Recent Question/Assignment

Details of Assessment
Term and Year 1, 2017 Time allowed 8 weeks
Assessment No 2 Assessment Weighting 40%
Assessment Type Assignment
Due Date Week No. 2 Room TBA
Details of Subject
Qualification BSBFIM501 Diploma of Leadership and Management
Subject Name Managing Finance
Details of Unit(s) of competency
Unit Code (s) and Names BSBFIM501A Manage Budgets and Financial Plans
Details of Student
Student Name
College Student ID
Student Declaration: I declare that the work submitted is my own, and has not been copied or plagiarised from any person or source. Signature: ___________________________
Date: _______/________/_______________
Details of Assessor
Assessor’s Name Nadia Chowdhury
Assessment Outcome
0Satisfactory 0Not Satisfactory
Marks / 40
Progressive feedback to students, identifying gaps in competency and comments on positive improvements:
Student Declaration: I declare that I have been assessed in this unit, and I have been advised of my result. I also am aware of my appeal rights and reassessment procedure.
Signature: ____________________________
Date: ____/_____/_____ Assessor Declaration: I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedback
0Student did not attend the feedback session.
Feedback provided on assessment.
Signature: ____________________________
Date: ____/_____/_____

Purpose of the Assessment
The purpose of this assessment is to assess the student in the following learning outcomes: Satisfactory
(S) Not yet Satisfactory
Plan financial management approaches
Implement financial management approaches
Monitor and control finances
Review and evaluate financial management processes
Assessment/evidence gathering conditions
Each assessment component is recorded as either Satisfactory (S) or Not Satisfactory (NS). A student can only achieve competence when all assessment components listed under Purpose of the assessment section are Satisfactory. Your trainer will give you feedback after the completion of each assessment. A student who is assessed as NS (Not Satisfactory) is eligible for re-assessment.
Resources required for this Assessment
• Upon completion, submit the assessment to your trainer along with assessment coversheet
• Refer to the subject notes on E-Learning prior to responding to the tasks/questions
• Any additional material will be provided by Trainer
Instructions for Students
Please read the following instructions carefully
• This assessment has to be completed 1 In class 0 At home
• The assessment is to be completed according to the instructions given by your assessor.
• Feedback on each task will be provided to enable you to determine how your work could be improved. You will be provided with feedback on your work within 2 weeks of the assessment due date. All other feedbacks will be provided by the end of the term.
• Should you not answer the questions correctly, you will be given feedback on the results and your gaps in knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be deemed competent for this unit of competency.
• If you are not sure about any aspects of this assessment, please ask for clarification from your assessor.
• Please refer to the College re-assessment and re-sit policy for more information.
Question 1: Metropolitan Furniture (10 mark)
Peter works in the accounts unit of the Metropolitan Furniture Manufacturing. He was asked to prepare a proposed budget for the forthcoming quarter. He consults with the sales manager and finds that:
Estimated sales are as follows:
February $265,000 April $290,000
March $255,000 May $250,000
June $280,000
In consultation with the production manager he estimates that the cost of goods sold is to be budgeted at 45% of the sales figure. The salaries are expected to be $65,000 per month. When sales exceed $260,000 in any one month, the sales team is entitled to an additional 5% commission on the excess sales over this figure. Other expenses are estimated to be $35,000 per month.
The owner of the organisation is concerned about the cash flow which was not thought of before. The owner is of the opinion that the collection of cash from sales is slow and this could possibly lead to cash flow problems to the organisation. As Peter has never forecasted cash flow before he sets about collecting information on this.
Peter estimates that 80% of the total sales are going to be cash sales where the bill is settled when the goods are purchased or delivered. 10% of the month’s sales settle the accounts owed in the month following sales. Others (i.e. 10% of the month’s sales) settle in the month after.
Additional information for Cash Flow Statement:
The organisation gets a month’s credit on its purchases. That is, the accounts for the purchases (COGS) made in one month is settled in the following month.
? All salaries are paid in the month as they are incurred.
? The additional commission is paid in the month after the month in which it was earned.
? Other expenses are paid in the month they were incurred.
? The bank balance at the beginning of the first month is estimated to be $40,000.

