BSBFIM601 Manage Finances

BSBFIM601 Manage finances
Assessment task 1
PROFIT BUDGET
PROFIT BUDGET 2015/16 ($) 2014/10 2014/11 2014/12
Revenue - 20% 24% 26%
Sales 16,971,237 3,394,247 4,073,097 4,412,522
– Cost of Goods Sold 9,673,605 1,934,721 2,321,665 2,515,137
Gross Profit 7,297,632 1,459,526 1,751,526 1,897,384
Gross Profit % 43% 43% 43%
Expenses
– Accounting Fees 10,000 2,500 2,500 2,500
– Interest Expense 84,508 21,127 21,127 21,127
– Bank Charges 1,600 400 400 400
– Depreciation 170,000 42,500 42,500 42,500
– Insurance 13,390 3,348 3,348 3,348
– Store Supplies 3,749 750 900 975
– Advertising 350,000 200,000 50,000 50,000
– Cleaning 16,282 3,256 3,908 4,233
– Repairs & Maintenance 64,272 16,068 16,068 16,068

– Rent 2,640,508 660,127 660,127 660,127
– Telephone 14,997 2,999 3,599 3,899
– Electricity Expense 26,780 5,356 6,427 6,963
– Fringe Benefits Tax 28,000 7,000 7,000 7,000
– Superannuation 187,020 37,404 44,885 48,625
– Wages & Salaries 2,078,000 415,600 498,720 540,280
– Payroll Tax 98,705 19,741 23,689 25,663
– Workers’ Compensation 41,560 8,312 9,974 10,806
Total Expenses 5,841,371 1,458,488 1,395,172 1,444,514
Net Profit (Before Tax) 1,456,261 1,038 356,260 452,871
Income Tax 436,878 311 106,878 135,861
Net Profit 1,019,383 727 249,382 317,009
Sales Budget
SALES 2014/15 ($) 2014/10 2014/11 2014/12
BUDGET Total Budget 20% 24% 26%
Total Sales 16,971,237 3,394,247 4,073,097 4,412,522
GST Cash flow analysis

CASH FLOW net 2014/10 2014/11 2014/12
ANALYSIS-
GST
GST Collected 1,697,124 339,425 407,310 441,252
Less GST Paid 12,281,358 282,913 306,854 326,325
GST Payable 415,765 56,512 100,456 114,927
Aged Debtors budget
AGED TOTAL 2014/10 2014/11 2014/12

DEBETORS
BUDGET
Sales 348833 111837 103136 133860
% Debtors Sales 20% 20% 20%
Total Debtors 100% 678,849 814,619 882,504
Current 84% 570,234 684,280 741,304
30 Days 10% 67,885 81,462 88,250
60 Days 5% 33,942 40,731 44,125
90 Days 1% 6,788 8,146 8,825
Budget notes:
Reason for profit and loses:
 Reasons are that there is an increasing customer base and the business is built on superior
after sales service.
 Effectiveness of existing financial management approaches
 Inadequate analysis of revenue/expense to produce an informed estimate.
 Lack of computer software to produce timely and detailed reports.
 Too much reliance on qualitative input rather than balancing it with quantitative data and
analysis.
PART B
1. Current compliance requirement and liabilities for this organization under the
corporation Act 2001.
 a due diligence committee that oversees and documents the due diligence process and
identifies issues for investigation and disclosure in the prospectus;
 directors, management and various advisers to the issuer undertaking particular tasks to
ensure the prospectus is properly prepared;
 the due diligence committee undertaking verification of the prospectus to ensure it does
not contain any false or misleading statements.
 Financial probity requires the preparer of budgets to do so with honesty, integrity and in
an ethical manner. This would require objectivity and conduct that ensures that no
conflict of interests exists or is perceived to exist in the preparation of budgets.
 Others must be advised to be truthful in their assessments, responses and the
documentation of financial transactions and notes to the budgets.
 Financial viability – profit on target for the first quarter which is the seasonally slowest
quarter of the year
 Gross profit margins – yes, the variance report identifies that the company was able to
maintain its gross profit margin in line with the budget.
 Review the discount policy to protect the gross profit margin.
 Reduce loans to reduce exposure to rising interest rates.
 Review salaries and wages to reduce costs and improve viability.
 Revised budget to include adjustments to the advertising budget with the $50,000 added
to the next quarter.
2. Most suitable software for the Holden Greenwright Pty Ltd
Our target market is small business owners (1-9 employees), freelancers and solo entrepreneurs.
Wave has users in 200 countries around the world and our ecosystem is 2 million strong.
Each products have cutmosizeable as Contemporary, Classic, Modern.
Wave offers 100% free, real double-entry accounting for small businesses. As a cloud-based
software, Wave allows you to access your data from anywhere, add unlimited collaborators and
work on all of your businesses from a single login. Wave eliminates data-entry and puts the
financial reports you need at your fingers tips, allowing you to spend more time doing what you
love. Your accounting is also seamlessly integrated with invoicing, receipt scanning, payment
processing and payroll.
3. Principle of accounting in developing budget
1. Matching principle
The matching principle is applied in preparing a budget by making sure that the revenues for the
period are matched with the expenses incurred in earning that revenue for the period.
1. Account group
Account groups are used in preparing a budget by separating the revenue and expense accounts
into the profit budgets and the asset, liability and equity accounts into the capital budgets like
cash flow and capital expenditure.
1. Time period
Time periods are applied in preparing a budget by applying the accounting assumption that a
going concern can be divided into shorter time periods of weeks, months, quarters and years for
the purpose of budgeting and reporting.
Implication of probity when preparing and revising budget
Following implication of probity need to be consider when preparing and revising budget for
Holden Greenwright ltd.
 Financial probity requires the preparer of budgets to do so with honesty, integrity and in
an ethical way. This would require objectivity and conduct that ensures that no conflict of
interest exists or is perceived to exist in the preparation of budgets.
 Others must be advised to be truthful in their assessments, responses and the
documentation of financial transactions and notes to the budgets
4. list the new internal controls and risk management for Holden Greenwright Pty Ltd
including the maintenances of audit trails
Risk management
Risk management includes internal control additions and modifications:
 discounts to be recorded
 reconcile cash registers daily
 proper authorisation – timesheets and supplier invoices
 maintain currency of asset register
 open lines of communication
 need for separation of duties
 job descriptions
 roster duties to minimise fraud possibility.
Audit trails
 List of directives – all cash received receipted on pre-numbered forms, payments via
cheques with stubs completed, voucher system in payments duly authorised, data entry to
identify source, cross coded source with electronic entry.
 Paperwork – paperwork with complete details must be provided as evidence of any
receipt or payment of cash.
 Secondary control – receipt of cash will have a secondary monitoring system like a cash
register or a second person. Verify with an independent record.
 Proper authority – all payments must be authorised by the person responsible for the
department or cost centre.
Current assets
Cash on hand
Cheque account $471,263.60
Payroll cheque account $70,000.00
Cash drawer $11,559.08
Petty cash $380.00
Undeposited funds $780.00
Electronic clearing account $93,035.00
Total cash on hand $647,017.68
Total current assets $647,017.68
Property, plant and equipment

