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Student copyAssessment Booklet -BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 1BSBFIM601Manage FinancesAssessment BookletSTUDENT COPY Student Name:Student ID No: BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 2ContentsHow Do I Use This Book?………………………………………………………………………………………………………………… 3Assessment Resource Summary ………………………………………………………………………………………………………… 4Section 1: General Instructions to Student ………………………………………………………………………………………. 5General information on Assessment Methods ……………………………………………………………………………………… 8Learner Declaration………………………………………………………………………………………………………………………… 10Assessment 1 – Project …………………………………………………………………………………………………………………… 12Performance objective…………………………………………………………………………………………………………………….. 12Assessment description …………………………………………………………………………………………………………………… 12Assessment instructions ………………………………………………………………………………………………………………….. 12Case Study Scenario……………………………………………………………………………………………………………………….. 14Plan for Financial Management ……………………………………………………………………………………………………….. 14Pax’s Business Plan Summary…………………………………………………………………………………………………………. 15Budget development process …………………………………………………………………………………………………………… 17Pax’s Budget objectives ………………………………………………………………………………………………………………….. 17PAX HOTEL Budgeting Policy and Procedures ………………………………………………………………………………… 17Pax’s Budget variances and schedules………………………………………………………………………………………………. 18Activity 1-Accounting Software Requirement……………………………………………………………………………………. 19Activity 2 –Establish a Budget and Allocate Funds ……………………………………………………………………………. 20Previous Years Financial Data…………………………………………………………………………………………………………. 21(Statement of Financial Performance/Profit & Loss Report)………………………………………………………………… 21Statement of Financial Position/ Balance Sheet………………………………………………………………………………….. 24Activity 3 -Cash Flow Budgets………………………………………………………………………………………………………… 27Activity 4 -Debtors Ageing Summary Report ……………………………………………………………………………………. 29Debtors ageing budget…………………………………………………………………………………………………………………….. 29Aged debtors …………………………………………………………………………………………………………………………………. 29Activity 5 – Internal Audit……………………………………………………………………………………………………………….. 30Assessment 1 Assessor Checklist………………………………………………………………………………………………….. 31Assessor Use ONLY ………………………………………………………………………………………………………………………. 31Assessment 2 – Role Play – Implement and report finances ………………………………………………………………… 34Assessment 2 – Observation Checklist ……………………………………………………………………………………………… 35Assessor Use ONLY ………………………………………………………………………………………………………………………. 35BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 3How Do I Use This Book? Your assessor will go through this Assessment Booklet and theassessment activities with you in detail, before the assessmentprocess begins.This Assessment Booklet isdivided into two sections:• Section 1 -The introduction –which provides generalinformation about the unit(s)of competency you, will beassessed in.• The second section containsspecific detailed informationof the assessmentcomponent activities. Youwill need to complete eachassessment activitycompletely and to therequired standard explainedto you by your trainer and inthis Assessment Booklet inorder to achieve competencein this assessment process BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 4Welcome to your assessment on the following unit(s) of competency Assessment Resource SummaryUnit DetailsBSBFIM601 Manage FinancesAssessment TypeThis is a summative assessment, which requires each student to haveadequate practice prior to undertaking this assessment.Assessment MethodsProjectsAssessment 1Activities 1- 5Role PlayAssessment 2Role-play –Written AssessmentAssessment 3(Refer to separate WrittenAssessment document) Unit SummaryThis unit describes the skills and knowledge required to undertake budgeting, financial forecasting andreporting 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 andreporting on financial activity.It applies to individuals who have managerial responsibilities which include overseeing themanagement of financial and other resources across a business unit, a series of business units orteams, or an organisation. It covers all areas of broad financial management. In a larger organisationthis work would be supported by specialists in financial management.No licensing, legislative or certification requirements apply to this unit at the time of publication. Unit CodeTitleUnit SectorBSBFIM601Manage FinancesFinance – Financial Management *Pre-requisite UnitNil BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 5Section 1: General Instructions to StudentPlease read all the information before you proceed to complete the assessment tasks. If you do notunderstand any part of these instructions, please ask your trainer/assessor.Objective of AssessmentThe primary objective of assessment is to support and encourage the students learning outcomes. Theassessment results give the assessor an indication of how well the students have learnt in class and or areasthey may need extra support with. The assessments are intended to be equitable, fair and flexible. All theinformation, skills and knowledge being assessed by the assessments have been based on theory, practicaland skills delivered by the trainer/assessor during classes, and or during self-directed study and meet therequirements of the unit of competency.Assessment Feedback and Support throughout the Assessment ProcessStudents are encouraged to reflect on key observations and issues encountered during their studies toencourage learning. Knowing what you understand or have mastered and identifying where you need toimprove the critical skills for successful learning.The assessor will give student feedback throughout the duration of the unit they are studying and afterassessment results. The