BSBFIM601 Manage finances. ASSESSMENT 1: Assignment

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1 BSB61015 Advanced Diploma of Leadership and Management BSBFIM601 Manage finances ASSESSMENT 1: Assignment Student s Name Student No Student Declaration Student s Signature I declare that the work submitted is my own. It has not been copied or plagiarised from any other person or source. Date Submitted Apex Institute of Education Page 1 of 23

2 Assessor use only BSBFIM601 Manage finances Assignment Marking Guide Checklist Did the student: Links to Performance Criteria Satisfactory Not Satisfactory Access required information from supervisor and discussed and reviewed relevant information including financial data previous profit and loss cash flow trends Statutory requirements for compliance and liabilities for tax software and its suitability for financial management Generate budget and financial statement following set procedures and adhering to Australian accounting standards including: Sales forecast, taking into account additional information Estimated expenses / inventory costs Estimated profits Conduct role-play meeting with financial specialist to discuss financial aspects of the budget / financial plans 1.1,1.2, 1.3,1.4, ,2.2, Develop procedure for risk management and contingency planning 3.2,3.3, 3.4,3.5 Develop and submit the following: revised budget budget assessment report feasibility report 4.1,4.2, 4.3,4.4 Prepare the research report on commercially available softwares 1.6 Result: Satisfactory Not Satisfactory Assessor signature: Date: Feedback to student: Apex Institute of Education Page 2 of 23

3 GENERAL INFORMATION ABOUT ASSESSMENT Please read the following carefully Assessments are to be completed according to the instructions provided in the assessment document. Your trainer-assessor will go through the instructions with you. Assignments (e.g. projects) are to be completed at home, in your own time. If you are not sure about any aspect of an assessment, ask your trainer/assessor to explain the requirements. All parts of each assessment (questions and/or tasks) must be answered unless the individual assessment instructions tell you something different. You need to complete, sign and date the front page and attach it to your assignment. All assignments must be typed in 12 point type on A4 paper Make sure you keep a photocopy of your assignment before you hand it in. All assignments must be your own work your own words. All quotes from reference sources (e.g. books and websites) must be acknowledged and listed at the end of your assignment. You must also ensure that the information you provide in assessment evidence must be current i.e. recent enough. Group or Team Work: In some cases, you will be required to work on a project in small groups, and your trainer will allocate you to a group to work as a team. You may even be allocated a particular role. If you are working as part of a group, you will still be required to submit your assessment individually, and your performance will be assessed on an individual basis. Therefore, you must keep and submit with your assignment a record of the specific contribution you have made to the project, as well as keep notes of team meetings to include in your final submission. If you are unable to submit any assignment by the due date, you need to discuss this with your trainer/assessor beforehand and obtain an extension of time. If you do not follow the above rules, you may need to be re-assessed. Please remind your trainer of any special needs you may have. Where possible reasonable adjustment to the assessment will be made, provided that does not affect the validity of the assessment. After you have completed an assessment, your assessor will give you feedback about your performance and tell you whether the result is satisfactory or not satisfactory (that is, your trainer /assessor considers you need more training and experience). If your performance is not satisfactory, you will be advised about any gaps in your knowledge or skills and given an opportunity to be re-assessed. If you think the assessment process was flawed, you may appeal against the assessment decision. After you have completed all the assessments for a unit (or group of units in some cases), you will be awarded C (Competent) if the assessor is satisfied you have provided enough appropriate evidence to meet all criteria. If you are unable to meet this requirement, you will receive the result NYC (Not Yet Competent). If you are deemed Not Yet Competent by your trainer /assessor and require reassessment, you will be informed of the process. Apex Institute of Education Page 3 of 23

4 BSBFIM601 ASSESSMENT INFORMATION You need to complete two assessments for this unit of competency. Details are provided below. Assessment Number ASSESSMENT 1: Assignment Your trainer will give you this during the first classroom session for this unit of competency, together with any other relevant information required to complete the assessment. You are required to submit the assessment in the last week of class for the unit. Your trainer will tell you the due date during the first classroom session. Assessment Task This assessment is based on a case study of EDs Whitegoods provided in the additional information section of this assessment ASSESSMENT 2: Written Exam During the last week of classes for this unit, you will be required to do an exam covering the content of the unit. During the first classroom session for the unit, your trainer will tell you the date of the exam. This is a 2 hour exam that you will complete in class under your trainer-assessor s supervision. You are allowed to refer to your class notes and other resources. Apex Institute of Education Page 4 of 23

