Budgeting and Forecasting for Bookkeepers

This assignment focuses on budgeting and forecasting principles essential for bookkeepers. Students need to analyze a given scenario, create a balance sheet, and demonstrate their understanding of key concepts like accounts payable, GST calculations, equity, and retained earnings. The course review section requires students to reflect on the 'Manage Budgets and Forecasts' course and its relevance to their future role as a bookkeeper.

Manage Budgets and Forecasts
This course is based on the nationally recognised unit of competency:
● FNSACC503 Manage budgets and forecasts
It covers the skills and knowledge required to prepare, document and
manage budgets and forecasts, and encompasses forecasting estimates
and monitoring budgeted outcomes.
ASSESSMENT WORKBOOK
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Assessment Workbook T: Manage Budgets and Forecasts
Assessment Workbook T
Manage Budgets and Forecasts
V1.0
Produced 1 February 2016
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Assessment Workbook T: Manage Budgets and Forecasts
Getting Started
Instructions
This workbook contains one (1) assessment comprised of:
● Questions – A set of generic questions testing the student’s general
knowledge and understanding of the general theory behind the unit.
● Exercises - A set of exercises to test the student’s knowledge,
analytical skills in problem solving and performing numerical
calculations.
● Practical Task – A hypothetical case study to test the student’s
knowledge, analytical skills in problem solving and performing
numerical calculations.
‘Questions’ cover generic underpinning knowledge of course terms and
concepts. These questions are all in a short answer format. The longer
questions requiring creative thought processes are covered in the case
studies assessment. You must answer all questions using your own
words. However you may reference your learner guide, and other online
or hard copy resources to complete this assessment.
‘Exercises’ cover processes you would be likely to encounter in a
workplace. Ideally you should be able to answer these questions based on
the processes that are currently in place in your workplace. If this is not the
case, then answer the questions based on processes that should be
implemented in your workplace.
The ‘Practical Task’ is based on a case study in a service or trading
organisation. If you are currently working in an accountancy role, you may
answer these questions based on your own workplace. Otherwise consider
what you should do if you were working.
Requirements for satisfactory completion
For a ‘satisfactory’ result for each component of this workbook, all tasks
must be addressed to a ‘satisfactory’ standard. It is important you;
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Assessment Workbook T: Manage Budgets and Forecasts
1. Provide responses using complete sentences, making direct
reference to the question.
2. Specifically address all parts of the question providing examples
where appropriate.
Competency Based Assessment
Competency based assessment focuses on whether you are able to
perform the task to the standard expected in the workplace. It relies on
you providing evidence that supports your claim of competence. This
evidence is in the form of your completion of the assessments set for each
unit.
Once you have submitted your completed assessments, your instructor will
assess your submission to determine your competence. To be deemed
competent in each course, you are required to achieve a satisfactory result
for all of the assessment components that make up that unit. Where a ‘not
yet satisfactory’ judgement is made, you will be given guidance on steps to
take to improve your performance and provided the opportunity to re-
submit evidence to demonstrate competence. Once a ‘satisfactory’
judgement has been made on all components for a unit, you will be
deemed ‘competent’ in that unit.
Submission
Only submit your workbook once all activities inside are complete. Should
you have any questions regarding your assessments, or not understand
what is required for you to complete your assessment, please feel free to
ask your instructor.
Keep your answers succinct and make sure you are answering the
question. Re-read the question after you have drafted up your response
just to be sure you have covered all that is needed.
Your final assessment result will either be ‘Competent’ or ‘Not Yet
Competent’.
When submitting your assessments please ensure that
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Assessment Workbook T: Manage Budgets and Forecasts
1. All assessment tasks within the workbook have been completed
2. You have proof read your assessment
Candidate Declaration
Submission of this workbook means you agree to abide by the terms of the
candidate declaration below.
By submitting this work, I declare that:
● I have been advised of the assessment requirements, have been
made aware of my rights and responsibilities as an assessment
candidate, and choose to be assessed at this time.
● I am aware that there is a limit to the number of submissions that I
can make for each assessment and I am submitting all documents
required to complete this Assessment Workbook.
● I have organised and named the files I am submitting according to
the instructions provided and I am aware that my assessor will not
assess work that cannot be clearly identified and may request the
work be resubmitted according to the correct process.