1. Show the profit and loss calculations for the April, May and June
2. Show the cash flow projection calculations for April, May and June
3. What Peter is required to advise the owner of the organisation?
4. Will the business adequate financial provision to pay tax? Why?
5. If the cash flow statement and the P & L are productive, then what are the relevant people Peter needs to communicate if he establishes a business plan?
6. If the P & L showing good profit trend and the forecasted cash flow statement returns positive results, then marketing and operational departments may tend to expand theirbudget and therefore the business may have cash shortage in future. How Peter can monitor financial performance on a continuous basis?
7. Does Peter require advising the owner about any immediate change in the financial plan? Why?
Answer (1):
Profit and Loss calculations
April May June
$ $ $
Less Cost of Goods Sold
Gross Profit
Sales Salaries
Other expenses
Total expenses
Net Profit
Answer (2):
Cash flow projections
April May June
$ $ $
Opening Cash
Plus cash in:
This month
From last month
From two months ago
Total Cash available
Lesscash out:
other expenses
Total cash out
Closing cash balance
Answer (3):
Answer (4):
Answer (5):
Answer (5):
Answer (6):
Answer (7):
Question 2: Preparation of Cash Flow Statement (10 mark)
Calculate the total cash inflows and cash outflows and the net cash position at the end of December from the following information:
Use the space provided and show all line items.
XYZ Pty Ltd.
December 2012
Particulars Amount $
Cash receipts from customers 245,000
Cash paid to suppliers and employees 101,570
Interest paid 24,120
Income tax paid 25,910
Purchase of Subsidiary X, net of cash acquired 450000
Purchase of property, plant and equipment 350,100
Proceeds from sale of equipment 120,000
Interest received 22,550
Dividends received 25,654
Proceeds from issue of share capital 250,000
Proceeds from long-term borrowings 250,000
Payment of finance lease liabilities 50,000
Dividends paid 25,700
Cash and cash equivalents at beginning of period 530,750
Instruction for the students:
• Regular inflow and outflow is recorded under operating activities
• Cash inflow and outflow related to non-current assets are recorded under investment activities
• Cash inflow and outflow related to interest bearing transactions are recorded under financing activities.
• For each section add the inflows and then deduct the outflow.
Operating activities: $ Net Cash flow

Investment activities:
Financing activities:
Total Cash surplus/deficit
Cash and cash equivalent at the beginning of the year
Cash and cash equivalent at the end of the year
Question 3: GST and Cash Flow Statement (10 mark)
A company forecasts the following transactions during the next financial year which willaffect its
cash flow. (All ATO dues and ATO credits are expected to be settled during theyear.)
Cash sales, 10% GST not included
Credit sales for year, including 10% GST
Cash receipts in respect of credit sales — budget year
Cash receipts in respect of credit sales — previous year
Cash purchases, 10% GST not included
GST payable to ATO
GST input credit from ATO
Other payments, including 10% GST 90 000
186 000
150 000
11 000
80 000
10 000
20 000
110 000
44 000
Prepare a budgeted cash flow statement assuming that the opening bank balance was $30,200.
Cash Receipts: $ $
Cash sales
GST receipts on cash sales
Credit sales - budget year
Credit sales - previous year
Total Cash receipts
Cash Payments:
GST payments on cash purchases
Net GST payable to ATO
Other payments
Total Cash Payments:
Cash surplus/(deficit)
Opening bank balance
Closing bank balance

Question 4: Cash Flow Statement (10 mark)
Suppose, a business estimated its 3rd quarter cash collection i.e. $500,000 and during that time its cash payment for purchase is going to be $340,000, other expenses 150,000. The business will also have to pay back its previous loan of $100,000. The business estimated its cash balance at the beginning of the quarter 50,000 and it desires to maintain a cash balance of 60, 000 at the end.
Required: Calculate how much finance it needs to maintain the closing cash balance. (i.e. how much cash it needs to borrow)
Cash Receipts: $ $

Total Cash receipts
Cash Payments:
Total Cash Payments:
Cash surplus/(deficit)
Opening bank balance
Total Cash available before borrowing from lender
Money required to be borrowed to arrive at closing balance
Closing bank balance 60,000

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