Cover Sheet
Created by Sam Menai_04/04/2023
Assessment task 2
Finance and resources management
Semester XXXXXXXXXX
Student Name:
Student ID:
Class #:
Teacher name
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STUDENT answer sheet
Question 1 and 2
Question 1
As per the financial statements listed above (P&L and balance sheet), does Smart Accessories Pty Ltd use the Cash or
Accrual Accounting method? Is the method used appropriately given their business operations? Provide an in-context
explanation for your response.
Answer 1
Question 2
Given the business structure of Smart Accessories Pty Ltd, find the appropriate Income Tax Rate. Is this the tax rate used
above (in the profit and loss statement)?
Answer 2
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Question 3
Question 3
To monitor Smart Accessibility Pty Ltd’s budgets using the information data we gave you, construct a quarterly budget for your
department using Excel. Equation functions must be used for all calculations.
The Sales Revenue, the Cost of Sales, wages, bad debts, and other operating expenses are expected to fluctuate throughout the yea
In the first quarter, you expect a 20% drop and in the fourth quarter, you expect a 25% drop
In the second quarter, heading towards Christmas, you expect an increase of 30%, and in the third quarter an increase of 15% from the average.
Wholesale Department Budget XXXXXXXXXX
Movement % 20% drop 30% increase 15% increase 25% drop
Annual Q1 Q2 Q3 Q4
Credit Sales Revenue $ 6,000,000 $1,200,000 $1,950,000 $1,725,000 $1,125,000
Cost of Sales -$ 3,100,000
Wages -$ 800,000
Telephone -$ 50,000
Travel -$ 35,000
Office Supplies -$ 7,000
Bad Debts -$ 150,000
Other Operating Expenses -$ 125,000
Departmental Profit $ 1,733,000 $ 1,200,000 $ 1,950,000 $ 1,725,000 $ 1,125,000
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Question 4
Question 4
Describe two of the Excel equations you have used and why you have used them.
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Question 5
Question 5
Instead of a 20% drop in quarter one, there has been a 30% drop, however, Travel Expenses have decreased by 25% from the
a) budgeted average, bad Debts for the period have been ($40,000), and Telephone ($10,000).
Using Excel and techniques, compare the budgeted figures for the first quarter to the actual figures, and
Bad Debts
Annual Q1 Budgeted Actual Variance $ Variance % U or F there is a higher risk of not collecting our money
Credit Sales Revenue $ 6,000,000 $1,200,000 $ 1,050,000 $150,000 12.50% there is a potential risk of financial distress
Cost of Sales -$ 3,100,000 $0 $0 ERROR:#DIV/0! there is also a risk of lack of liquidity
Wages -$ 800,000 $0 $0 ERROR:#DIV/0!
Telephone -$ 50,000 $0 $0 ERROR:#DIV/0! Credit sales revenue
Travel -$ 35,000 $0 $0 ERROR:#DIV/0! less sales may equal less profit
Office Supplies -$ 7,000 $0 $0 ERROR:#DIV/0! market share
Bad Debts -$ 150,000 $0 $0 ERROR:#DIV/0! products/pricing issues
Other Operating Expenses -$ 125,000 $0 $0 ERROR:#DIV/0!
Departmental Profit $ 1,733,000 $1,200,000 $ 1,200,000 $0 0% Recommandation
b) Report and analyse any ‘high priority’ variation in your budgeted figures. Why do you think these are of high priority, What are some possible reasons for this variation?
c) What recommendations and actions would you take to
ing the budget back under control for the remaining
quarters? How would you go about implementing these recommendations within your team? Draft a short
report outlining your finding.
short report:
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Question 6
Question 6
From your experience, you estimated that 75% of the Debtors ledger balance will pay within the first month from the
sale, 16% within the second month, 7% within the third, and 2% will be written off as bad debts.
Your Credit Terms with your suppliers stipulate you must pay within 45 days of purchasing.
a) Using Excel, complete a quarterly Aged Debtors Budget for your department using the information above as
well as any required information provided in previous sections. Equation functions must be used for all
calculations.