feedback given to the student will always be to support their achievements and tomonitor student progress throughout their studies.Reasonable Adjustment or Special NeedsIn the situation where you or your student feel that extra support needs to be given, you should organise atime to meet with your student and discuss the options you can offer. Your aim is to ensure the studentssuccessful completion of their course with the least amount of difficulty.Reasonable adjustment will be provided for students with a disability or learning difficulty according to thenature of the disability or difficulty. Reasonable adjustments are made to ensure that the student is notpresented with artificial barriers to demonstrating achievement in the program of study. Reasonableadjustments may include the use of adaptive technology, educational support and alternative methods ofassessment such as oral assessment.In assessing the competence of individuals, assessors must provide for reasonable adjustments to ensure theassessment principles of fairness and flexibility are addressed. However, assessors must be confident thatreasonable adjustments do not compromise the outcomes of the unit and the integrity of the qualificationsand Statements of Attainment issued as certification of achievement.BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 6Achieving a Satisfactory Result and ReassessmentThis qualification is based on Competency based training.There are two outcomes for each assessment task level:S (S) = SatisfactoryOr: (NS) = Not Satisfactory (requires more training and experience or evidence to complete the assessment).Students must achieve a Satisfactory result (S) for all components of the unit tasks to be deemed overallCompetent (C) in this unit. Should you not be successful in your attempt your assessor will provide directive feedback to guide tosuccess in your second attempt; i.e. reassessment. You will be given two (2) re-assessment opportunities of which one will be at no cost to you but the secondone will incur a fee. Please refer to the fee schedule located on the website. Assessment reasonable adjustment may be exercised by your assessor at their discretion.Appeal an Academic DecisionWhere a student does not agree with the Assessors decision they should first discuss the issue with theAssessor and try to reach an understanding of the decision and a way forward to get the issue resolved.If the student still wishes to pursue the matter further – they may then lodge an appeal following the College’sComplaints and Appeals process. Please refer to the PAX Institute of Education Complaints and Appeals Policyfor further details.Cheating and PlagiarismPAX Institute of Education will not tolerate Cheating and plagiarism from any student. Evidence ofplagiarism and cheating are treated seriously. The Institute imposes severe penalties on students whocheat and plagiarise. Consequences for students engaging in such practices may include but not limitedto being deemed Not Yet Satisfactory in the assessment or Not Yet Competent in the unit or exclusionfrom the course. If you are caught cheating, you will be required to re-enrol in the unit, which will incur afee. Please refer to the schedule of fees on the PAX website. Assessors must ensure that students’ workis genuine and produced by the student.Student copyAssessment Booklet -BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 7Submitting Assessment TasksStudents must submit all assessment tasks together with the provided cover sheet. Work submitted without acoversheet will not be accepted.ALL tasks must be completed in Intelligible English. It is preferable that tasks are typed, where this is notpossible or where room is provided on a paper for short answers, you must write clearly.Copy of students workStudents are required to hold a copy of their submitted assessment task prior to their submission to PAXInstitute of Education.Cover sheetsStudent must submit a completed coversheet with all assessment tasks, ensuring the student declarationsection is signed. Assessment cover sheets are available from the front office.Due datesSubmissions must be made by the due date. Late submissions will be treated as reassessment unless thestudent is granted pre-approval. For the procedure on how to obtain extensions, refer to the Due DateExtensions section.ReferencingAll information taken from the internet or from another source must be properly cited using an in-textcitation or footnote citation and include the full source in the reference list.Student Access to RecordsStudents have the right to access current and accurate records of their participation and results at any time.Students can see their results by requesting the information from a direct request contacting the relevantmember of the Academic DepartmentDue Date ExtensionsStudents must submit all tasks on or before the due date set for each Unit of Competency. Should studentsneed extensions, students must consult with the Academic Manager. Extension can only be obtained if theneed is genuine, or under compassionate circumstances.Students are required to submit your request for extension in writing to the Academic Manager and attachany supporting documents.BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 8General information on Assessment MethodsAssessment tasks may be structured with any combination ofa) Written Tasks Assignmentb) Projects/Researchc) Case studiesd) Role Plays/Observationse) Practical DemonstrationsEach unit will clearly show1. How many tasks there are2. What the nature of the task is – (see above)You must complete all of the appointed tasks and gain a satisfactory result in all tasks in order to bedeemed Competent in the unit.Case Study/Reports/Projects/Research• Ensure you are clear on the topic. If you are unsure please ask questions to your trainer/assessor.