5 Assessment 1 Project This assessment project is to be completed in addition to the learning and assessment activities you complete in class. The project is designed to assess the knowledge and skills required to undertake budgeting, financial forecasting and reporting and to allocate and manage resources to achieve the required outputs for the business unit. It includes contributing to financial bids and estimates, allocating funds, managing budgets and reporting on financial activity. If you are not sure about any aspect of the assessment or would like to discuss your particular needs, please speak to your trainer. Your trainer will tell you the date you need to submit your assignment. All parts of the project will be given to you at the same time. You need to complete all parts and submit them together by the due date. This will be in the last week of classes for the unit. This project assignment is to be completed using the information provided under Appendix 1-5. The checklist and scope of submission table will identify the records that you are required to prepare and submit (as a single submission). Your assignment must be typed (in 12 point type on A4 paper) and attached to the front page of this assessment document, which you need to complete as an Assessment Cover Page. Make sure you keep a copy of your assignment before you hand it in to your trainer. Apex Institute of Education Page 5 of 23

6 Part 1. Task 1 For this part, students are to utilise the data in the Appendices regarding Ed s Whitegoods. The instructor can role-play the part of Edward Tan, the proprietor and will give any additional information required, including company policies and procedures, milestones etc. Students are to undertake the following: List all personnel you would consult with in order to gain adequate advice prior to commencing your reports. Consult with your instructor to determine management requirements Prepare a 1-year budget & projected financial statement including: - Sales forecast, taking into account additional information in Appendix 5 - Estimated expenses / inventory costs - Estimated profits Ensure report layout and format comply with management information requirements, are clear and error-free Note: Students must use spreadsheet to undertake this task. Students must ensure that estimates of future cash flow, costs and revenues are realistic in context of the available information at the time of creating the budget. Changes in circumstances should be anticipated as best as possible with particular emphasis on financial risks and creating protection strategies in accordance with organisational procedures. Any liaison with the proprietor of the business to determine milestones, policies, goals etc. should be carried out with your instructor, who will role play the relevant parts. Task 2 Now you are to take your completed budget and arrange an appointment with your assessor, who will role-play a finance specialist. In this meeting, you are to Manage the meeting direction and progress Discuss with the finance specialist the aspects of your budgets / financial plans (the package) Review and ensure to validate your reasons and proposals Amend / revise your package as appropriate You must now: Detail in writing all delegations and budget accountabilities for implementation and management of your package Apex Institute of Education Page 6 of 23

7 Develop a written procedure that details the recording systems and documentation process you will follow for monitoring and controlling all activities against your plans. Develop a risk management and contingency plan for all your proposed financial plans; along with a policy and procedure to be followed when implementing these plans Develop a policy and procedure that outlines proper maintenance of records of financial performance and provides for evaluation of the effectiveness of your financial management process Part 1. Checklist and Scope of Submission Before you hand in part 1, use the checklist below to make sure you have completed all the tasks and have included all the relevant information. I have: Developed and submitted annual budget Detailed all delegations and budget accountabilities for implementation and management of proposal Developed a plan and policy and procedure for risk management and contingency Developed a policy and procedure for proper maintenance of records Part 2. Task 1 You are required to compare their budgeted figures against actual figures located below: Ed s Whitegoods 1 year result: Total Sales: $1,623,000 Total Purchases: $701,400 Total Expenses: $402,000 You are to undertake the following: Prepare a variance analysis between budgeted and actual figures Ensure report demonstrates major differences What was the discrepancy? - Is the discrepancy a positive or negative one? - Locate the area and give at least 5 reasons why the discrepancy may have occurred Utilise the data provided to determine the effectiveness of the cost budgeting techniques used Lastly, you should give recommendations as to how their variance may be corrected for future budgets for the business. The variance report should be submitted along with a written report detailing answers to the above questions. Apex Institute of Education Page 7 of 23