Annual Q1 Q2 Q3 Q4
Credit Sales Revenue $6,000,000 $1,200,000 $1,950,000 $1,725,000 $1,125,000
Cu
ent 75% $900,000
30 days 16% $180,000
60 days 7% $120,750
Bad Debts 2%
b) At the end of the first quarter, you find the total owing by debtors is $555,000. Using your previously calculated
actual sales for the quarter calculate the Debtors’ Aging Ratio for the quarter. Please use the following debtor
Debtor aging formula: DAR = (Debtor’s balance/Total sales) x (365/4). Express your result in DAYS. For example, if
result is 32, then you need to express it as 32 days.
Step 1: Debtor balance
Step 2: Sales figure Get this figure from question 5, QRT sales actual result.
Step : Ration ERROR:#DIV/0! days
Debtor aging formula: DAR = (Debtor’s balance/Total sales) x (365/4)
c) How would these findings affect the business’s cash flow position? What recommendations would you make
based on these? How is your recommendation likely to affect contingency planning?
d) To implement these recommendations, write a formal email to your team (and copy in your manager) advising
that the recommendations will commence in a week. Submit a copy of the email. (approximately 25-50 words)
The email must be written using appropriate business protocol e.g. no a
eviations, capital I, co
ect grammar,
no spelling e
ors, salutation (Dear Lee), and sign-off must be your name, title, and contact details.
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Question 7
Question 7
a) Prepare your contingency plan to implement three potential risks that could affect your department using the table
below. You must provide information in each of the columns.
Risks Identified Risk Level Potential Impact Mitigation Strategy Contingency Plan
Customers (Debtors) do not pay by the due date High Loss of revenue Credit Checks prior to making credit a
angements Send out reminder letters - collection phone calls - take further legal action
2)
3)
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RMIT Classification: Trusted
STUDENT – PRODUCT ASSESSMENT TASK
Task Numbe
2 of 3.
Task Name
Short Answers Portfolio
National unit/s code
BSBOPS501
BSBFIN501
National unit/s title
Manage Business Resources
Manage Budgets and Financial plans
National qualification code
BSB50120
National qualification title
Diploma of Business
RMIT Program code
C5406
RMIT Course code
BUSM6517C
ACCT5434C
Section A – Assessment Information
Assessment duration and/or due date
Due 23 April, Sunday 11:59pm
Task instructions
Type of Product (tick which applies)
☐ Project
☐ Report
Portfolio
☐ Case study
Summary and Purpose of Assessment
This assessment is Assessment Task two (2) of three (3) assessment tasks in this cluster of two courses: BSBOPS501
Manage Business Resources and BSBFIN501 Manage Budgets and Financial plans. All three (3) Assessment Tasks must be satisfactorily completed to be deemed competent in these two courses.
The purpose of this assessment is to for you to demonstrate your understanding and application of a range of financial planning approaches. This includes monitoring and controlling budgets and financial plans, and reviewing and evaluating financial management process and business resources. You will be required to analyse business resources requirement, conduct variance analysis, review and report on resource usage, review company performance and develop contingency plans, and collaboration with their team members.
Assessment Instructions
What
This assessment will be using a scenario that enables students to demonstrate the necessary skills to manage budgets and financial plans, and business resources.
You must work in groups of 3 so you can complete parts of this assessment. This will be done via meetings during class/online. Please note that whilst there will be group discussion, consultation ,and collaboration, you are required to complete your own assessment as an individual and not as a group assessment.
You must answer all 7 questions by the due date. You are encouraged to complete two questions every second week in order to
eak down the task and make it more manageable. A recommended word range is provided next to each question as a guide. Answers can be typed into a word document and submit responses to all questions in Canvas.
This scenario “Smart Accessories Pty Ltd” has been derived from the main fictional “Stingray Corporation” an overarching case study used throughout the diploma of business.
Section 1 - Smart Accessories Pty Ltd
Stingray’s Smart Watch Business Unit also operates Smart Accessories Pty Ltd a mid-sized wholesale watch accessory based in the western subu
s of Melbourne. As well as their wholesale business, they have a small retail operation facility where they sell a select number of specialist varieties of watch bands. The following financial statements for the 2020/21 tax year have been provided. A full copy of the case study can be downloaded from Canvas.