• This is an open book test• Ensure you know the Due Date and that you submit all your assessments on or before the DueDate.• Ensure that the answers provided are your own and has not been copied or plagiarised from anyperson or source.• In order to achieve satisfactory , ALL questions MUST be answered CORRECTLY• When using a pen, use black or blue pens. Assessments written in pencil or red pen will not beaccepted.• If your writing is illegible your trainer may request, you to type your written task. You will thenneed to sign the student declaration of authenticity. Your trainer at their discretion may also quizyou with verbal questions for deeming authenticity.• Ask your assessor if you do not understand a question. Whist your assessor cannot tell you theanswer, he/she may be able to re-word the question for you.• Do not talk to your classmates. If you are caught talking, you will be asked to leave and yourassessment will not be marked.• Do not cheat. Anyone caught cheating will automatically be marked Not Satisfactory (NS) for thisassessment.BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 9Practical Tasks/Role plays:Your trainer will:• Set a date for each task.• Advise students of the topic.• Allow opportunities for the student to ask questions• Discuss this tool with the student prior to the observation taking place to ensure that thestudent is ready for the observation and in particular that they can prepare for their settingas listed in the tool.Practical units of competence offer the opportunity for the student to be assessed on their competence ateach class by what they have prepared and how they have prepared it. For a student to be competent, thestudent should have demonstrated each task in the Checklist.BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 10Learner DeclarationI understand what is required to be completed in this assessment. I have been fully informed of theinstructions and I am confident to proceed. Learner Name:Learner Signature:Date: BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 11This page is left intentionally blankBSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 12Assessment 1 – ProjectPerformance objectiveFor this task you are required to respond to a range of activities that examine your understanding of keylegislative and financial management requirements for a case study organisation. This assessment alsorequires you to review available financial information and establish a budget for the organization.Assessment descriptionThis assessment requires you to assume the role of ‘Business Manager’ for Pax Hotel. Use the informationprovided in the case study and determine the requirements to undertake budgeting, financial forecastingand reporting requirements for the organization. You will also need to review the case study provided andprepare a budget (in electronic spreadsheet format) and budget notes for distribution and implementationin the organization.Assessment instructionsRead the case study.Analyze the case study information and respond to the questions in the space provided.Assume you have been appointed as the Business Manager of Pax Hotel. John Smith, the CEO, has askedyou to prepare some financial budgets for the 2017/2018 financial year as a preliminary overview of thefinancial year ahead.Analyze the case study information (including business plan summary and previous financial data) andprepare the following.Develop a sales budget, profit budget, cash flow budget and debtor ageing summary using electronicspreadsheets (as separate worksheets) making sure your budget is divided into quarterly periods and thatyou use previous financial data to determine allocations for resources.Ensure each budget you prepare complies with the statutory requirements and organizational policies andprocedures as provided.BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 13When you review the case study and the documents ensure you take notes to assist your report writing infurther activities Your notes should cover:• reasons for previous profits and losses• your comment on the effectiveness of existing financial management approaches• all assumptions and basis that have been made or used to form budgets• Any relevant notes regarding implementation and monitoring of budget expenditure.• Once the budget is prepared, circulate it to the CEO (Assessor) and communicate informationregarding the budget and answer a series of prompt questions in written or oral form as agreedwith your assessor.Submission should include: –● a completed annual budget with quarterly breakdown in a single spread sheet with a separatedocument for each budget component/activity. Label clearly which activity/assessment each relateto● Budget notes, answers to the questions and reports submitted in a professional format.Your assessor will be looking for:● evidence that you understand the required legislative requirements● evidence that you can identify suitable software for financial management● evidence you have reviewed the case study information provided by submitting an appropriatebudget with budget notes● Evidence that you have clearly communicated information regarding the budget and correctlyresponded to a series of questions.Resources required for this assessment include:• access to a computer• access to the internet• access to MS Office applications/Excel• Access to a printer.BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 14Case Study Scenario You have recently been appointed as the Business Manager of PAX HOTEL Pty Ltd. PAX HOTEL is the leadingHospitality and tourist hotel in the Melbourne region. PAX HOTEL has grown over the past five years froma boutique hotel to the current 5-star chain. PAX HOTEL prides itself on superior after sales service whichhas been a key reason for the continued growth in sales and corresponding profit increases. Today PAXHOTEL employs over 150 staff.PAX HOTEL Pty Ltd is a proprietary limited company (ACN 12 345 678 910) registered with the AustralianSecurities and Investment Commission. The registered and the principle place of business is190 Queen St Melbourne VIC 3000 Plan for Financial ManagementIn this activity you will be required to ‘undertake research’ by accessing and analysing:• The business plan summary. Ensure you take note of critical dates and initiatives that you apply toyour financial plan.