● This work is my own and contains no material written by another
person except where due reference is made. I am aware that a false
declaration may lead to the withdrawal of a qualification or
statement of attainment.
● I am aware that there is a policy of checking the validity of
qualifications that I submit as evidence as well as the
qualifications/evidence of parties who verify my performance or
observable skills. I give my consent to contact these parties for
verification purposes.
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Assessment Workbook T: Manage Budgets and Forecasts
Questions
The first part of the assessment covers generic underpinning knowledge of
basic budgetary terms and concepts. These questions are all in a short
answer format. The longer questions requiring creative thought processes
are covered in the second part of the assessment and the case study. You
must answer all questions using your own words. However you may
reference your learner guide, or other online or hard copy resources to
complete this assessment.
TQ1: Describe the purpose of budgeting.
Budgeting is one of the important tools that are used for keeping
track of much information. By using budgeting techniques, one can
control the finances in an effective way. The main purpose of the
budgeting is to control spending. By using budgeting, individual can track
information about where money is being spent and consciously finding
ways on where money can be saved in future. By proper budgeting, it will
help in making better financial decisions as well as spending that
matches the priorities.
The main purpose of budgeting is to get out of debt. Preparation of
budget will help individual to free up extra money per month. Once
individuals are out of debt, they will be free to save up more money each
month. The purpose of budgeting is wealth building as it allows
individuals to save and begin with investing money wisely. Budget
preparation will help in meeting the legal requirements as well as
establishing spending and income raising authority. On preparing a
budget, it helps in establishing a work program for given financial year
that meet the objectives. The main purpose of the budget is to manage
as well as control the resources.
TQ2: List the five (5) activities that form the budgeting process.
1. Determining the flow of information- One of the activity that form budgeting
process is determining the information flow. It is essential for a company to gather
data that is needed for preparation of a budget in different ways. Budgets need to be
prepared in a way that is easy to execute.
2. Deciding upon what is going to measure- One of the activity that form budgeting
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Assessment Workbook T: Manage Budgets and Forecasts
process is deciding the way on how the budget will be measured.
3. Gathering historic data- It is important for the company to gather historic data
information. Firstly, a company needs to segment its operations as well as gather
historic performance information.
4. Marketing Projections- One of the activities that form budgeting process is making
the projections for the company in order to project its performance for the upcoming
financial year.
5. Determining break-even point- One of the activities that form budgeting process is
determining break-even point.
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Assessment Workbook T: Manage Budgets and Forecasts
TQ3: List four (4) benefits that may accrue from effective budgeting.
1. Budgeting help in providing a set of standards where the level of performance can be
properly measured as well as developing a system to provide constant feedback on
performance
2. Budgeting is one of the effective management tool that help in building good
relationships as well as developing morale in the current workplace
3. Budgeting is one of the effective management tool that identifies variances between
budgets as well as actual results
4. After preparation of budgets, it will be easy to identify potential trouble spots such as
cash flow shortages.
TQ4: Briefly describe two (2) limitations that may restrict the budgeting
process.
1. One of the limitations of budgeting process is that there is no guarantee of success.
2. Preparation of budget give rise to uncertainty as it aims at predicting future events as
well as quality of the estimates that are critical for using budget as a control
document
TQ5: What type of budget matches the following descriptions:
TQ5A Budgets that show expected results for a range of levels
of operation;
TQ5B Budgets that are set for a fixed period and not renewed
until the following period;
TQ5C Budgets prepared for one level of activity only;
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Assessment Workbook T: Manage Budgets and Forecasts
TQ5D Budgets that are continually updated so that they reflect
plans for the same length of time.
TQ5A Flexible Budget
TQ5B Period budget
TQ5C Static budget
TQ5D Rolling budget
TQ6: Which of the following is not a qualitative method of forecasting:
a) jury of expert opinion;
b) market research;
c) sales force composite.
a) Jury of expert opinion
TQ7: The following sales were predicted for the years 2008 to 2012:
2008 – 250,000
2009 – 275,000
2010 – 270,000
2011 – 276,000
2012 - 295,000
2013 -
Use the Excel statistical function “Trend” to predict sales for 2013.
A B
250000 2008
275000 2009
270000 2010
276000 2011
295000 2012
300500 2013
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Assessment Workbook T: Manage Budgets and Forecasts
TQ8: With respect to the budgeting process list three (3) factors that are:
TQ8A controllable;
TQ8B uncontrollable.
