tax is 30% of net profit before tax for each quarter.
  • Assumptions:

    Luxury car tax paid in quarter 1

    Depreciation cost includes the depreciation of new luxury car and excludes old car that was sold

  • REVENUE
  • SALE
  • Sales Growth = (Sales – Previous Year Sales / Previous Year Sales) * 100

    Sales Growth = ((15,714,108 – 14,550,100) / 14,550,100) * 100 = 8%

    Sales = Previous Year Sales * 1.08 Growth

    Rate = 15,714,108 * 1.08

    BSBFIM601 Assessment –1 (1)
    Last updated: Jan 2022

    Page 1

    yle="">Sales = 16,971,237

  • COST OF SALES
  • Cost Of Sale = Sales * 56%

    = 16,971,237 * 0.56

    = 9,503,892

  • GROSS PROFIT
  • Gross Profit = Sales – Cost Of Sales

    = 16,971,237 – 9,503,892

    = 7,467,344

  • GROSS PROFIT %
  • Gross Profit% = (Gross Profit / Sales) * 100

    = (7,467,344 / 16,971,237) * 100

    = 44%

  • LUXURY CAR TAX
  • Financial Year: 2017 / 2018

  • Fuel Efficient Car Threshold = 75,375
  • Other Cars Threshold = 57,466
  • Luxury Car Tax Calculation

    Step 1:

    Cost-Threshold Cost = 97,466 – 57,466 = 40,000

    Step 2:

    Exclude GST = 40,000 / 1.1 = 36,363.6

    Step 3:

    Tax @ 33% = 36,363.64 * 33% = 12,000

    Cash Flow Budget per quarter of the GST

    A statutory requirement for GST is 10% of the recorded amounts in sales. The only capital purchase planned for the year is the luxury car for the chairman. Those expense payments on which 10% GST was paid include the following:

  • Cost of goods sold:
  • accounting fees
  • insurance
  • store supplies
  • advertising
  • cleaning
  • repairs and maintenance
  • rent
  • telephone
  • Electricity expense.
  • The GST amount payable each quarter is the difference between the GST collected from sales and the GST paid – format as per policy and procedures.

    Assumptions:

    Luxury car tax paid is exempt from the GST paid

  • GST COLLECTED
  • GST Collected = Sales * 10%

  • GST PAID
  • GST Paid = Total * 10%

  • GST PAYABLE
  • GST paid = GST collected – GST paid

    Debtor Ageing Summary at the end of the each quarter

    The historical records show that the debtors balance at the end of each quarter is usually about 20% of the quarter’s sales. At any time in the debtors balances 1% of the total debtors is overdue 90 days and over, 5% is 60 days overdue, 10%…

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    BSBFIM601 Assessment –1 (1)
    Last updated: Jan 2022

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