• Expected changes based on colleagues/accountant research to be considered in the budget andfinancial plan• Policies and procedures.• As well as previous year’s financial data to determine allocations for resources.The information contained within these documents will be used to help complete further activities.BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 15Pax’s Business Plan Summary 1. The anticipation that the coming financial year (2017/2018) would see sales grow by 20% from theprevious year.2. To budget for an increase in inflation to 4% per annum and that all costs subject to inflationshould incorporate this increase.3. A new car costing $97,466 including GST has been planned for in the coming period to replace thefive-year-old vehicle currently used by the chairman. This fuel inefficient car will attract a luxury cartax. – (Luxury car tax will be based on the same amount as previous years plus the inflation rate.4. Profits are to be built on securing a growing customer base which will generate loyalty sales andrefer other customers to the organisation. The superior after-sales service is the key strategy toachieve this.5. Reduction on the principle of the loan by a payment of $100,000 on the 31 December 2017 fromthe profits generated by the business.6. One objective in this plan is to manage the debtors more efficiently in the current period. This willinvolve investing in a new accounting software that will help manage these accounts moreefficiently.7. The expectation that 2017/2018 would be a difficult trading year but that the budget net profitshould target the same result as achieved in the 2016/17. The strategy to achieve this in thebusiness plan included three key elements:a. Allow for a 5% increase in cost of goods sold(COGS) to anticipate industry changes.b. To increase the advertising budget by $70,000 over the 2016/2017 results in the hope thatPAX HOTEL can secure a greater market share in a constricting market. $200,000 is plannedfor the first quarter with the BALANCE apportioned equally over the following threequarters.c. To increase wages and salaries by $172,500 over the 2016/2017 amounts in the hope thatallowing the existing high number of casual staff to earn commissions on sales that shouldhelp to maintain Pax Hotel sales growth. BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 16 After going through the business plan summary, the CEO gave you the previous year’s financial reportsand asked you to speak with the accountant Celina Patel to get some of the figures and detailedexpectations for the coming year.You arrange a meeting with Celina Patel -Pax’s accountant, and she gives you the following insight into thehistorical expense relationships and the current statutory compliance liabilities.Sales and profit budget information● Total yearly sales are expected to increase by 20% from 2016/2017● Cost of goods sold is expected to increase by 5% from the previous year.● When preparing your balance sheet – Assets are expected to increase by 10% and liabilities increaseby 5%.● Accounting fees have been negotiated for the year at a fixed amount of $10,000 to be paid in equalamounts each quarter.● The interest charges on the bank loan are anticipated at a reduced amount of $84,508 due to anagreed repayment of some of the loan principal. This is to be paid in equal amounts each quarter.● Bank charges are expected to be the same as 2016/2017 and paid in equal amounts each quarter.● Depreciation is expected to be the same as 2016/2017 and allocated in equal amounts eachquarter.● Advertising is to be apportioned to each quarter based on the business plan.● The following expenses are expected to increase by the determined inflation rate (4%) in thebusiness plan summary:○ Insurance – apportioned in equal amounts each quarter.○ Cleaning -apportioned in equal amounts each quarter.○ Repairs and maintenance – apportioned in equal amounts each quarter.○ Rent – apportioned in equal amounts each quarter.○ Telephone – apportioned in equal amounts each quarter○ Electricity – apportioned in equal amounts each○ Luxury Car – apportioned in equal amounts each● Fringe benefits tax is expected to be the same as 2016/2017 and paid in equal amounts eachquarter.● Wages and salaries are expected to increase as per the business plan summary.● Consequently, after you derived the cost for wages and salaries you can also determine:○ 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. BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 17PAX HOTEL Budgeting Policy and Procedures Budget development processThe standard process for developing budgets will follow the following steps:1. Establish the budget objective.2. Gather prior period data.3. Discuss prior period information and anticipated changes in the budget period with stakeholders.4. Research relevant external information.5. Incorporate identified trends to determine assumptions and parameters.6. Prepare budgets in standard formats.7. Submit budgets for approval.Pax’s Budget objectivesPAX HOTEL prepares budgets to meet various company objectives. Budgets are prepared:● for a specific expansion of the business activities:○ business case to be prepared covering a cost-benefit