TQ8A 1. Pricing policy; 2. Accounting policy; 3. Product mix
TQ8B 1. Demographic change; 2. Current economic trends; 3.
Inflation and interest rates
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Assessment Workbook T: Manage Budgets and Forecasts
TQ9: Using the following formula
(selling price) – 1 = mark up % cost
calculate the amounts for the following:
TQ9A COGS (Sales $407,000, mark up 85%)
TQ9B Mark up% (COGS $110,000, Sales $181,500)
TQ9C Sales (COGS $170,000, mark up 80%)
TQ9A : $407000/ (1+85%) = $220000
TQ9B : ($181500 - $110000)/ $110000 = 65%
TQ9C : $170000 x (1+80%) = $306000
TQ10: Sales of inventory are estimated to be $510,000 for the next year.
The inventory purchased is marked up by 70%. Opening inventory is
$45,000 and closing inventory estimated at $32,000. Calculate the
following:
TQ10A amount of purchases;
TQ10B estimated gross profit.
TQ10A : [$510000/(1+70%)] - $45000 + $32000 = $287000
TQ10B : $510000 – [$510000/(1+70%)] = $210000
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Assessment Workbook T: Manage Budgets and Forecasts
TQ11: List which of the following transactions would be included in a cash
budget:
a) depreciation expense on equipment;
b) sale of goods on credit;
c) bad debts;
d) loss on the sale of machinery.
All the above transactions mentioned in the options will be excluded in
the cash budget because they are non-cash transactions
TQ12: Name two (2) situations where a firm would NOT be required to use
the accrual method of calculating GST.
1. Annual turnover is less than $2 million; 2. Income tax is normally
accounted on cash basis
TQ13: Describe the concept of responsibility accounting.
Responsibility accounting help in monitoring as well as reporting
back to management after implementing control procedures. Under this
accounting, it helps in taking relevant remedial actions for rectifying
deviations. It is important for business enterprise to have efficient systems
as well as process for attainment of future goals and objectives.
TQ14: What information is presented in a performance report?
Performance reporting refers as documentation that shows variance
between actual results as well as budget expectations. This report
properly highlights budgeted figures as well as actual figures and then
calculates difference between the two. In addition, monetary variance is
that variance that highlights an increase in sales to that budgeted figures
and it is termed as favorable. On the contrary, if the variance results in a
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Assessment Workbook T: Manage Budgets and Forecasts
decrease in profits, then it is termed as unfavorable. Therefore, the
variance will be disclosed properly either in dollar amounts or as a
percentage. The information that are presented in a performance report is
gross profit and total expenses borne by a company by stating the
budgeted figures, actual figures and calculating the variance between the
two.
TQ15: Consider the term “management by exception”.
TQ15A What is meant by this term?
TQ15B What are the advantages of using this method?
TQ15A Management by exception is a principle used by the
management for concentrating on specific problem or concern that
need urgent attention as well as implementing ways for notifying
the relevant person where there is a significant deviation from a
plan.
TQ15B The advantage of using this method by the management
will help in preparing cash as well as balance sheet budgets. Using
performance reports will help business organization to achieve its
set targets as well as budgets.
TQ16: Why is the contribution margin sometimes referred to as “marginal
contribution”?
Contribution margin or marginal contribution represents the portion
of sales revenue that is not consumed by variable cost as well as
contributes to the coverage of fixed costs. It is calculated by subtracting
all variable costs from sales revenues.
TQ17: Sales are $370,000, indirect labour is $55,000, direct materials
$70,000, factory variable overheads $28,000 and fixed expenses $45,000.
Calculate the contribution margin.
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Assessment Workbook T: Manage Budgets and Forecasts
Particulars Amount
Sales $370,000
Less: Variable Expenses
Indirect Labor ($55,000)
Direct Materials ($70,000)
Factory Variable Overhead ($28,000)
Contribution Margin $217,000
TQ18:
TQ18A Describe the term “participative budgeting” or “bottoms up”
approach to budgeting.
TQ18B Briefly describe an example of a “padded budget”.
TQ18C Briefly describe an example of “budget slack”.
TQ18A Participating budgeting help managers at all levels of
business enterprise to be active for preparing their own budget
estimates. One of the advantages of participative budgeting is that
it helps in improving communication. The bottom up approach result
in getting access to accurate budget as well as personal
commitment from employees.