8 Part 2. Checklist and Scope of Submission Before you hand in these assessment tasks, use the checklist below to make sure you have completed all the tasks and have included all relevant information. I have: developed and submitted the following o revised budget o budget assessment report o feasibility report Part 3. Task 1 For this task you are to identify and evaluate a minimum of 3 commercially available financial management software for its appropriateness within your actual or projected business. You need to consider 1. Price 2. Usability 3. Features and functions 4. Compatibility with other programs 5. Compatibility with other specialists Provide your review in the form of a written report, making a recommendation on the most suitable product for you. Be sure to explain your approach, including the pros and cons of each product evaluated Part 3. Checklist and Scope of Submission Before you hand in these assessment tasks, use the checklist below to make sure you have completed all the tasks and have included all relevant information. I have: Prepared and submitted the research report. Apex Institute of Education Page 8 of 23

9 Appendix 1 Big Ed s Whitegoods Ltd Edward Tan owns a medium sized whitegoods retail store. He provides you with the following information which is current as of 1 October 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 Ed 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 Apex Institute of Education Page 9 of 23

10 Appendix 2 Big Ed s Whitegoods Ltd Transactions October 2014 Ed sold the following items: Each sold at: 12 fridges $ freezers $ microwaves $ Range hoods $190 6 ovens $ cook tops $ dishwashers $ Vacuums $ Coffee makers $ Toasters $99 5 Irons $ 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 $ All Sales for cash Apex Institute of Education Page 10 of 23

11 Ed 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 $ Range hoods $80 5 ovens $ cook tops $ dishwashers $ 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 Portable A/Cs $180 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 Innovating Technology Ltd $2,000 Rowlings & Sons $5,000 Deliver services were provided on credit to the following: P.L Farthings $300 J Smyth & Co $150 L.L Incorporated $362 National Appliances Direct $600 Apex Institute of Education Page 11 of 23

12 The following was paid in expenses Phone Service / Calls $65 Electricity $ Gas $50 Water $45.83 Insurance $ Payroll $38750 Cleaning $70.83 Finance Costs $ Advertising $46.67 Rent $ Petrol $46.67 Accountants Fees $30.83 Maintenance $ Bank Fees $17.50 Office Supplies $ 50 TOTAL EXPENSES $41, Apex Institute of Education Page 12 of 23

13 Bank Statement October Oct BALANCE FORWARD $245, CR 3-Oct Loan Costs (National) $ $244, CR 4-Oct Telsta Invoice $65.00 $244, CR 5-Oct HLH Electricity $ $244, CR 6-Oct Ultimate Gas $50.00 $244, CR 8-Oct Wages $19, $225, Oct Rent $2, $223, CR 9-Oct Cash Deposit $6, $229, CR 13-Oct JRL Holdings $5, $224, CR 15-Oct Innovative Technology $2, $222, CR 17-Oct Cash Deposit $25, $247, CR 22-Oct Cash Withdraw $ $247, CR 22-Oct Wages $19, $228, CR 22-Oct Purchase $12, $215, CR 23-Oct Shell $46.67 $215, CR 23-Oct Purchase $8, $206, CR 25-Oct Cash Withdraw $ $206, CR 25-Oct Purchase $1, $204, CR 25-Oct LMS Marketing $46.67 $204, CR 25-Oct Cash Withdraw $50.00 $204, CR 26-Oct Water $45.83 $204, CR 26-Oct Insurance Direct Debit $ $204, CR 27-Oct Corporate Cleaning Ltd $70.83 $204, CR 27-Oct Rowlings & Sons $5, $199, CR 27-Oct Cash Deposit $35, $234, CR 28-Oct Fees $17.50 $234, CR 28-Oct P.L.Harris Repairs $ $234, CR 29-Oct Yarra Valley $45.83 $234, CR 30-Oct Cash Deposit $45, $279, CR 30-Oct Cash Withdraw $ $278, CR 30-Oct Office Supplies $50.00 $278, CR Apex Institute of Education Page 13 of 23