analysis, market research report andsummary profit and investment expectations● to outline a specific debt reduction initiative:○ company-wide summary of profit expectations, planned debt and equity fundingarrangements, CAPEX plans summarized● annually to cover the next financial year:○ for the 12-month period from the beginning to the end of the financial year○ budget to include four quarter milestones in line with seasonal trends identified from previousyears data○ initial preparation includes a preliminary overview of the financial year ahead○ sales budget for next year to be prepared by department by quarter○ profit budget (including detailed expenses) for the next year to be prepared by quarter○ cash flow effect of the GST payable per quarter to be prepared (scheduled compliancepayment date is the 21st day after the end of the quarter)● To satisfy the statutory requirements relating to the current and short-term solvency of thecompany:○ three monthly rolling forecast of cash flows to be prepared● To qualify the strategic plans for the next 3–5 years planning cycle:○ Profit and CAPEX budget to be prepared. BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 18 Pax’s Budget variances and schedules● Key performance indicators that should be closely monitored and reported on include variances to:○ total sales○ gross profit (GP) %○ wages and salaries as a % of total sales○ total expenses as a % of total sales○ net profit in dollars○ Net profit as a percentage.● Budget variances will be reported using the standard format provided in this policy and proceduresdocument.● Budget variances must be completed within five working days of quarter end.● Actual results for the month will be provided by the accounting information system.● An analysis of the variance between the actual and the budget must include $ and % variance.● Report with explanations and recommendations to be completed within seven working days ofquarter end and be given to the CEO.● Analysis and investigation of variances will include the following priority:1. Establish the primary causes for variances to key performance indicators of total sales, grossprofit % and net profit $.2. Establish reasons for those individual items in the variance report that represent the greatest$ variance.3. Establish reasons for those individual items in the variance report that represent the greatest% variance.● Schedules relating to compliance due dates must be prepared and monitored by the accountant.Managers supplying information to the accountant regarding the compliance schedule must submitit at least five working days prior to the due date. BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 19Activity 1-Accounting Software Requirement PAX HOTEL wants to upgrade their existing accounting system which will manage the company accountsmore efficiently in the long run. They request that the new system you recommend to them to be compliantwith all legislative and statutory requirements for small to medium businesses.None of Pax Hotel’s products are GST free however the accounting information system records the GSTcollected as well as the input tax credits earned on the purchases of stock and assets. These amounts arereported and paid in accordance with the business activity statement (BAS) schedule determined by theAustralian Tax Office.They have 100 fulltime and 50 part-time staff, but only 10 of the staff will need access to the financialsystem. The staff with access to the financial system wants software that is a single purchase with noongoing license fees, and a plan to keep using if for the next 3–5 years, while the organization continuesto grow.PAX HOTEL has upgraded their computers and have five new desktop PCs which will be used by the financestaff. They are current (for 2013) specification machines with i5 CPUs and 4Gb RAM each, and all haveWindows 7 Professional and Norton’s 360 installed with the professional version of Microsoft Office SmallBusiness as well. Other staff will use their machines at various times, so it is important that the softwarerequires a login to access data and that data stored by the software cannot be accessed in any other way. John Smith has asked you to review the current accounting software and submit a quote for a newaccounting software.Using the information provided in the scenario you are to research all the different options of accountingsoftware that are available on the market.You will need to prepare a report for submission.This report must contain a minimum of three (3) different options.Each of the 3 options must have both advantages and disadvantages and your overall summary of thesoftware.Then in your report’s conclusion you will identify which software program you believe is the best option topurchase and implement at Pax hotel that meets the criteria stated in the above scenario. Write yourrecommendations to John Smith and state the reasons for your decision.Submit your quotes/prepared report to your assessor.Report needs to be a minimum of 500 words -Use font style Times New Roman size 12BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 20Activity 2 –Establish a Budget and AllocateFundsJohn Smith, the CEO, has asked you to prepare some projected financial budgets for the 2017/2018 financialyear as a preliminary overview of the financial year ahead.He asked you to first prepare a 12 months budget and then break it up over the four quarters.The areas he is particularly interested in seeing is:1. Forecasted sales budget for 2017/2018 by year and quarter. (Statement of Financial PerformanceAka Profit & Loss report)2. Forecasted Statement of Financial Position Aka Balance Sheet for Year 2017/20183. A cash flow budget. The cash flow result per quarter of the GST after adjusting the GST collected bythe allowable GST tax credits. (GST Paid)4. The anticipated aged debtor’s summary report – yearly and at the end of each quarter.Mr Singh has provided you with access to the previous year’s financial data to analyse.Using this data as well as the business plan summary you are required to prepare a budget for the year andthen a quarterly budget.You will need to follow the same format as the previous year’s financial reports.