TQ18B The downside approach is known as padded budget that
are prepared when targets are made easier by under estimating
revenue as well as overestimating expenses.
TQ18C The difference between estimated budget as well as true
estimate for the planned operations is known as budgetary slack.
TQ19: A direct labour variance may be the result of:
a) changes in the exchange rate;
b) the use of substitute materials;
c) changes in production methods;
d) suppliers have updated their prices.
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Assessment Workbook T: Manage Budgets and Forecasts
c) Change in production methods
TQ20: While the main focus of organisations is on financial performance,
other information also needs to be obtained. List four (4) non-financial
indicators that organisations also need to monitor.
1. Training of staff members; 2. Market Growth; 3. Customer
satisfaction; 4. Research and Development
TQ21: List the links of three different budgeting forecasting software
providers.
1. Centage; 2. Prophix; 3. Float
Centage- Centage is one of the budgeting software providers that
provide various tools known as Maestros for budgeting as well as
forecasting and financial reporting. The main feature of this software
provider is budgeting and planning, comprehensive analytics, financial
dashboard as well as reporting and forecasts.
Prophix- Prophix is one of the software provider used for assessing
corporate performance management. The main features of this software
provider is cash flow planning, personnel planning, financial reporting,
statutory reporting as well as profitability optimization and modeling
optimization.
Float- Float is one of the cash flow forecasting as well as budget
management software that help in integrating seamlessly with other tools
such as XERO. The main features of this software provider are cash flow
forecasting as well as business budgeting and visual reporting.
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Assessment Workbook T: Manage Budgets and Forecasts
Exercises
The second part of the assessment covers exercises relating to the
creation and management of budget processes and forecasting. Ideally
you should be able to answer these questions based on the processes that
are currently in place in your workplace. If this is not the case, then answer
the questions based on processes that should be implemented in your
workplace.
The following exercises involve the creation and management of budgets
and forecasts.
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Assessment Workbook T: Manage Budgets and Forecasts
Exercise 1: Brooks Bookstore
Brooks Bookstore is registered for GST but reports on a cash basis. Brooks
Bookstore is preparing a cash budget for the quarter ended 30 September
XXXX. Sales are predicted to be $220,000 in July, $224,000 in August and
$240,000 in September plus GST. Brooks Bookstore always holds a book
sale in the last month of each quarter and expects sales to increase
significantly in September. Cash sales for each month are estimated at
80% of total sales. Credit sales are estimated at 20% of total sales. It is
estimated that 50% of credit customers will pay in the following month of
the sale to take advantage of a 5% discount and the remainder will pay in
the month after that e.g. 50% of credit sales for May will appear in the
budget for July and 50% of credit sales for June will appear in the budgets
for July and August. Sales for May were $215,000 and for June $218,000.
All purchases are made on credit. 80% of credit purchases are paid in the
month following purchase to take advantage of a 4% discount. The
remainder are paid for in the following month e.g. 20%. Purchases were
$150,000 (May), $155,000 (June), $150,000 (July), $165,000 (August) and
$180,000 (September). GST is calculated on a cash basis. Opening cash
balance for the quarter is $69,300.
You are required to prepare the following in Excel or a similar
spreadsheeting application:
TE1A Cash receipts schedule for the cash budget for the quarter
ended 30 September XXXX;
TE1B Cash payments schedule for the cash budget for the quarter
ended 30 September XXXX;
TE1C Integrated cash budget;
TE1D Calculate the amount of GST to be remitted to the Australian
Taxation Office (“ATO”)
TE1E Provide information on the details of your discussions with your
manager (Trainer) and what has been agreed upon as the method
and form of this presentation.