Smart Accessories Pty Ltd
Balance Sheet as at 30/6/21
Owner’s Equity
$
$
Capital
2,766,000
Add: Net Profit
469,000
3,235,000
Less: Drawings
350,000
2,885,000
Assets
Cu
ent Assets
Cash at Bank
200,000
Debtors Control
350,000
Stock Control
550,000
1100,000
Non-Cu
ent Assets (Fixed Assets)
Premises
5,000,000
Equipment
1,000,000
Vehicles
750,000
6,750,000
Total Assets
7,850,000
Liabilities
Cu
ent Liabilities
Creditors Control
915,000
GST Clearing
50,000
965,000
Non-Cu
ent Liabilities
Loan XYZ Bank
4,000,000
Total Liabilities
4,965,000
Net Assets (Assets less Liabilities)
2,885,000
Smart Accessories Pty Ltd
Profit and Loss Statement
For the year ended 30/6/21
Revenue
$
$
Retail Cash Sales
1,050,000
Wholesale Credit Sales
5,450,000
Interest Received
10,000
6,510,000
Less Cost of Sales
Cost of Goods Sold
3,200,000
Cartage Inward
150,000
3,350,000
Gross Profit
3,160,000
Less Expenses
Wages & Salaries
1,055,000
Interest Paid
200,000
Other Operating Expenses
985,000
Bad Debts
100,000
Depreciation
150,000
2,490,000
Net Profit Before Tax
670,000
Income Tax Expenses
201,000
Net Profit After Tax
469,000
Use the above information to assist you in answering the following questions. You will also be required to use the ATO website to research some of the answers. Where appropriate, provide details of where you found your information and any calculations performed.
Question 1:
As per the financial statements listed above (P&L and balance sheet), does Smart Accessories Pty Ltd use the Cash or Accrual Accounting method? Is the method used appropriately given their business operations? Provide an in-context explanation for your response.
Question 2:
Given the business structure of Smart Accessories Pty Ltd, find the appropriate Income Tax Rate. Is this the tax rate used above (in the profit and loss statement)?
Section 2 – Construct and monitor budget
You are the Sales Manager for the Wholesale Department at Smart Accessories Pty Ltd. You have a team of 7 salespeople and one supervisor who assists in the filling of orders. You have been given the following departmental budget to follow for the 2020/21 financial year.
Wholesale Department Budget 2020/21
Credit Sales Revenue
$6,000,000
Cost of Sales
($3,100,000)
Wages
($800,000)
Telephone
($50,000)
Travel
($35,000)
Office Supplies
($7,000)
Bad Debts
($150,000)
Other Operating Expenses
($125,000)
Departmental Profit
$1,733,000
Due to the seasonality nature of this business, the Sales Revenue, the Cost of Sales, wages, bad debts, and other operating expenses are expected to fluctuate throughout the year.
In the first quarter, you expect a 20% drop and in the fourth quarter, you expect a 25% drop from the average.
In the second quarter, heading towards Christmas, you expect an increase of 30%, and in the third quarter an increase of 15% from the average.
You will need to monitor compliance with the project budgets and take co
ective action that you feel is appropriate by performing the following tasks.
Question 3:
To monitor Smart Accessibility Pty Ltd’s budgets using the information data above, construct a quarterly budget for your department using Excel. Equation functions must be used for all calculations.
Question 4:
Describe two of the Excel equations you have used and why you have used them.
Question 5:
Actuals for Quarter one (1)
Instead of a 20% drop in quarter one, there has been a 30% drop, however, Travel Expenses have decreased by 25% from the budgeted average, bad Debts for the period have been ($40,000), and Telephone ($10,000).
a) Using Excel and techniques, compare the budgeted figures for the first quarter to the actual figures, and conduct variance analysis in dollars and in percentages. Equation functions must be used for all calculations.
) Report and analyse any ‘high priority’ variation in your budgeted figures. Why do you think these are of high priority? What are some possible reasons for this variation?
c) What recommendations and actions would you take to
ing the budget back under control for the remaining quarters? How would you go about implementing these recommendations within your team? Draft a short report outlining your finding.
Question 6:
From your experience, you estimated that 75% of the Debtors ledger balance will pay within the first month from the sale, 16% within the second month, 7% within the third, and 2% will be written off as bad debts.
Your Credit Terms with your suppliers stipulate you must pay within 45 days of purchasing.
a) Using Excel, complete a quarterly Aged Debtors Budget for your department using the information above as well as any required information provided in previous sections. Equation functions must be used for all calculations.
) At the end of the first quarter, you find the total owing by debtors is $555,000. Using your previously calculated actual sales