Timber equipment timber equipment.00
Timber equipment accum dep ($30,000.00)
Total timber equipment $70,000.00
Office equipment at cost $40,000.00

Office equipment accum dep ($20,000.00)
Total property, plant and equipment $90,000.00
Total Assets $737,017.68

Liabilities
Current liabilities
GST Liabilities
GST collected ($109,090.92)

GST paid $74,363.60
Total GST liabilities ($34,727.32)
Payroll liabilities
PAYG withholding payable ($24,000.00)
Total payroll liabilities ($24,000.00)
Total current liabilities ($58,727.32)
Long-term liabilities
Bank loans $200,000.00
Total long-term liabilities $200,000.00
Total liabilities $141,272.68
Net Assets $595,745.00
Equity
Partner A
Partner A drawings ($60,000.00)
Partner B
Partner B drawings
($60,000.00)
Retained earnings $561,805.00
Current year earnings $153,940.00
Total Equity $595,745.0
Income Statement
Performance Income:
Timber sales $550,000.00
Hardware sales $360,000.00
Service fees $290,000.00
Total Income $1,200,000.00
Cost of Sales
Timber purchases $375,000.00
Hardware purchases $235,000.00
Total cost of sales $610,000.00
Gross Profit $590,000.00
Expenses
Marketing $60,000.00
Depreciation expense $50,000.00
Insurance $10,000.00
Other fees $700.00
Employment expenses
Superannuation $12,960.00
Wages and salaries $120,000.00
Other employer expenses $6,000.00
Total employment expenses $138,960.00
Rent $120,000.00
Telephone $1,200.00
Services
Electricity $6,000.00
Gas $6,000.00
Water $4,800.00
Total Expenses $397,660.00
Operating Profit $192,340.00
Other Expenses
Interest expense $24,000.00
Training $14,400.00
Total other expenses $38,400.00
Net Profit /(Loss) $153,940.00

Statement of Cash Flow
Cash Flow from Operating Activities
Net income $153,940.00

Timber equipment accum dep $30,000.00
Office equipment accum dep $20,000.00
GST paid $74,363.60
Net Cash Flows from Operating Activities $145,212.68
Cash Flow from Investing Activities
Net Cash Flows from Investing Activities $0.00
Cash Flow from Financing Activities

Partner B drawings ($60,000.00)
Net Cash Flows from Financing Activities ($120,000.00)
Cash at the beginning of the period $621,805.00

Cash at the end of the period $647,017.68
Net Increase/Decrease for the Period $25,212.68