*You will be provided with an excel spreadsheet to assist you in your accounting calculations andpresentation. Manual calculations will assist your accounting understanding – although you may like to useexcel with formulas if you feel confident.Student Tip: To use excel formulasEnter formulas by = Sum (cell number + cell number) press enterMultiplication is *Divide is: /To assist with increasing by a percentage use the formula= cell number + (cell number * percentage amount and percent symbol)E.g. = D4 + (D4*20%)This will calculate for you any increase for a base amount by a set percentage to give you the newcalculation figure. BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 21Previous Years Financial Data(Statement of Financial Performance/Profit & LossReport) Statement of Financial Performance (Profit & Loss Report) -Pax Hotel For 12 monthsended 20132013/142014/152015/162016/172017/2018RevenueSales12,474,33613,472,31514,550,10015,714,108Cost of Goods Sold6,860,9017,409,7738,002,5558,799,900Gross Profit5,613,4656,062,5426,547,5456,914,208ExpensesAccounting Fees5,5006,5008,5009,000Interest Expense45,00065,00096,50890,508Bank Charges1,2001,3001,5801,600Depreciation170,000170,000170,000170,000Insurance12,50012,50012,50012,875Advertising50,000100,000280,000280,000Cleaning12,56015,65218,70019,261Repair/Maintenance40,25052,60060,00061,800 BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 22This page is left intentionally blankBSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 23Expenses Cont’d Rent2,465,0002,465,0002,465,0002,538,950Telephone9,86212,52314,00014,420Electricity Expense22,50023,65825,00025,750Luxury Car Tax12,400Fringe Benefits Tax26,00026,00026,00028,000Superannuation148,500160,737166,500171,495Wages & Salaries1,649,9981,785,9651,850,0001,905,500Payroll Tax78,37584,83387,87590,511Workers’Compensation33,00035,71937,00038,110Total Expenses4,770,2455,017,9875,331,5635,457,780Net Profit (BeforeCompany Tax)843,2201,044,5541,215,9821,456,428Company/IncomeTax252,966313,366364,795436,928Net Profit after tax590,254731,188851,1881,019,499 BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 24Statement of Financial Position/ Balance Sheet Pax Hotel Statement of Financial Position As at 30 June2015/162016/172017/2018AssetsCurrent AssetsCash on Hand50,00055,000Cheque Account144,842160,314Deposits Paid950,000950,000Trade Debtors850,000975,000Merchandise Inventory1,530,0001,430,000Total Current AssetsFixed AssetsMotor Vehicles at Cost500,000500,000Motor Vehicles Accum Dep(100,000)(125,000)Furniture & Fixtures at Cost1,950,0002,250,000Furniture & Fixtures Accum Dep(650,000)(770,000)Office Equip at Cost400,000400,000Office Equip Accum Dep(90,000)(115,000)Total Fixed Assets2,010,0002,140,000Total Assets5,534,8425,710,314 BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 25This page is left intentionally blankBSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 26 LiabilitiesCurrent LiabilitiesMasterCard17,80014,860Trade Creditors780,000679,000GST Collected1,455,0101,571,411GST Paid(943,125)(987,626)Superannuation Payable100,000120,000Luxury Car Tax Payable20,920–income Tax Payable364,795436,928PAYG Withholding Payable65,00044,872Total Current Liabilities1,860,4001,879,445Long-Term Liabilities––Bank Loans1,608,4591,508,459Total Liabilities3,468,8593,387,904EquityOwner/Shareholder’s Equity500,000500,000Retained Earnings850,0001,565,982Dividends Paid(500,000)(1,200,000)Current Year Earnings1,215,9821,456,428Total Equity2,065,9822,322,410 BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 27Activity 3 -Cash Flow BudgetsCalculate the GST amount payable for your cash flow budget.Before starting this activity, you will have first had to already calculate your yearly sales forecast for2017/2018. This will be based on the information given in the business plan summary. Once you have yourannual sales projection you can calculate the GST collected based on the statutory requirement rate.GST paid will be the same % rate as the previous year which is a 5% increase from GST paid 2016/17.Using these figures/projections and the formula below calculate the GST amount payableSubmit your completed responses to your assessor. You will also need a copy of this report for your roleplay in assessment 2.GST cash flow budgetA statutory requirement for GST is 10% of the recorded amounts in sales. The only capital purchase plannedfor the year is the luxury car for the chairman. Those expense payments on which 10% GST was paid includethe following:● Cost of goods sold:o accounting feeso insuranceo store supplieso advertisingo cleaningo repairs and maintenanceo rento telephoneo Electricity expense.BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 28The GST amount payable each quarter is the difference between the GST collected from sales and the GSTpaid – format as per policy and procedures. Use the formulaGST Amount payable = GST collected – GST Paid. This is the standard format to present you cash flow budget. CASH FLOW ANALYSIS –GST2017/2018Qtr. 1Qtr. 2Qtr. 3Qtr. 4GST Collectedx,xxxx,xxxx,xxxx,xxxx,xxxLess GST Paidx,xxxx,xxxx,xxxx,xxxx,xxxGST PayableCalculationCalculationCalculationCalculationCalculation BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 29Activity 4 -Debtors Ageing Summary ReportYou are to create a debtor ageing summary report for the year 2017/2018 for the CEO.You will be using the forecasted yearly