Requirement TE1A:
Cash Receipts Schedule:
Particulars May June July August Septembe Quarter
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Assessment Workbook T: Manage Budgets and Forecasts
r
Total Sales
$215,00
0
$218,00
0 $220,000
$224,00
0 $240,000
$1,117,00
0
Credit Sales $43,000 $43,600 $44,000 $44,800 $48,000 $223,400
Cash Receipts from Customers:
Sales from Previous Month $20,710 $20,900 $21,280 $62,890
Sales from Month before last
month $21,500 $21,800 $22,000 $65,300
Total Cash Receipts from
Customers $42,210 $42,700 $43,280 $128,190
Total Cash Sales $176,000
$179,20
0 $192,000 $547,200
Total $218,210
$221,90
0 $235,280 $675,390
Add: 10% GST Received $21,821 $22,190 $23,528 $67,539
Total Cash Receipts $240,031
$244,09
0 $258,808 $742,929
Requirement TEIB:
Particulars May June July August
Septembe
r Quarter
Total Purchase
$150,00
0 $155,000 $150,000 $165,000 $180,000 $800,000
Credit Purchases
$150,00
0 $155,000 $150,000 $165,000 $180,000 $800,000
Cash Payments to Suppliers:
Purchase of Previous Month $119,040 $115,200 $126,720 $360,960
Purchase of Month before last
month $30,000 $31,000 $30,000 $91,000
Total Cash Payments to Suppliers $149,040
$146,20
0 $156,720 $451,960
Add: 10% GST Paid $14,904 $14,620 $15,672 $45,196
Total Cash Receipts $163,944
$160,82
0 $172,392 $497,156
Requirement TE1C:
Integrated Cash Budget:
Particulars July August
Septembe
r Quarter
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Assessment Workbook T: Manage Budgets and Forecasts
Total Cash Receipts $240,031 $244,090 $258,808 $742,929
Total Cash Payments
($163,944
)
($160,820
)
($172,392
)
($497,156
)
Net Cash Balance $76,087 $83,270 $86,416 $245,773
Add: Opening Cash Balance $69,300 $145,387 $228,657 $69,300
Closing Cash Balance $145,387 $228,657 $315,073 $315,073
Requirement TE1D:
GST Payable:
Particulars July August
Septembe
r Quarter
GST Receipts $21,821 $22,190 $23,528 $67,539
GST Paid
($14,904
)
($14,620
) ($15,672)
($45,196
)
GST Payable to ATO $6,917 $7,570 $7,856 $22,343
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Assessment Workbook T: Manage Budgets and Forecasts
Exercise 2: Montgomery Enterprises
Montgomery Enterprises produces NRL jerseys. The jerseys sell for $80
each. The budgeted income statement for the year ended 30 June XXXX is
as follows:
$
$ $
Sales (10,000) 800,000
Less cost of goods sold (“COGS”)
Direct materials 102,000
Direct labour 200,000
Variable factory overhead 52,000
Fixed factory overheads 75,000 429,000
Gross profit 371,000
Less operating expenses
Selling
Variable expenses 45,000
Fixed expenses 10,000 55,000
Administration expenses
Variable expenses 22,000
Fixed expenses 45,000 67,000 122,000
Net profit $249,000
You are required to:
TE2A Rework the budgeted income statement above to show the
contribution margin.
TE2B Prepare a flexible budget based on the reworked budget in
(a), to include 10,000, 12,000 and 15,000 unit levels of activity. In
your answer show the cost per unit of each variable item.
TE2C The actual results for Montgomery Enterprises were as
follows:
Sales 810,000
Direct materials 105,000
Direct labour 210,000
Variable factory overhead 50,000
Fixed factory overheads 76,000
Variable selling expenses 50,000
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Assessment Workbook T: Manage Budgets and Forecasts
Fixed selling expenses 10,000
Administration variable expenses 28,000
Administration fixed expenses 42,000
Prepare a performance report for 30 June based on the budgeted income
statement (e.g. 10,000 units) by reworking the budget to show what the
expenses should have been, based on actual results . Taking a flexible
budget approach, show favourable and unfavourable activity volume
variance and flexible budget variance against actual results. Actual sales
equal flexible budgeted sales. Calculate amounts to the nearest dollar.
TE2D What budgetary items in (c) above, should be investigated by
the management of Montgomery Enterprises with respect to the
variances in the budgeted figures? Give reasons for your decision.