Budgets:
Account July Aug Sept Oct Nov Dec Jan Feb Mar April May June Total
Income
Timber $40,000 $40,00 $40,00 $40,00 $40,00 $40,00 $40,00 $40,00 $40,00 $40,00 $40,00 $40,00 $480,00
sales 0 0 0 0 0 0 0 0 0 0 0 0
Hardware $35,000 $35,00 $35,00 $35,00 $35,00 $35,00 $35,00 $35,00 $35,00 $35,00 $35,00 $35,00 $420,00
sales 0 0 0 0 0 0 0 0 0 0 0 0
Professio $30,000 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $360,00
nal fees 0 0 0 0 0 0 0 0 0 0 0 0
Total $105,000 $105,0 $105,0 $105,0 $105,0 $105,0 $105,0 $105,0 $105,0 $105,0 $105,0 $105,0 $1,260,0
income 00 00 00 00 00 00 00 00 00 00 00 00
Cost of sales
Timber $30,000 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $30,00 $360,00
purchases 0 0 0 0 0 0 0 0 0 0 0 0
Purchases
$20,000 $20,00 $20,00 $20,00 $20,00 $20,00 $20,00 $20,00 $20,00 $20,00 $20,00 $20,00 $240,00
0 0 0 0 0 0 0 0 0 0 0 0
Total $50,000 $50,00 $50,00 $50,00 $50,00 $50,00 $50,00 $50,00 $50,00 $50,00 $50,00 $50,00 $600,00
cost of 0 0 0 0 0 0 0 0 0 0 0 0
sales
Gross $55,000 $55,00 $55,00 $55,00 $55,00 $55,00 $55,00 $55,00 $55,00 $55,00 $55,00 $55,00 $660,00
profit 0 0 0 0 0 0 0 0 0 0 0 0
Expenses
Marketin $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $60,000
g
Depreciat
ion $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $72,000
expense
Insurance $5,000 $0 $0 $0 $0 $0 $5,000 $0 $0 $0 $0 $0 $10,000
Superann $1,036 $1,036 $1,036 $1,036 $1,036 $1,036 $1,036 $1,036 $1,036 $1,036 $1,036 $1,036 $12,432
uation
Wages
and $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $96,000
salaries
Workers'
compensa $400 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $400
tion
Account July Aug Sept Oct Nov Dec Jan Feb Mar April May June Total
Rent $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $120,000
Telephone $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $1,200
Electricity $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $6,000
Gas $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $6,000
Water $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $1,200
Total $36,636 $31,236 $31,236 $31,236 $31,236 $31,236 $36,236 $31,236 $31,236 $31,236 $31,236 $31,236 $385,232
expenses
Operatin $18,364 $23,764 $23,764 $23,764 $23,764 $23,764 $18,764 $23,764 $23,764 $23,764 $23,764 $23,764 $274,768
g profit
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
income
Other expenses
Interest $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $24,000
expense
Training $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $18,000
Total
other $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $42,000
expenses
Net profit $14,864 $20,264 $20,264 $20,264 $20,264 $20,264 $15,264 $20,264 $20,264 $20,264 $20,264 $20,264 $232,768
/ (loss)
Statement of Financial Position (Projected)
Assets
Current assets
Cash on hand
Cheque account $500,000.00

Payroll cheque account $70,000.00
Cash drawer $650.00
Petty cash $380.00
Undeposited funds $780.00
Electronic clearing account $49,995.00
Total cash on hand $621,805.00
Total current assets $621,805.00
Property, plant and equipment
Timber equipment at cost $100,000.00
Office equipment at cost $40,000.00
Total property, plant and equipment $140,000.00
Total Assets $761,805.00
Liabilities
Long-term liabilities
Bank loans $200,000.00
Total long-term liabilities $200,000.00
Total liabilities $200,000.00
Net Assets $561,805.00
Equity
Retained earnings $561,805.00

Current year earnings $232,768.00
Total Equity $794,573.00
Statement of Financial Performance (Projected)
Income:
Timber sales $480,000.00
Hardware sales $420,000.00
Professional fees $360,000.00
Total Income $1,260,000.00
Cost of Sales
Timber purchases $360,000.00
Hardware purchases $240,000.00
Total cost of sales $600,000.00
Gross Profit $660,000.00

Expenses
Marketing $60,000.00
Depreciation expense $72,000.00
Insurance $10,000.00
Other fees
Employment expenses
Superannuation $12,432.00
Wages and salaries $96,000.00
Other employer expenses $400.00
Total employment expenses $108,832.00
Rent $120,000.00
Telephone $1,200.00
Services
Electricity $6,000.00
Gas $6,000.00
Water $1,200.00
Total Expenses $385,232.00
Operating Profit $274,768.00
Other Expenses
Interest expense $24,000.00
Training $18,000.00
Total other expenses $42,000.00
Net Profit /(Loss) $232,768.00

Statement of Cash flow
(Projected)
Cash flow from operating activities:

Net income $232,768.00
Timber equipment accum dep $30,000.00
Office equipment accum dep $20,000.00
GST paid $48,100.00
Net Cash Flows from Operating Activities $236,018.00
Cash Flow from Investing Activities
Net Cash Flows from Investing Activities $0.00
Cash Flow from Financing Activities