sales figure that you have calculated previously. Next refer to thecase study details. Using the percentages provided – calculate the figures for the report.After you have finished your yearly calculations you will then need to break down equally per quarter.Submit your printed calculation to your assessor. You will also be using this report as part of your role playfor Assessment 2.Debtors ageing budgetThe historical records show that the debtors balance at the end of each quarter is usually about 20% of thequarter’s sales. At any time in the debtor’s balances 1% of the total debtors is overdue 90 days and over,5% is 60 days overdue, 10% is 30 days overdue and the balance of the total debtors is current. The ageddebtors’ budgets are only distributed to the accountant and the accounts receivable clerk.Here is a template of the standard format that Pax Hotel utilizes.Aged debtors Aged Debtors Budget2017/2018Total YearlyQtr. 1Qtr. 2Qtr. 3Qtr. 4Salesx,xxxx,xxxx,xxxx,xxxx,xxx% Debtors Sales%%%%Total Debtors%CalculationCalculationCalculationCalculationCurrent%CalculationCalculationCalculationCalculation30 Days%CalculationCalculationCalculationCalculation60 Days%CalculationCalculationCalculationCalculation90 Days%CalculationCalculationCalculationCalculation BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 30Activity 5 – Internal AuditRead through the following case study report and write a short 200-word report about Carls findings.o Detail why businesses need to maintain internal audit trails.o Why is it important to identify discrepancies?o Why you should compare forecasted data with the actual data.o What methods could you use to ensure that there is no ‘misappropriation of funds’ (i.e. theft/skimming/embezzlement) within an organisation? Carl Kerns is one of the directors of the board. Carl said that as a board member they are given the profitand cash flow budgets. He was appointed by the board to conduct an internal audit of operations to lookfor weaknesses in the internal control system. His report uncovered the following processes that hebelieved needed to be strengthened.● While the overall customer base is increasing from year to year, there may be internal control issuesrelating to how these new customers are secured.● Some discounts that were being given to customers were recorded as a net amount on the invoicesand gave no indication of the discount from standard prices.● Some cash registers in the stores were not reconciling the cash in drawer with the register printout.● Not all timesheet overtime amounts were being authorized by the line manager.● Service invoices for some items of equipment were not signed or linked to a purchase order. Therewas no check that the work had been carried out.● Not all assets in the stores had unique codes fixed to the asset.● There was a minimal feedback line of communication from the shop floor to head office, particularlywhen an error in the budgeting report process was recognized.● Debtor reconciliations were not done monthly and sometimes not at all.● In busy times the cashiers that operated the registers were also asked to do their own reconciliationsand banking. Sometimes the cash was held in the store for a day or two.● Job roles were not clearly defined so that responsibilities and liability can be identified.● There was little rostering of duties and cash receipts were not pre-numbered.Of concern to Carl was the directive given by the board to ensure that audit trails were created andmaintained. These included:● Signing the timesheets for employees under the authority of a department manager.● Maintenance of a numbered cash receipts book.● Using sequenced cheques as a systematic way of evidencing all monies paid out.● Ensuring proper coding of evidenced transactions against appropriate general ledger account andcost center.Ensuring reconciliations between company books and third-party bank statements are performed BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 31Assessment 1 Assessor ChecklistAssessor Use ONLYThis checklist is to be used when assessing the students in the associated task. This checklist is to be completed foreach student. Please refer to separate mapping document for specific details relating to alignment of this task to theunit requirements. Did the studentS/NSCommentsStudent accessed and evaluated previous financial data if available Yes NoStudent discussed and reviewed assumptions and budget parameters Yes NoStudent identified and developed budget objectives Yes NoStudent clearly detailed the following items:• Cash• Expenditure• Revenue Yes NoStudent included milestones (Quarterly for the BAS) in their budget tomonitor performance Yes NoStudent estimated cash flow and cash flow trends Yes NoStudent identified appropriate software for financial management Yes NoStudent included performance indicators in their budget to monitorperformance Yes NoProfit targets / goals conformed with budget requirements Yes No BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 32 Student included detailed breakdown of annual budget into quarterly periods Yes  NoStudent identified any potential financial risks based on given data / information Yes  NoStudent recommended appropriate protection strategies as required in relation toaudits and misappropriation of funds. Yes  NoCash flow projections were prepared in accordance to business plan Yes  NoStudent included all relevant taxes, including:• GST• BAS Yes  NoThe following estimates were realistic based on the provided information: (Asprovided in the business plan summary) (• Future cash flow• Future costs• Future revenues• Capital expenditure budget• Financial budget (including start-up capital• Goals) Yes  NoDocuments were created following set procedures and adhering to Australianaccounting standards Yes  