14 Appendix 3 Ed s Whitegoods Ltd Transactions November 2014 Ed sold the following items: Each sold at: 8 fridges $ freezers $800 6 microwaves $ Range hoods $190 5 ovens $ cook tops $ dishwashers $ Vacuums $ Coffee makers $ Toasters $99 7 Irons $ Mixers $89 9 Deep fryers $99 6 Portable A/Cs $350 2 Hairdryers $35 16 Irons $45 18 Scale Sets $24 14 Kettles $78 14 Small Bins $40 17 Large Bins $60 10 Wine coolers $ Washing Machines $340 4 Dryers $330 TOTAL $ All Sales for cash Apex Institute of Education Page 14 of 23

15 Ed purchased the following items: Each purchased for: 5 fridges $800 Purchased on credit from JRL 5 freezers $250 Purchased on Credit from JRL 5 microwaves $ Range hoods $80 5 ovens $ cook tops $ dishwashers $ Vacuums $130 Purchased on credit from Innovative Tech 10 Coffee makers $250 Purchased on credit from Innovative Tech 10 Toasters $35 5 Irons $78 10 Mixers $45 5 Deep fryers $45 5 Portable A/Cs $180 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 Washing Machines $220 Purchased on credit from Rowlings 0 Dryers $210 TOTAL $26910 All Invoices paid at time of purchase unless otherwise stated The following amounts were paid to creditors: JRL Holdings $5,000 Innovating Technology Ltd $2,000 LMS Marketing $1,200 Rowlings & Sons $5,000 Deliver services were provided on credit to the following: P.L Farthings $200 J Smyth & Co $350 L.L Incorporated $462 National Appliances Direct $490 TTNT $336 Apex Institute of Education Page 15 of 23

16 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 Phone Service / Calls $65 Electricity $ Gas $50 Water $45.83 Insurance $ Payroll $38750 Cleaning $70.83 Finance Costs $ Advertising $46.67 Rent $ Petrol $46.67 Accountants Fees $30.83 Maintenance $ Bank Fees $17.50 Office Supplies $ 50 TOTAL EXPENSES $41, Apex Institute of Education Page 16 of 23

17 Bank Statement November Nov BALANCE FORWARD $278, CR 3-Nov Loan Costs (National) $ $278, CR 4-Nov Telsta Invoice $65.00 $278, CR 5-Nov HLH Electricity $ $278, CR 6-Nov Ultimate Gas $50.00 $278, CR 8-Nov Wages $19, $259, Nov Rent $2, $257, CR 9-Nov Cash Deposit $3, $260, CR 13-Nov JRL Holdings $5, $255, CR 15-Nov Innovative Technology $2, $253, CR 17-Nov Cash Deposit $9, $262, CR 22-Nov Cash Withdraw $ $262, CR 22-Nov Wages $19, $242, CR 22-Nov Purchase $7, $235, CR 23-Nov Shell $46.67 $235, CR 23-Nov Purchase $5, $229, CR 25-Nov Cash Withdraw $ $229, CR 25-Nov Purchase $3, $225, CR 25-Nov LMS Marketing $1, $224, CR 25-Nov LMS Marketing $46.67 $224, CR 25-Nov Cash Withdraw $50.00 $224, CR 26-Nov Water $45.83 $224, CR 26-Nov Insurance Direct Debit $ $224, CR 27-Nov Corporate Cleaning Ltd $70.83 $224, CR 27-Nov Rowlings & Sons $5, $219, CR 27-Nov Cash Deposit $46, $265, CR 28-Nov Fees $17.50 $265, CR 28-Nov P.L.Harris Repairs $ $265, CR 29-Nov Yarra Valley $45.83 $265, CR 30-Nov Cash Deposit $44, $309, CR 30-Nov Cash Withdraw $ $308, CR 30-Nov Office Supplies $50.00 $308, CR Apex Institute of Education Page 17 of 23

18 Appendix 4 Ed s Whitegoods Ltd Transactions December 2014 Ed sold the following items: Each sold at: 16 fridges $ freezers $800 6 microwaves $470 8 Range hoods $190 8 ovens $ cook tops $ dishwashers $ Vacuums $ Coffee makers $ Toasters $99 9 Irons $ Mixers $89 13 Deep fryers $99 8 Portable A/Cs $350 1 Hairdryers $35 21 Irons $45 22 Scale Sets $24 19 Kettles $78 31 Small Bins $40 16 Large Bins $60 16 Wine coolers $ Washing Machines $340 8 Dryers $330 TOTAL $ All Sales for cash Apex Institute of Education Page 18 of 23