Partner B drawings ($60,000.00)
Net Cash Flows from Financing Activities ($120,000.00)
Cash at the beginning of the period $621,805.00

Cash at the end of the period $737, 823.00
Net Increase/Decrease for the Period $116,018.00

Assessment task 2
Variances report
Holden Greenwright Pty Ltd
Variances to Budget
First Quarter
$ %
Actual Results Budget Actual F or U
Variances Variances
Sales 3,394,247 3,371,200 23,047 - 0% U
- Cost of Goods
1,934,721 1,955,296 20,575 1% F
Sold
Gross profit 1,459,526 1,415,904 43,622 -3% U
Gross profit % 43% 42% 0% -2% U
Total Expense 1,458,488 1,410,572 47,916 -3% F
Net Profit (Before
1,038 5,333 4,295 80% F
Tax)
Income Tax 311 1,600 1289 128% F
Net profit 727 3,733 3006 300% F
Debtor ageing Ratio
2014/10 2014/11 2014/12
Trade Debtor 850,000 975,000 1,118,325
Sales 14,550,100 15,714,108 16,971,237
Debtor Days 21 22 24
Cash flow analysis

A cash flow budget helps to identify any shortcoming or excesses in cash forecast able future.
Cash flow budget can be set for weekly, monthly or quarterly with the format usually determine
by the organization’s policy and procedures.
Following budget cash flow analysis for Holden Greenwright Pty Ltd is made for quarterly.
Cash flow analysis
Budget Actual
GST
GST Collected 339,425 337,120
Less GST Paid 282,913 279,988
GST payable 56,512 57,132
Issues and reasons
There are some issues are identified according to the information provided. Such as:
- It had been a tough quarter with the economy still in the recession and the impact this was
having on the retail sector.
- Bank is raising interest rates in line with the increased upward international pressures and Ed
has a significant part of their loan funds on a variable interest rate which change directly with
market conditions.
- The sales seems to be holding up reasonably well as first quarter results are generally impacted
by factors relating to public and school holidays but there was concerned about the discounts that
had to be given to generate these sales.
Causes:
- Ed could not get into some national magazines this quarter to promote the store offers.
- It helps the Ed exceed the set budget.
- Wages and salaries running bit high.
Variances
Typical variance report will compare actual to budget and create a $ variances to the budget and
a % variances to it as well. These two variances highlight areas that need to be investigated for
corrective action.
Actual to budget
There are many differences between the set budget of first qtr. of the Ed and actual of the first
qtr. Such as -6% differences in sales and 1% in cost of goods sold. Gross profit has a 1% if
difference between in actual and budget that is a favourable. There are many things are same in
the actual and budget such as - Accounting Fees, Depreciation, Insurance, Superannuation,
Payroll and worker compensation etc. . The big difference is in the net profit and income tax.
The biggest reasons for variances are occurred because of the recitation hit to the economy and
the bank interest rate is also increased. The one other factor is discount that had to be given to
generate the sale
Performance
As per needs for future profit expectations budget is still low in margin as comparative
· Wages and salaries a little high with 12.2% at Ed as a 22% of sales, however the industry
average is more like 11%.
· Average time for debtors to pay accounts is increasing; however, there should not be a concern
to cash flow as yet as a majority of debtors remain within 30 days.
Response to board questions:
· financial viability for profit on target for the first quarter which is the seasonally slowest quarter
of the year.
· The variance report identifies the gross profit margin that the company was able to maintain its
gross profit margin in line with the budget.
Recommendations
Analysing profitability and cash flows should be take over a series of past period to identify
trends in the underlying data of this analysis should be on:
Growth , Stability, Sustainability:-
· The potential for the business and the way the growth is to be adequately managed. Such as the
discount policy needs to review to protect the gross profit margin.
· Salaries and wages policy needs to review to manage the budget, extra reduce costs and
improve viability.
Plan to revise the budget to include adjustments to the advertising budget with the $50,000 added
to the next quarter.
· Salaries and wages policy needs to review to manage the budget, extra reduce costs and
improve viability
· Apply more discounts on public holidays
Evaluation
· Budgets are prepared for all cost centres such as all cleaning and maintenance charges, bank
interest rates, insurance and all taxes.
· Budget monitoring and reporting policy is shortened to monthly basis.
· Restructure loan into fixed interest rate to take out the volatility in result
Appendix 1 –Holden Greenwright Ltd
Edward Tan owns a medium sized retail store. He provides you with the following information
