ACCOUNTING

ssessment Task 2 BSBFIM601A Manage Finances

Attribution to © 2011 Innovation and Business Assessment Task 2 – BSBFIM601A Hospitality Sem 1, 2016

Industry Skills Council Ltd 1st edition version: 2 Author: Paul Coulter

Last Updated: 20 April 2016 Page 1 of 18

Assessment Task 2: Prepare Budgets Case Study

Submission details Big Bob’s Burgers

The Assessment Task is due on the date specified by your assessor. Any variations to this

arrangement must be approved in writing by your assessor.

Submit documents with any required evidence attached. See specifications below for

details.

 Submit signed cover sheet with your Report, comprising printed budget

spreadsheets and word document answers in a professionally presented format

 An electronic version of spreadsheets is to be emailed to assessor

 The task may be completed in groups of two (preferable). Group members are

jointly and severally responsible for each others work.

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.

Assessment description

This assessment requires you to determine the requirements to undertake budgeting,

financial forecasting and reporting requirements for an organisation. You will also need to

review the case study provided and prepare budgets (in electronic spreadsheet format)

and budget notes and answers for distribution and implementation in the organization (in

word document). This assessment will cover aspects of Elements 1, 2 and 3.

Procedure

1. Read the case study.

2. Analyse the case study information and respond to the questions. Copy the

questions and set up an appropriate word document.

3. Analyse the case study information (including business plan summary and previous

financial data) and complete the following.

a. Develop a sales budget, profit budget, GST cash flow budget and debtor

ageing summary using electronic spreadsheets (as separate worksheets)

making sure each budget is divided into quarterly periods and that you use

previous financial data to determine allocations for resources.

Ensure each budget you prepare complies with the organisational and

policies and procedures as provided.

Assessment Task 2 BSBFIM601A Manage Finances

Attribution to © 2011 Innovation and Business Assessment Task 2 – BSBFIM601A Hospitality Sem 1, 2016

Industry Skills Council Ltd 1st edition version: 2 Author: Paul Coulter

Last Updated: 20 April 2016 Page 2 of 18

b. Develop budget notes (to be answered in Question 9, p18) which include:

i. identification of reasons for previous profits and losses

ii. your comment on the effectiveness of existing financial management

approaches

iii. all assumptions and basis that have been made or used to form

budgets

iv. any relevant notes regarding implementation and monitoring of budget

expenditure.

4. Communicate information regarding the budget and answer a series of prompt

questions in written or oral form as agreed with your assessor.

Specifications

You must provide:

● a completed annual budget in a single spread sheet with a separate sheet for each

budget component

● budget notes and question answers in a written 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

appropriate budget with budget notes

● evidence that you have clearly communicated information regarding the budget and

correctly responded to a series of questions.

Procedure:

● assessment mode: Report

● no variation of the task is required

● follow-up interview may be required (at the discretion of the assessor)

● documentation will be submitted electronically and paper-based – see assessor for

direction.

Case study

You have recently been appointed as the Business Manager of Big Bob’s Burgers Pty Ltd

after having been a Store Manager for the past three years. Big Bob’s Burgers Pty Ltd is

an 8 store chain located in Melbourne. Big Bob’s Burgers is an upcoming burger bar,

catering to the growing need in the greater Melbourne area.

A rather hip offer of quality hamburgers together with stylish soft drinks has allowed Big

Bob’s Burgers to grow over the past five years from one store to a chain. Big Bob’s

Assessment Task 2 BSBFIM601A Manage Finances

Attribution to © 2011 Innovation and Business Assessment Task 2 – BSBFIM601A Hospitality Sem 1, 2016

Industry Skills Council Ltd 1st edition version: 2 Author: Paul Coulter

Last Updated: 20 April 2016 Page 3 of 18

Burgers prides itself on superior sales service which has also been a key reason for the

continued growth in sales and corresponding increases in profit. Today Big Bob’s Burgers

employs over 100 staff.