Requirement TE2A:
Particulars Amount Amount
Sales $800,000
Less: Variable Expenses
Direct Materials $102,000
Direct Labor $200,000
Variable Factory Overhead $52,000
Variable Selling Expenses $45,000
Variable Administration Expenses $22,000 $421,000
Contribution Margin $379,000
Less: Fixed Expenses
Factory Overhead $75,000
Operating Expenses $10,000
Administration Expenses $45,000 $130,000
Net Profit $249,000
Requirement TE2B:
Particulars
Cost per
Unit Total Total Total
Sales Units 10000 12000 15000
Total Sales $80 $800,000 $960,000 $1,200,000
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Assessment Workbook T: Manage Budgets and Forecasts
Less: Variable Expenses
Direct Materials $10.20 $102,000 $122,400 $153,000
Direct Labor $20.00 $200,000 $240,000 $300,000
Variable Factory Overhead $5.20 $52,000 $62,400 $78,000
Variable Selling Expenses $4.50 $45,000 $54,000 $67,500
Variable Administration Expenses $2.20 $22,000 $26,400 $33,000
Contribution Margin $37.90 $379,000 $454,800 $568,500
Less: Fixed Expenses
Factory Overhead $75,000 $75,000 $75,000
Operating Expenses $10,000 $10,000 $10,000
Administration Expenses $45,000 $45,000 $45,000
Net Profit $249,000 $324,800 $438,500
Requirement TE2C:
Particulars
Master
Budget
Activity
Volume
Variance
Flexible
Budget
Actual
Results
Flexible Budget
Variance
Sales
$800,00
0 ($10,000) F
$810,00
0
$810,00
0
Less: Variable Expenses
Direct Materials
$102,00
0 ($1,275) U
$103,27
5
$105,00
0 ($1,725) U
Direct Labor
$200,00
0 ($2,500) U
$202,50
0
$210,00
0 ($7,500) U
Variable Factory Overhead $52,000 ($650) U $52,650 $50,000 $2,650 F
Variable Selling Expenses $45,000 ($563) U $45,563 $50,000 ($4,438) U
Variable Administration Expenses $22,000 ($275) U $22,275 $28,000 ($5,725) U
Contribution Margin
$379,00
0 ($4,738) U
$383,73
8
$367,00
0 $16,738 U
Less: Fixed Expenses
Factory Overhead $75,000 $75,000 $76,000 ($1,000) U
Operating Expenses $10,000 $10,000 $10,000 $0 F
Administration Expenses $45,000 $45,000 $42,000 $3,000 F
Net Profit
$249,00
0 ($4,738) U
$253,73
8
$239,00
0 $14,738 U
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Assessment Workbook T: Manage Budgets and Forecasts
Practical Tasks
The final part of the assessment is a practical task that is based on a case
study in a service or trading organisation. If you are currently working in an
accountancy role, you may answer these questions based on your own
workplace. Otherwise consider what you should do if you were working.
Note: In all instances “XXXX” represents the current year.
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Assessment Workbook T: Manage Budgets and Forecasts
Practical Task: Park & Grosvenor Pty Ltd
Park & Grosvenor Pty Ltd is a small trading firm that provides printing and
stationery supplies. The accounting firm you work for has been
approached by the manager of Park & Grosvenor to prepare a master
budget for the firm for the first quarter of the year.
Sales are estimated for the following quarter as follows:
● January $60,00
● February $30,000
● March $35,000
● April $40,000
In the previous month December sales were $45,000.
Accounts payable balance at 31 December is $28,000.
GST payable at 31 December is $5,000. This amount is to be paid in
January XXXX and is to be included in the cash payments budget for
January.
Cash at bank balance at 31 December $18,500.
Closing inventory at 31 December is $12,000.
Closing stock figure for December, January, February and March is 20% of
next month’s sales. The mark-up on cost of goods sold is set at 80% on
sales e.g. January sales = $60,000/1.8).
Monthly expenses are as follows:
● Advertising 5% of monthly sales
● Electricity $3,600 per annum
● Telecommunications $3,000 per annum
● Rent $1,800 per month
● Salaries $6,000 per month
● Interest $1,000 per month
● Workcover payments 3% of total salaries
● Superannuation 9% of total salaries
These expenses are paid in the month due.
Other operating expenses include:
● Depreciation on furniture and fittings (20% per annum using straight
line method). Residual value on furniture and fittings is $10,000
● Depreciation on office equipment (20% per annum using straight
line method). Residual value on equipment is $10,000. Depreciation
expense is spread over each month.
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Assessment Workbook T: Manage Budgets and Forecasts
Cash sales are estimated at 60% and credit sales 40% of total sales.
Collections from credit sales are 25% in the month of purchase and 75%
in the month following purchase (no discount is allowed for early
payment). All purchases are made on credit and are paid for in the month
following purchase (no discount is received for early payment).