which is current as of 1 October 2014. All sales and purchasing figures are inclusive of GST.
Assets:
Cash (Bank) $245,000
Computer equipment $16,400
Delivery Van $26,000
Phones $2,300
Office Equipment $4,500
Debtors $13,580
Stock $117,303
Expenses
Phone Service / Calls $780
Electricity $1590
Gas $600
Water $550
Insurance $1300
Payroll $465,000
Cleaning $850
Finance Costs $1650
Advertising $560
Rent $25,000
Petrol $560
Accountants Fees $370
Maintenance $1405
Bank Fees $210
Office Supplies $600
Creditors:
JRL Holdings $22,626
Innovating Technology Ltd $3,653
LMS Marketing $1,200
Rowlings & Sons $35,622
Holden Greenwright has 3 customers that purchase a large quantity of stock through him
which he delivers to their premises. To keep these customers happy, Ed is providing this
service on credit to the customers listed below. The listed customers have a debt owing to
Ed as listed:
Debtors:
P.L Farthings $1,323
J Smyth & Co $800
L.L Incorporated $356
National Appliances Direct $4,233
Appendix 2 – Australian hardware Ltd Transactions October 2014
sold the following items:
Each sold at:
12 fridges $1600
15 freezers $800
13 microwaves $470
11 Range hoods $190
6 ovens $2100
16 cook tops $560
18 dishwashers $990
22 Vacuums $390
14 Coffee makers $600
25 Toasters $99
5 Irons $156
16 Mixers $89
13 Deep fryers $99
4 Portable A/Cs $350
0 Hairdryers $35
14 Irons $45
14 Scale Sets $24
13 Kettles $78
15 Small Bins $40
7 Large Bins $60
9 Wine coolers $299
5 Washing Machines $340
4 Dryers $330
TOTAL $111837
All Sales for cash
purchased the following items:
Each purchased for:
10 fridges $800 Purchased on credit from JRL
15 freezers $250 Purchased on Credit from JRL
10 microwaves $150
10 Range hoods $80
5 ovens $900
15 cook tops $200
15 dishwashers $450
20 Vacuums $130 Purchased on credit from Innovative Tech
10 Coffee makers $250 Purchased on credit from Innovative Tech
20 Toasters $35
5 Irons $78
15 Mixers $45
10 Deep fryers $45
0 Hairdryers $9
10 Irons $19
10 Scale Sets $12
10 Kettles $34
10 Small Bins $13
5 Large Bins $22
15 Wine coolers $130
5 Washing Machines $220 Purchased on credit from Rowlings
5 Dryers $210
TOTAL $40605
All Invoices paid at time of purchase unless otherwise stated
The following amounts were paid to creditors:
JRL Holdings $5,000
Deliver services were provided on credit to the following:
P.L Farthings $300
J Smyth & Co $150
National Appliances Direct $600 the following was paid in expenses
Electricity $132.50
Gas $50
Water $45.83
Insurance $108.33
Payroll $38750
Cleaning $70.83
Finance Costs $137.50
Advertising $46.67
Rent $2083.33
Petrol $46.67
Accountants Fees $30.83
Maintenance $117.08
Bank Fees $17.50
Office Supplies $ 50
TOTAL EXPENSES $41,752.08
Bank Statement October 2014
1-Oct BALANCE FORWARD $245,000.00 CR
3-Oct Loan Costs (National) $137.50 $244,862.50 CR
4-Oct Telsta Invoice 3365432 $65.00 $244,797.50 CR
5-Oct HLH Electricity $132.50 $244,665.00 CR
6-Oct Ultimate Gas $50.00 $244,615.00 CR
8-Oct Wages $19,375.00 $225,240.00
8-Oct Rent $2,083.33 $223,156.67 CR
9-Oct Cash Deposit $6,000.00 $229,156.67 CR
13-Oct JRL Holdings $5,000.00 $224,156.67 CR
15-Oct Innovative Technology $2,000.00 $222,156.67 CR
22-Oct Cash Withdraw $500.00 $247,493.67 CR
22-Oct Wages $19,375.00 $228,118.67 CR
22-Oct Purchase 11451 $12,620.00 $215,498.67 CR
23-Oct Shell $46.67 $215,452.00 CR
23-Oct Purchase 11452 $8,630.00 $206,822.00 CR
25-Oct Purchase 11453 $1,405.00 $204,917.00 CR
25-Oct LMS Marketing $46.67 $204,870.33 CR
26-Oct Water $45.83 $204,774.50 CR
26-Oct Insurance Direct Debit $108.33 $204,666.17 CR
27-Oct Corporate Cleaning Ltd $70.83 $204,595.34 CR
27-Oct Rowlings & Sons $5,000.00 $199,595.34 CR
28-Oct Fees $17.50 $234,577.84 CR
28-Oct P.L.Harris Repairs $117.08 $234,460.76 CR
29-Oct Yarra Valley $45.83 $234,414.93 CR
30-Oct Office Supplies $50.00 $278,864.93 CR
Appendix 3 – Holden Greenwright Whitegoods Ltd Transactions November 2014
sold the following items:
Each sold at:
8 fridges $1600
10 freezers $800
6 microwaves $470
15 Range hoods $190
5 ovens $2100
18 cook tops $560
18 dishwashers $990
26 Vacuums $390
13 Toasters $99
7 Irons $156
11 Mixers $89
9 Deep fryers $99
2 Hairdryers $35
16 Irons $45
18 Scale Sets $24
14 Kettles $78
14 Small Bins $40
17 Large Bins $60
4 Dryers $330
TOTAL $103136
All Sales for cash
purchased the following items:
Each purchased for:
5 microwaves $150
10 Range hoods $80
5 ovens $900
10 cook tops $200
10 dishwashers $450
10 Toasters $35
5 Irons $78
10 Mixers $45
5 Deep fryers $45
0 Hairdryers $9
15 Irons $19
15 Scale Sets $12
10 Kettles $34
10 Small Bins $13
5 Large Bins $22
5 Wine coolers $130
0 Dryers $210
TOTAL $26910
JRL Holdings $5,000
LMS Marketing $1,200
P.L Farthings $200
J Smyth & Co $350
National Appliances Direct $490
TTNT $336
As of December 2014, Ed gains another valuable customer, TTNT, who he sets up on the same
credit delivery scheme as his other regular customers. The following was paid in expenses
Electricity $132.50
Gas $50
Water $45.83
Insurance $108.33
Payroll $38750