Big Bob’s Burgers Pty Ltd is a proprietary limited company (ACN 34 555 234 02)

registered with the Australian Securities and Investment Commission. The registered

address is with Big Bob’s Burgers’ solicitors (Langs Lawyers, 535 Ibsa Street, Melbourne,

Vic 3000) and the principle place of business is 555 La Trobe Street, Melbourne Vic

3000.

Computer software requirement

The current accounting information system has not adequately provided sufficient

analysis of revenue and expenditure, which has made it difficult to make informed

estimates of future profits. Estimates have relied on the ‘gut feel’ of the experienced

senior managers. The Board sees the need to apply more analysis to past results that

they believe could be done with the introduction of state-of-the-art computer software.

Big Bob’s Burgers Pty Ltd wants to upgrade their existing accounting system which will

manage the company accounts more efficiently in the long run. They request that the new

system you recommend be compliant with all legislative and statutory requirements for

small to medium businesses.

All of Big Bob’s Burgers’ products attract GST. The accounting information system records

the GST collected as well as the input tax credits earned on the purchases of stock and

assets. These amounts are reported and paid in accordance with the business activity

statement (BAS) schedule determined by the Australian Tax Office.

They have 40 fulltime and 60 part-time and casual staff, but only 8 of the staff will have

to need access to the financial system. Some staff are paid on a salary sacrifice

arrangement that attracts fringe benefits tax.

The staff with access to the financial system want software that is a single purchase with

no ongoing license fees, and a plan to keep using it for the next 3–5 years, as the

organisation continues to grow. They are anticipating that within five years they will have

over 80 full-time staff, and at least 15 staff will then require access to the financial

system.

The payroll system deducts withholding tax from the employees and remits this along with

the firm’s pay as you go (PAYG) instalment each quarter as reported on the firm’s

business activity statement reporting for GST.

Income tax return for the company and its annual statement are completed by the firm’s

accountant. Taxes and fees due are paid by the due dates. Financial records are kept at

Big Bob’s Burgers’ principle place of business.

Big Bob’s Burgers have just upgraded their computers and have five new desktop PCs

which will be used by the finance staff. They are current (for 2014) specification

machines with i7 CPUs and 8Gb RAM each, and all have Windows 7 Professional and

Norton’s 360 installed with the professional version of Microsoft Office Small Business.

Other staff will use those machines at various times, so it is important that the software

has a secure login procedure to access stored accounting or management data.

Assessment Task 2 BSBFIM601A Manage Finances

Attribution to © 2011 Innovation and Business Assessment Task 2 – BSBFIM601A Hospitality Sem 1, 2016

Industry Skills Council Ltd 1st edition version: 2 Author: Paul Coulter

Last Updated: 20 April 2016 Page 4 of 18

Corporate details

James Wolstencroft, the CEO, has asked you to prepare some financial budgets for the

2015/16 financial year as a preliminary overview of the financial year ahead.

He asked you to first prepare a 12 month budget and then break it up over the four

quarters. The areas he is particularly interested in seeing are:

1. Sales budget for 2015/16, by product grouping, by quarter.

2. Profit budget (including detailed expenses) for 2015/16 by quarter.

3. The cash flow result per quarter of the GST after adjusting the GST collected for

allowable GST tax credits.

4. The anticipated aged debtors summary at the end of each quarter.

The CEO wants to be given all the budgets except for the aged debtors budget which the

accountant and accounts receivable clerk can monitor.

The CEO produced a summary of the current business plan that covered the budget year

to highlight some of the key goals, objectives and strategies he would like incorporated

into the budget.

Board Members

CEO

Accountant

Accounts Receivable

Accounts Payable

Manager Stores

Business Manager

Assessment Task 2 BSBFIM601A Manage Finances

Attribution to © 2011 Innovation and Business Assessment Task 2 – BSBFIM601A Hospitality Sem 1, 2016

Industry Skills Council Ltd 1st edition version: 2 Author: Paul Coulter

Last Updated: 20 April 2016 Page 5 of 18

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