Non current assets are as follows:
● Office furniture and fittings $46,000
● Accumulated depreciation on office furniture and fittings $7,200
● Office equipment $28,000
● Accumulated depreciation on office equipment $9,000
● Capital $71,500
Accounts receivable amount to be included in balance sheet budget is
amount outstanding at 31 March XXXX for March sales.
Accounts payable amount to be included in balance sheet budget is
amount unpaid for purchases at 31 March XXXX.
GST payable to be included in balance sheet budget is the difference
between GST received and paid for the quarter.
Closing stock at the end of each month becomes the opening stock for the
next month.
All amounts are to be rounded to the nearest dollar.
You are required to prepare the following budgets for Park & Grosvenor
for the quarter ended 31 March XXXX using a spreadsheet and MYOB (or
similar financial database application):
TPT1 Sales budget;
TPT2 COGS budget;
TPT3 Purchases budget (include worksheet);
TPT4 Operating expenses budget (including selling, financial and
administration expense budgets and worksheets as applicable);
TPT5 Income statement budget;
TPT6 Cash budget (include worksheets for cash receipts and cash
payments to include GST as applicable);
TPT7 Balance sheet budget;
TPT8 The cash option has been used to calculate GST for the
quarter. Another method to calculate GST is the accrual method.
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Assessment Workbook T: Manage Budgets and Forecasts
Prepare worksheets to display the difference between the
calculations for the two methods.
Requirement TPT1:
Sales Budget:
Particulars January February March Total
Budgeted Sales Volume $60,000 $30,000 $35,000 $125,000
Requirement TPT2:
COGS Budget:
Particulars January February March Total
Budgeted Sales Volume $60,000 $30,000 $35,000 $125,000
Mark Up 80% 80% 80%
COGS $33,333 $16,667 $19,444 $69,444
Requirement TPT3:
Purchase Budget:
Particulars January February March Total
COGS $33,333 $16,667 $19,444 $69,444
Add: Closing Stock $6,000 $7,000 $8,000 $8,000
Less: Opening Stock $12,000 $6,000 $7,000 $12,000
Purchase Budget $27,333 $17,667 $20,444 $65,444
Closing Stock Schedule:
Particulars January February March April
Budgeted Sales Volume $60,000 $30,000 $35,000 $40,000
Stock Margin 20% 20% 20% 20%
Closing Stock $6,000 $7,000 $8,000 $0
TPT4:
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Assessment Workbook T: Manage Budgets and Forecasts
Operating Expense Budget:
Particulars January February March Total
Selling Expenses:
Advertising ( subject to GST) $3,000 $1,500 $1,750 $6,250
Financial Expenses:
Interest $1,000 $1,000 $1,000 $3,000
Administrative Expenses:
Electricity (Subject to GST) 300 300 300 $900
Telecommunication (Subject to GST) 250 250 250 $750
Rent (Subject to GST) 1800 1800 1800 $5,400
Salaries $6,000 $6,000 $6,000 $18,000
Workcover Payments $180 $180 $180 $540
Superannuation $540 $540 $540 $1,620
Other Operating Expenses:
Depreciation on Furniture & Fittings 600 600 600 $1,800
Depreciation on Office Equipment 300 300 300 $900
Total Operating Expenses 13970 12470 12720 39160
TPT5:
Budgeted Income Statement:
Particulars Amount Amount
Total Sales $125,000
Less: COGS
($69,444
)
Gross Profit $55,556
Operating Expenses:
Selling Expenses ($6,250)
Financial Expenses ($3,000)
Administration Expenses ($27,210)
Other Operating Expenses ($2,700)
($39,160
)
Net Profit/(Loss) $16,396
TPT6:
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Assessment Workbook T: Manage Budgets and Forecasts
Cash Budget:
Particulars January February March Total
Total Cash Receipts $61,050 $42,900 $36,850 $140,800
Total Cash Payments $49,405 $42,022 $31,663 $123,090
Net Cash Increase/(Decrease) $11,645 $878 $5,187 $17,710
Add: Opening Cash Balance $18,500 $30,145 $31,023 $18,500
Closing Cash Balance $30,145 $31,023 $36,210 $36,210
Cash Receipt Schedule:
Particulars
Decembe
r January February March Total
Total Sales $45,000 $60,000 $30,000 $35,000 $170,000
Credit Sales $18,000 $24,000 $12,000 $14,000 $68,000
Cash Receipts from Customers
Month of Sales $6,000 $3,000 $3,500 $12,500
Following Month of Sales $13,500 $18,000 $9,000 $40,500
Total Cash Receipt from Customers $19,500 $21,000 $12,500 $53,000
Cash Sales $36,000 $18,000 $21,000 $75,000