Cleaning $70.83
Advertising $46.67
Rent $2083.33
Petrol $46.67
Maintenance $117.08
Bank Fees $17.50
Bank Statement November 2014
1-Nov BALANCE FORWARD $278,864.93 CR
3-Nov Loan Costs (National) $137.50 $278,727.43 CR
4-Nov Telsta Invoice 3365433 $65.00 $278,662.43 CR
5-Nov HLH Electricity $132.50 $278,529.93 CR
6-Nov Ultimate Gas $50.00 $278,479.93 CR
8-Nov Wages $19,375.00 $259,104.93
8-Nov Rent $2,083.33 $257,021.60 CR
9-Nov Cash Deposit $3,606.00 $260,627.60 CR
13-Nov JRL Holdings $5,000.00 $255,627.60 CR
15-Nov Innovative Technology $2,000.00 $253,627.60 CR
22-Nov Cash Withdraw $500.00 $262,127.60 CR
22-Nov Wages $19,375.00 $242,752.60 CR
22-Nov Purchase 11454 $7,209.00 $235,543.60 CR
23-Nov Shell $46.67 $235,496.93 CR
23-Nov Purchase 11455 $5,695.00 $229,801.93 CR
25-Nov Purchase 11456 $3,656.00 $225,645.93 CR
25-Nov LMS Marketing $1,200.00 $224,445.93 CR
25-Nov LMS Marketing $46.67 $224,399.26 CR
26-Nov Water $45.83 $224,303.43 CR
26-Nov Insurance Direct Debit $108.33 $224,195.10 CR
27-Nov Corporate Cleaning Ltd $70.83 $224,124.27 CR
27-Nov Rowlings & Sons $5,000.00 $219,124.27 CR
28-Nov Fees $17.50 $265,636.77 CR
28-Nov P.L.Harris Repairs $117.08 $265,519.69 CR
29-Nov Yarra Valley $45.83 $265,473.86 CR
30-Nov Office Supplies $50.00 $308,923.86 CR
Appendix 4 – Holden Greenwright Whitegoods Ltd Transactions December 2014
Ed sold the following items:
Each sold at:
16 fridges $1600
15 freezers $800
6 microwaves $470
8 Range hoods $190
8 ovens $2100
14 cook tops $560
14 dishwashers $990
29 Vacuums $390
19 Toasters $99
9 Irons $156
16 Mixers $89
13 Deep fryers $99
1 Hairdryers $35
21 Irons $45
22 Scale Sets $24
19 Kettles $78
31 Small Bins $40
16 Large Bins $60
8 Dryers $330
TOTAL $133860
All Sales for cash
Ed purchased the following items:
Each purchased for:
10 microwaves $150
15 Range hoods $80
10 ovens $900
15 cook tops $200
15 dishwashers $450
20 Toasters $35
10 Irons $78
18 Mixers $45
15 Deep fryers $45
5 Hairdryers $9
25 Irons $19
25 Scale Sets $12
20 Kettles $34
30 Small Bins $13
15 Large Bins $22
10 Dryers $210
TOTAL $55335
JRL Holdings $10,000
P.L Farthings $965
National Appliances Direct $695 the following was paid in expenses
Electricity $132.50
Gas $50
Water $45.83
Insurance $108.33
Payroll $38750
Cleaning $70.83
Advertising $46.67
Rent $2083.33
Petrol $46.67
Maintenance $117.08
Bank Fees $17.50
Bank Statement December 2014
1-Dec BALANCE FORWARD $308,923.86 CR
3-Dec Loan Costs (National) $137.50 $308,786.36 CR
4-Dec Telsta Invoice 3365434 $65.00 $308,721.36 CR
5-Dec HLH Electricity $132.50 $308,588.86 CR
6-Dec Ultimate Gas $50.00 $308,538.86 CR
8-Dec Wages $19,375.00 $289,163.86
8-Dec Rent $2,083.33 $287,080.53 CR
9-Dec Cash Deposit $32,615.00 $319,695.53 CR
13-Dec JRL Holdings $10,000.00 $309,695.53 CR
15-Dec Innovative Technology $4,000.00 $305,695.53 CR
22-Dec Cash Withdraw $500.00 $363,760.53 CR
22-Dec Wages $19,375.00 $344,385.53 CR
22-Dec Purchase 11457 $9,643.00 $334,742.53 CR
23-Dec Shell $46.67 $334,695.86 CR
23-Dec Purchase 11458 $11,555.00 $323,140.86 CR
25-Dec Purchase 11459 $11,287.00 $311,353.86 CR
25-Dec LMS Marketing $46.67 $310,707.19 CR
26-Dec Water $45.83 $310,611.36 CR
26-Dec Insurance Direct Debit $108.33 $310,503.03 CR
27-Dec Corporate Cleaning Ltd $70.83 $310,432.20 CR
27-Dec Rowlings & Sons $8,600.00 $301,832.20 CR
28-Dec Fees $17.50 $322,466.70 CR
28-Dec P.L.Harris Repairs $117.08 $322,349.62 CR
29-Dec Yarra Valley $45.83 $322,303.79 CR
30-Dec Office Supplies $50.00 $343,781.79 CR
Following research on market trends and consumer confidence, as well as inflation and other
factors, Ed has provided you with the following set of assumptions for the 2015 business year.
1. Purchase cost of goods is set to rise by 5%
2. Decreased consumer confidence means that sales are expected to decrease by 12%
3. Ed believes he can increase his sale prices by 8% which should have minimal impact on
overall sales, perhaps reducing total sales by a further 3%
4. Ed plans on reducing his expenses by laying off one of his part time staff members who has a
yearly salary of $47,000. This is hoped to have only minimal impact on productivity
Assessment task 3
The following is a review and analysis of three financial software that the business could use,
including the advantages and disadvantages of each. The software packages reviewed are xero,
QuickBooks and MYOB.
XERO
Package overview Xero is the market leader for online accounting
software in Australia. The company boasts
147,000 Australian customers as of September
2014. An increase of a whopping 96% from the
same time in 2013. Xero is a purely cloud-
based accounting platform that focuses on
eliminating inefficiencies in the accounting
process and enabling greater collaboration
between team members. Many manual
processes that require calculators, ledgers
and/or a great deal of effort are no longer
necessary. For example, xero automatically
pulls data from bank feeds, reconciling and
categorizing transactions in seconds