NoStudent demonstrated the ability to read and interpret financial information /statements Yes  NoStudent demonstrated basic skills in accrual accounting Yes  NoStudent detailed all delegations and budget accountabilities for implementation andmanagement of proposal Yes  No Student Declaration: I declare that the worksubmitted is my own and has not been copied orplagiarised from any person or source.Name: ________________________Signature: ________________________Date: ____/_____/_____ BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 33Assessor Use Only CommentsResult(Please Circle)SatisfactoryNot SatisfactoryAssessor: I declare that I have conducted afair, valid, reliable and flexible assessment withthis student, and I have provided appropriatefeedbackAssessor: _________________________________Signature: ________________________Date: ____/_____/_____ BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 34Assessment 2 – Role Play – Implement andreport financesAfter you have completed assessment 1 you will participate in a role play.Print out all your documents including your budget to be prepared forthe role play. (make 2 copies – one for you and the other for yourassessor)Your assessor will act as your CEO – John Smith.You will explain to Mr Smith what you have forecasted for in the nextbudget and your reasoning behind how you came to those figures.Ensure you have the yearly budget as well as the quarterlybreakdown.Keep a copy of the business plan with you so that you can discuss how you are intending to meet theobjectives of the organisation through your financial management plan and skills.Ensure your CEO is clear about the budget, the reporting requirement and financial delegations. answerany questions the CEO may have.The CEO will check to make sure your reports are structured clearly and conform to PAX’S standardformatting.THE CEO will also be checking the financial accuracy of your budget.Should Mr Smith identify any calculations in your budget reports that are incorrect you may need to reviewyour budget and re-submit.WHAT DO I NEED IN ORDER TO COMPLETE THIS ASSESSMENT?• Access to Assessor to play the role of CEO• Access to a range of workplace documentation (templates provided).WHEN DO I DO THIS TASK?• You will do this task in the classroom as advised by assessor• Write in the due date as advised by your assessor _____________________________BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 35Assessment 2 – Observation ChecklistAssessor Use ONLYThis checklist is to be used when assessing the students in the associated task. This checklist is to becompleted for each student. Please refer to separate mapping document for specific details relating toalignment of this task to the unit requirements.Please complete below Student Name:Student ID No: During the role play did the student:SatisfactoryDate Observed:Student undertook discussions with stakeholders as appropriate Yes  NoStudent discussed and reviewed assumptions and budget parameters (businessplan summary and forecasting data) Yes  NoStudent accessed and evaluated previous financial data if available Yes  NoStudent identified and developed budget objectives Yes  NoStudent clearly detailed the following items:• Cash• Expenditure• Revenue Yes  NoStudent included milestones in their budget to monitor performance (Quarterly) Yes  NoStudent estimated cash flow and cash flow trends Yes  NoStudent identified appropriate software for financial management Yes  NoStudent included performance indicators in their budget to monitor performance Yes  No BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 36 Profit targets / goals conformed with budget requirements Yes  NoStudent included detailed breakdown of annual budget into quarterly periods Yes  NoStudent identified any potential financial risks based on given data / information Yes  NoCash flow projections were prepared in accordance to business plan Yes  NoStudent included all relevant taxes, including:• GST• BAS Yes  NoThe following estimates were realistic based on the provided information:• Future cash flow• Future costs• Future revenues• Capital expenditure budget• Financial budget (including start-up capital)• Projected P&L for first 12 months Yes  NoStudent competently communicated with stakeholders regarding the following:• Milestones• Policies• Goals Yes  NoDocuments were created following set procedures and adhering to Australianaccounting standards Yes  NoStudent demonstrated the ability to read and interpret financial information /statements Yes  NoStudent demonstrated basic skills in accrual accounting Yes  NoStudent communicated effectively with instructor / supervisor always Yes  NoStudent gathered and verified all data effectively Yes  No BSBFIM601 Manage FinancesStudent copyAssessment Booklet BSBFIM601 Version 4.20 Copyright Pax Institute CRICOS No. 03152D RTO No. 22207 Page 37 During role-play with finance specialist (assessor), did the student• Communicate professionally• Explain proposed budgets effectively• Validate reasons and proposals thoroughly Yes  NoStudent detailed all delegations and budget accountabilities for implementationand management of proposal Yes  NoStudent developed procedure for risk management and contingency planning Yes  No Student Declaration: I declare that I havebeen assessed in this unit, and I have beenadvised of my result. I also am aware of myappeal rights.Name: ________________________Signature: ________________________Date: ____/_____/_____ Assessor Use Only CommentsResult(Please Circle)SatisfactoryNot SatisfactoryAssessor: I declare that I have conducted afair, valid, reliable and flexible assessment withthis student, and I have provided appropriatefeedbackAssessor: _________________________________Signature: ________________________Date: ____/_____/_____