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ERPBIM501A Use accounting processes Comprehensive Assessment BSBFIM601 - Manage finances ASSESSMENT COVER SHEET Student name: Assessor name: Date of assessment / evidence: Venue: 251 PITT STREET, MANNING BLDG, HAYMARKET, SYDNEY, NSW Qualification title: BSB61015 - Advanced Diploma of Leadership and Management Unit(s) of competency assessed: BSBFIM601 - Manage finances Instructions to the student: To complete this unit’s assessment, you are required to answer all questions in this booklet and demonstrate specific tasks and skills. Assessment Comprehensive Assessment Knowledge questions and Application Task 1 □ Satisfactory □ Not Satisfactory □ Not Completed Instructions to the assessor To complete this unit’s assessment, the student is required to answer all questions in this booklet and demonstrate specific tasks and skills. Once the booklet is completed, you are to make the assessment decision. Please refer to the marking guidelines when making this decision. Context of Assessment Assessment tasks will be completed in the College, including the computer lab, using provided software and documentation. Assessment outcome: (please tick to indicate) ( Competent ( Not Yet Competent Is re-assessment required? Yes No Date of re-assessment (if applicable) Date declared competent: (if different to date of assessment) Student: · The assessment process, including assessment information, competency requirements, student rights and appeals were clearly explained. · I have been provided with feedback on my assessment and agree/disagree (delete what is not applicable) with the assessment result. Student signature: Date: Assessor: · The assessment process, including assessment information, competency requirements, student rights and appeals were clearly explained. · The assessment was valid, reliable, flexible and fair. · I have provided the student with feedback on their assessment. · I certify this assessment record is accurate. Assessor signature: Date: Comments: *Please see Moodle for feedback on assessment(s)* Instructions Part A You will create a new business of your choice. You have $2,000,000 cash to invest, the rest of the start-up costs will be covered by borrowings. Please discuss the type of business you will be staring with your assessor before attempting this assessment task 1. Describe your business in detail including a. Business name b. Business location c. Description of products and service d. Staff levels e. Equipment and facilities required 2. Research the start-up costs for your business. Create a start-up budget. Include items such as: Start-up Costing for [Business name] - [Year] START-UP COSTS Cost ($) EQUIPMENT/CAPITAL COSTS Cost ($) Registrations Business purchase price Business name Franchise fees Licences Start-up capital Permits Plant & equipment Domain names Vehicles Trade marks/designs/patents Computer equipment Vehicle registration Computer software Membership fees Phones Accountant fees Fax machine Solicitor fees Security system Rental lease cost (Rent advance/deposit) Office equipment Utility connections & bonds (Electricity, gas, water) Furniture Phone connection Shop fitout Internet connection Computer software Training Wages Stock/raw materials Insurance Building & contents Vehicle Public liability Professional indemnity Product liability Workers compensation Business assets Business revenue Printing Stationery & office supplies Marketing & advertising Total start-up costs $0 Total equipment/capital costs $0 Assumptions: All figures are GST exclusive. 3. Create a Profit and Loss budget for the first 12 months of your business operations. Budget for all Income and expenses, including: (Refer excel spreadsheet below) a. Assume that sales income will flow into your business at 20% in Q1, 24% in Q2, 26% in Q3, and 30% in Q4 b. Assume you will be purchasing a luxury car in the second quarter for $180,000 please account for Luxury car tax. c. Your statutory requirements are: · superannuation is 9% of wages and salaries for each quarter · payroll tax is 4.75% of wages and salaries for each quarter · worker’s compensation is 2% of wages and salaries for each quarter · Company tax is 30% of net profit before tax for each quarter. Sales and Profit budget EXPECT Budget 2016/17 Profit & Loss Acutals 2016/17 Qtr1 Qtr2 Qtr3 Qtr4 Revenue Sales -Cost of Goods sold Gross profit Calculate(Gross profit %) Calculate(Gross profit $) Expenses -Accounting Fees -Legal Fees - Interest Expense -Bank Charges - Depreciation - Insurance -Store Supplies - Advertising/Marketing -Cleaning -Repairs & Mainenance -Rent -Telephone -Electricity Expense -Luxury Car Tax -Fringe Benefits Tax - Superannuation - Wages & Salraries - Payroll Tax - Workers' Compensation Total Expenses Net Profit(Before Tax) Income Tax Net Profit Part B Assume you have reached the end of your first financial quarter in your business, you have been asked by the bank to provide a budget variance analysis for the first quarter trading. Once you have completed your budget, meet with your trainer/assessor who will provide you with actuals to facilitate the completion of Part B. Please calculate both the dollar and percentage variances for Q1 and determine if the results for each line item is Favourable or Unfavourable Budget Planning Actual Result Variances Profit & Loss Actuals Qtr1 Qtr1 Qtr1 20% $ % F or U Revenue Sales -Cost of Goods sold Gross profit Calculate(Gross profit %) Calculate(Gross profit $) Expenses -Accounting Fees - interest Expense -Bank Charges - Depreciation - Insurance -Store Supplies - Advertising -Cleaning -Repairs & Mainenance -Rent -Telephone -Electricity Expense -Luxury Car Tax -Fringe Benefits Tax - Superannuation - Wages & Salraries - Payroll Tax - Workers' Compensation Total Expenses Net Profit(Before Tax) Income Tax Net Profit Part C 1. Assume your business in part A has now been trading for the past 5 years. You notice the following issues: · The cash registers are very out-dated and don’t track the actual items or even categories of items purchased. · You're unable to determine where most of your revenue comes from. · Profits are down · There appears to be a significant amount of wastage, in your production of goods. · Supplies are often running out of date before they can be used. · Suppliers aren't paid until the invoices are well overdue. Some suppliers have refused you any further credit. Based on the issues listed above, research and write a report that addresses the following topics: a. What are the short and long term consequences of not addressing these issues? b. What are the immediate financial management requirements? c. What procedures will help to address these requirements? d. The steps that are involved in the accounting process e. The types of information that will be provided to third-parties, such as banks, suppliers, the Australian Taxation Office, your accountant f. Two different types of Point of Sale systems that can be integrated into an accounting system and your recommendation on which system to purchase g. Details of how you will conduct a pricing review to ensure an appropriate profit margin is maintained h. Details on how you intend to monitor your budget this financial year against performance targets, including possible remedial action where required In your report, ensure you address the issues outlined above within the topics of the report. Your trainer can provide further details on the formatting and content required. ERPBIM501A Assessment Guide V1.1 2015