Price Starter Plan: $25/month, limited team users,
transactions, invoices and bills
Standard plan: $50/month, includes up to five
team members and unlimited transactions,
invoices and bills
Pros and cons Pros:
Increased Efficiency: Xero reduces time
wasted on manual accounting because it allows
for access from any location and automates
time-consuming, manual activities.
Effective Collaboration: Organisations using
Xero can invite users to collaborate on real-
time financial data, reducing bottlenecks and
ensuring effective group effort.
Security: Cyber threats are intensifying with
each passing year, Xero helps organisations
strengthen their security measures, providing
enterprise-grade technology to protect them
from unauthorized access and system failures.
Cons:
Limited stock control features
Potential security threats/unscheduled
downtime ( hackers)
Reliance upon the internet.
MYOB
Package overview MYOB has a powerful cloud accounting
saluting. The company boasts over 100,000
online customers with their cloud product
accounting for 70% of their business. Similar
to other cloud accounting solutions, MYOB’s
offering lets you automate manual tasks, but
does run slower than other solutions
Price MYOB Essentials starts from $29/month (basic
and simple)
MYOB Account right starts from $43/month
(more features like stock tracking and billing)
Pros and cons Pros:
Anytime, anywhere access: Cloud accounting
gives employees the ability to work on
organizational content from anywhere, using
any device. The eliminates productivity
roadblocks when traveling, while onsite with a
client or at home.
Reduced costs: Hardware, operating systems
and accounting fees can quickly exhaust a solid
budget. MYOB’s cloud offering reduces
financial and operational expenditure.
When organizations use MYOB’s cloud
offering, instead of needing upfront capital,
organisations pay a monthly fee. This
eliminates the ongoing costs of maintenance,
updates and backups. Additionally, server
failures, hardware upgrades and other technical
issues are no longer the company’s problem.
Cons :
A major concern for cloud accounting systems
like MYOB is date security, with 46% of
Software Advice’s survey respondents stating
security is the top concern. This is because
online content may be vulnerable to hackers,
fraud and other threats. However, MYOB
invests heavily in security architecture and
design and in implementing industry best
practices. Not many organizations can afford
this level of security, including secure user
access controls and approval processes.
MYOB is not novice friendly. An
organisation’s workforce must be trained on
the software to avoid employees continuing
with inefficient manual processes.
QuickBooks
Package overview QuickBooks online is the cloud accounting
product developed by Intuit. Quickbooks
online has seen a lot of success in the United
States, but certainly doesn’t have the market
penetration like Xero or MYOB in Australia.
Price Quickbooks online simple start product is
$15/month
Quickbooks online essentials product is
$25/month (manage bills, automate invoicing,
currency conversion)
Quickbooks online plus product is $35/month (
tract inventory, create budgets, compare
business performance)
Note: Quick books online frequently offers
special pricing-you should be able demand 15-
30% off regular pricing
Pros and cons Pros:
Quickbooks online provides centralized access
to information, updated in real time.
Unsurprisingly, a survey by Quickbooks found
83% of Quickbooks online users called this
their favorite feature.
Automatic syncing occurs across desktops,
tablets and phones, propagating changes to
data throughout the system. For example,
changing the sales tax rate in one place updates
all sales records.
Quickbooks online also integrates well with
other programs like Microsoft Excel and
Acrobat Reader.
Security: QuickBooks online uses security
technologies most organizations couldn’t
afford on their own. This includes the same
data-encryption technology as leading banks,
firewall software, security personnel and
automatic backups. Also, the activity log below
shows all user and third-party activity,
including user log-ins, editing of accounts and
items, bank transactions downloads and more.
A team of technical experts monitors the
network in real time, ensuring organizational
content is completely protected from online
threats.
Cons:
Quickbooks online carriers a history of
unscheduled outages. One of the worst
instances occurred in 2012 on the Friday
before the corporate tax deadline, resulting in
angry users without access to accounts the
entire day.
Quickbooks online is designed for ease of use
over breadth of features. Therefore, it doesn’t
have all the accounting methodologies some
accountants require to perform certain
analyses. Other limitations include the number
of products an organization can offer.
Organizations looking for a more extensive
range of features can pay a one-time fee for the
desktop version.