Total $55,500 $39,000 $33,500
$128,00
0
Add: 10% GST Received $5,550 $3,900 $3,350 $12,800
Total Cash Receipts $61,050 $42,900 $36,850
$140,80
0
Cash Payment Schedule:
Particulars January February March Total
Total Purchase $27,333 $17,667 $20,444 $65,444
Credit Purchase $27,333 $17,667 $20,444 $65,444
Cash Payments to Suppliers $28,000 $27,333 $17,667 $73,000
Other Payments Inclg. GST:
Advertising $3,000 $1,500 $1,750 $6,250
Electricity 300 300 300 $900
Telecommunication 250 250 250 $750
Rent 1800 1800 1800 $5,400
Total $33,350 $31,183 $21,767 $86,300
Add: 10% GST Paid $3,335 $3,118 $2,177 $8,630
Total Payment inclg. GST $36,685 $34,302 $23,943 $94,930
Payments without GST:
Interest $1,000 $1,000 $1,000 $3,000
Salaries $6,000 $6,000 $6,000 $18,000
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Assessment Workbook T: Manage Budgets and Forecasts
Workcover Payments $180 $180 $180 $540
Superannuation $540 $540 $540 $1,620
Payment of GST to ATO $5,000 $5,000
Total Cash Payments $49,405 $42,022 $31,663 $123,090
TPT7:
Budgeted Balance Sheet:
Particulars Amount Amount
Current Assets:
Cash $36,210
Accounts Receivable $10,500
Closing Stock $8,000
Total Current Assets $54,710
Non-Current Assets:
Furniture & Fittings $46,000
Less: Accum. Depreciation $9,000 $37,000
Office Equipment $28,000
Less: Accum. Depreciation $9,900 $18,100
Total Non-Current Assets $55,100
TOTAL ASSETS $109,810
Liabilities:
Accounts Payable $20,444
GST Payable:
GST Received $12,800
GST Paid ($8,630) $4,170
TOTAL LIABILITIES $24,614
Equity:
Capital $71,500
Reatined Earnings ($2,700)
Add: Net Profit for the quarter $16,396 $13,696
TOTAL LIABILITIES & EQUITY $109,810
COURSE REVIEW
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Assessment Workbook T: Manage Budgets and Forecasts
Provide a short overview of what you have learnt in “course T - Manage Budgets
and Forecasts” and how it will assist you in your role as a bookkeeper. (Your
response must be at least 250 words).
This course work assessment on Managing Budgets and Forecasts was helpful
for me where I was able to collect information on that topic. I have the
essential knowledge now to prepare, document as well as manage essential
budgets and forecasts for monitoring the budgeted outcomes. As a
bookkeeper, I can now prepare invoices or statements for the customers so
that bills can be paid and funds can be collected. Bookkeepers are
responsible for performing general accounting duties. This particular
coursework helped me in maintaining complete sets of financial records as
well as keeping track of accounts and verifying the accuracy of procedures as
it is used for recording financial transactions. Budgeting was explained
properly that help management for control finances, meeting current
requirements, providing funding for future ventures as well as undertaking
financial decisions for attainment of organizational goals. This coursework
helped me to understand the forecasting process as it estimates quantities as
well as values of all the products and services for given period of time. From
this study, I was able to calculate trend analysis by using Microsoft Excel.
Calculation of budgets was done by me in Microsoft Excel by putting
formulas. To become a bookkeeper, I need to use accounting software from
important source documents as it is accurate by nature. My role will be to
develop systems for accounting financial transactions by establishing a chart
of accounts. From this coursework, I have an interest to become a
bookkeeper where I need great data entry skills as well as knowledge about
bookkeeping principles.
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what you thought about it. What did you like about this assessment? What' didn't
you like about this assessment? How could we improve this assessment?
I would like to suggest something that will be helpful for the future learners is
that the coursework should have included more practical questions. The
interesting part of the coursework was to gain insights of information about
managing budgets that will help me when I will become bookkeeper in the
near future. More practical questions would have helped us to gain
understanding about practical implications of budgetary aspects.
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