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BSBFIM601 Manage finances
Assessment 1: Prepare budgets
Candidate’s Name Hugo Lima Brasilino
Submission Details
This assessment task is to be submitted online by the due date specified by your Trainer/Assessor and
Assessment Plan for this unit of competency. Your assessor must approve any variations to this
arrangement in writing.
Specifications below
Identifying the Unit, Assessment Number, student name, student number, date and page number
(preferably) in the Footer
Performance Objective
For this task you are required to respond to a range of prompt questions that examine your
understanding of key legislative and financial management requirements for a case study
organisation. This assessment also requires you to review available financial information and establish
a budget for the organisation.
Identify the current statutory requirements for tax compliance and list and calculate the tax
Liabilities for Houzit Pty Ltd under taxation legislation.
The 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
Workers compensation is 2%of wages and salaries for each quarter
Company tax is 30% of net profit before tax for each quarter
Income tax:436,878
Payroll tax:98,705
Superannuation:187,020
Workers compensation:41,560
Company tax:305,814.9
Liabilities
Current Liabilities
MYOB:
This business management solutions help you be more productive, which gives more time to build
your venture or to enjoy life outside work.
Accounting
Payroll
Retail point of sale
CRM
Job management
Professional tax solutions
Websites
XERO:
Small business accounting software that’s not available via the cloud can be tedious. Traditionally, it
can suck up far too much of your business’ time and effort. This doesn't add value, and takes the fun
out of being in business. Cloud software can save your company time and money.
You can use cloud-based software from any device with an internet connection. Online accounting
means small business owners stay connected to their data and their accountants. The software can
integrate with a whole ecosystem of add-ons. It’s scalable, cost effective and easy to use.
In the cloud, there’s no need to install and run applications over a desktop computer. Instead, you pay
for the software by monthly subscription.
Based on the above analysis, organisation is recommended to use XERO accounting system for its
business management purposes.
Explain how you can apply the following principles of accounting in developing the budgets
required for this task:
a. Matching principle: This principle states that expenses should be matched against the revenue that
they generate in same time period.
b. Account groups: financial transactions allocated in five account group which are Assets, liability,
Equity, Revenue, Expenses. Assets liability and equity are comes under statement of location and rest
of them comes in report of financial performance.
c. Time periods: This time periods are known as the accounting periods. This period is the period of
time when net income and profit are calculated and reported it can be monthly, quarterly and yearly.
Explain and discuss the implications of probity when preparing and revising budgets.
Honest Books: Honesty is an ethical principle at the heart of the budgeting process. If the
numbers you crunch don't correspond with your actual business activities, then it is unlikely
that your budget will reflect genuine ethical priorities. If your financial processes are clear,
accurate and transparent, they will provide you with the tools and information necessary to
List the critical dates and initiatives that will require or generate resources for Houzit Pty Ltd
in the next financial cycle.
First quarter: very low requirement
Second quarter: high requirement of resource
A new car costing $97,466 has been planned for in the coming period to replace the old
vehicle.
Reduction on the principle of the loan by a payment of $100,000 on the 31 December 2011.
To reduce the expected gross profit rate by 1% by lowering prices on the products.
To increase the advertising budget by $70,000 to secure a greater market share. $200,000 is
planned for the first quarter with the balance apportioned equally over the following three
quarters.
To increase wages and salaries by $172,500 to provide commissions on sales that should help
to maintain Houzit’s sales growth.
List the items you would recommend for inclusion in the budgets for Houzit Pty Ltd.
Cash flow budget
BSBFIM601 Assessment 1 Version: v18.0 Page 6 of 11
Developed by: Nortwest Pty Ltd Approved by: AM Issued: August 2018 Review: August 2019
Capital expenditure budget
Wages and salaries budget
Fees for training
Office supplies fee
List of the new or modified internal controls that could improve risk management for Houzit
Pty Ltd including the maintenance of audit trails.
Authorisation of timesheet by department manager.
Keep a numbered cash receipts book.
Using online fee or sequenced cheques for duties paid out.
Proper coding of shown transactions against suitable general ledger account and cost centre.
Settlements between company books and third party bank statements are performed
Profit budget
PROJECT BUDGET 2011/2012 Qtr1 Qtr2 Qtr3 Qtr4
Expenses
Sales budget
Detail
Budget notes
Some of the reasons for previous year profits for Houzit Pty Ltd are following:
Existing financial management approaches are not effective due to the following reasons:
Following are the keys points that must be followed during implementation and monitoring of budget
expenditure:
Houzit Pty Ltd has had increased activity of business and sales which is due to increase of services
used in the company’s after-sales service and advertising investment. As a result they have increased
their customer base and built a solid foundation of return customers.
For the new fiscal year, the budget is calculated according to the consumption ratio of previous years.
To increase cash flow; in my opinion management in store should be increased in the store operation
and sales, increase the supervision in the process of using the economic budget expenditure, and
make an account transfer in the connection of the cash flow between the store and the company.