BSBFIM601 Manage Finances

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PROFIT BUDGET 2015/16 ($) 2014/10 2014/11 2014/12

Revenue - 20% 24% 26%

Sales 16,971,237 3,394,247 4,073,097 4,412,522

– Cost of Goods Sold 9,673,605 1,934,721 2,321,665 2,515,137

Gross Profit 7,297,632 1,459,526 1,751,526 1,897,384

Gross Profit % 43% 43% 43%

– Accounting Fees 10,000 2,500 2,500 2,500

– Interest Expense 84,508 21,127 21,127 21,127

– Bank Charges 1,600 400 400 400

– Depreciation 170,000 42,500 42,500 42,500

– Insurance 13,390 3,348 3,348 3,348

– Store Supplies 3,749 750 900 975

– Advertising 350,000 200,000 50,000 50,000

– Cleaning 16,282 3,256 3,908 4,233

– Repairs & Maintenance 64,272 16,068 16,068 16,068

– Telephone 14,997 2,999 3,599 3,899

– Electricity Expense 26,780 5,356 6,427 6,963

– Fringe Benefits Tax 28,000 7,000 7,000 7,000

– Superannuation 187,020 37,404 44,885 48,625

– Wages & Salaries 2,078,000 415,600 498,720 540,280

– Payroll Tax 98,705 19,741 23,689 25,663

– Workers’ Compensation 41,560 8,312 9,974 10,806

Total Expenses 5,841,371 1,458,488 1,395,172 1,444,514

Net Profit (Before Tax) 1,456,261 1,038 356,260 452,871

Income Tax 436,878 311 106,878 135,861

Net Profit 1,019,383 727 249,382 317,009

SALES 2014/15 ($) 2014/10 2014/11 2014/12

BUDGET Total Budget 20% 24% 26%

Total Sales 16,971,237 3,394,247 4,073,097 4,412,522

GST Cash flow analysis

GST Collected 1,697,124 339,425 407,310 441,252

Less GST Paid 12,281,358 282,913 306,854 326,325

GST Payable 415,765 56,512 100,456 114,927

Aged Debtors budget

AGED TOTAL 2014/10 2014/11 2014/12

Sales 348833 111837 103136 133860

% Debtors Sales 20% 20% 20%

Total Debtors 100% 678,849 814,619 882,504

Current 84% 570,234 684,280 741,304

30 Days 10% 67,885 81,462 88,250

60 Days 5% 33,942 40,731 44,125

90 Days 1% 6,788 8,146 8,825

Total cash on hand $647,017.68

Total current assets $647,017.68

Property, plant and equipment

Total timber equipment $70,000.00

Office equipment at cost $40,000.00

Total property, plant and equipment $90,000.00

Total Assets $737,017.68

GST collected ($109,090.92)

Total GST liabilities ($34,727.32)

Total payroll liabilities ($24,000.00)

Total current liabilities ($58,727.32)

Total long-term liabilities $200,000.00

Total liabilities $141,272.68

Net Assets $595,745.00

Total cost of sales $610,000.00

Gross Profit $590,000.00

Total employment expenses $138,960.00

Total Expenses $397,660.00

Operating Profit $192,340.00

Total other expenses $38,400.00