19 Ed purchased the following items: Each purchased for: 10 fridges $800 Purchased on credit from JRL 10 freezers $250 Purchased on Credit from JRL 10 microwaves $ Range hoods $80 10 ovens $ cook tops $ dishwashers $ Vacuums $130 Purchased on credit from Innovative Tech 25 Coffee makers $250 Purchased on credit from Innovative Tech 20 Toasters $35 10 Irons $78 18 Mixers $45 15 Deep fryers $45 10 Portable A/Cs $180 5 Hairdryers $9 25 Irons $19 25 Scale Sets $12 20 Kettles $34 30 Small Bins $13 15 Large Bins $22 15 Wine coolers $ Washing Machines $220 Purchased on credit from Rowlings 10 Dryers $210 TOTAL $55335 All Invoices paid at time of purchase unless otherwise stated The following amounts were paid to creditors: JRL Holdings $10,000 Innovating Technology Ltd $4,000 Rowlings & Sons $8,600 Deliver services were provided on credit to the following: P.L Farthings $965 L.L Incorporated $332 National Appliances Direct $695 Apex Institute of Education Page 19 of 23

20 The following was paid in expenses Phone Service / Calls $65 Electricity $ Gas $50 Water $45.83 Insurance $ Payroll $38750 Cleaning $70.83 Finance Costs $ Advertising $46.67 Rent $ Petrol $46.67 Accountants Fees $30.83 Maintenance $ Bank Fees $17.50 Office Supplies $ 50 TOTAL EXPENSES $41, Apex Institute of Education Page 20 of 23

21 Bank Statement December Dec BALANCE FORWARD $308, CR 3-Dec Loan Costs (National) $ $308, CR 4-Dec Telsta Invoice $65.00 $308, CR 5-Dec HLH Electricity $ $308, CR 6-Dec Ultimate Gas $50.00 $308, CR 8-Dec Wages $19, $289, Dec Rent $2, $287, CR 9-Dec Cash Deposit $32, $319, CR 13-Dec JRL Holdings $10, $309, CR 15-Dec Innovative Technology $4, $305, CR 17-Dec Cash Deposit $58, $364, CR 22-Dec Cash Withdraw $ $363, CR 22-Dec Wages $19, $344, CR 22-Dec Purchase $9, $334, CR 23-Dec Shell $46.67 $334, CR 23-Dec Purchase $11, $323, CR 25-Dec Cash Withdraw $ $322, CR 25-Dec Purchase $11, $311, CR 25-Dec Cash Withdraw $ $310, CR 25-Dec LMS Marketing $46.67 $310, CR 25-Dec Cash Withdraw $50.00 $310, CR 26-Dec Water $45.83 $310, CR 26-Dec Insurance Direct Debit $ $310, CR 27-Dec Corporate Cleaning Ltd $70.83 $310, CR 27-Dec Rowlings & Sons $8, $301, CR 27-Dec Cash Deposit $20, $322, CR 28-Dec Fees $17.50 $322, CR 28-Dec P.L.Harris Repairs $ $322, CR 29-Dec Yarra Valley $45.83 $322, CR 30-Dec Cash Deposit $22, $344, CR 30-Dec Cash Withdraw $ $343, CR 30-Dec Office Supplies $50.00 $343, CR Apex Institute of Education Page 21 of 23

22 Appendix 5 Ed s Whitegoods Ltd Assumptions for 2015 financial year 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, however a decrease Appendix 6 Ed s Whitegoods Ltd Historic Data 2015 Business Year Total Sales: Total Purchases: Total Expenses: Jan - September 2014 Total Sales: Total Purchases: Total Expenses: Apex Institute of Education Page 22 of 23

23 BSBFIM601 Manage finances - Observation Checklist for Role-Play Student No & Name Satisfactory Did the student do the following? Yes No Adhere to the principles of double entry accounting Assessor s Notes Demonstrate skills in accrual accounting Gather and verified all data effectively When undertaking the role-play: Communicate professionally Explain proposed budgets effectively Validate reasons and proposals thoroughly Detailed all delegations and budget accountabilities for implementation and management of proposal Assessor s name Assessor s signature Date Apex Institute of Education Page 23 of 23