Financial and Business Performance Assessment: Tax Legislation, Forecasting, and Loan Calculations

The given data is an assessment for the unit "FNSACC501-Provide Financial and Business Performance Information." It includes sections on student and assessor details, instructions, and project tasks. The first part involves answering questions on tax legislation and forecasting returns. The second part discusses NFP sector organizations' adherence to government financial policies. The last task involves creating a spreadsheet summarizing repayment amounts for a long-term loan. Overall, the assessment focuses on financial and business performance information.

Assessment Details
Qualification Code/Title Diploma of Accounting
Assessment Type Assessment -2 Time allowed
Due Date Location AHIC Term / Year
Student Details
Student Name Student ID
Student Declaration: I declare that the work submitted is my own,
and has not been copied or plagiarised from any person or source.
Signature: ____________________________
Date: _____/______/__________
Assessor Details
Assessor’s Name
RESULTS (Please
Circle) SATISFACTORY NOT SATISFACTORY
Feedback to student:
.........................................................................................................................................................................................
.........................................................................................................................................................................................
.........................................................................................................................................................................................
.........................................................................................................................................................................................
Student Declaration: I declare that I have been
assessed in this unit, and I have been advised of my
result. I am also aware of my appeal rights.
Signature: _______________________________
Date: ______/_______/___________
Assessor Declaration: I declare that I have conducted a fair,
valid, reliable and flexible assessment with this student, and I
have provided appropriate feedback.
Signature: ________________________________________
Date: ______/_______/___________
Instructions to the Candidates
 This assessment is to be completed in class supervised by assessor.
 Should you not answer the questions correctly, you will be given feedback on the results and your gaps in knowledge. You will
be given another opportunity to demonstrate your knowledge and skills to be deemed competent for this unit of competency.
 If you are not sure about any aspect of this assessment, please ask for clarification from your assessor.
 Please refer to the College re-submission and re-sit policy for more information.
 If you have questions and other concerns that may affect your performance in the examination please inform the assessor
immediately.
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Unit of Competency
National Code/Title FNSACC501-Provide Financial and Business Performance Information

Project 1
Part 1
1. How are business expenses treated in regard to tax legislation? Discuss in 30 to 50 words.
As per the provisions which is stated in tax legislations, any business expenses which in ordinary
sense helps the business to generate revenue are deductible in nature. Such expenses are
deducted from the assessable income and after which tax liability of the business is computed.
2. What allowance in tax legislation is there for businesses that are managed on behalf of a
trust? Discuss in 80 to 100 words.
The trusts form of businesses does not attract tax as the same is applicable on individuals unless
the trust is corporate public or trading trusts as defined in the Income Tax Assessment Act 1936.
The net income which is generated by a trust is taxable at the hands of the beneficiary
regardless of whether the income was actually received by him or not. The trust need to be
registered under the tax laws and also needs to file tax returns for the assessable income
generated by it.
3. Describe forecast returns and set up and describe a simple table over several years for
similar amounts. Discuss in 50 to 80 words.
Forecasting of returns are done by business for the purpose of planning for the revenue and
profits which can be generated for the future period. There are numerous methods which can be
used for the purpose of forecasting returns for a business such as moving average method,
Delphi method and similar other methods as well. A table showing forecasted returns for the
years 2020 is shown using moving average method.
Return forecast using 3 years Moving Average Method
Year Returns Forecasts
2015 1000
2016 1200
2017 1500
2018 2000 1233.33
2019 2100 1566.67
2020 1866.67
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4. Describe (150 to 180 words) how NFP sector organisations adhere to government financial
policies where the preparation of statutory returns are required.
The tax obligations for NFP Sector businesses which are operating in Australia may cover goods
and services tax(GST), income tax, land tax and in addition to this NFP sectors are also not
eligible for rebates and deductions. A not For Profit seeking business are not eligible for
exemptions which are allowed to other business and they also need to file tax returns on their
assessable income. However, it must be considered that the rate at which taxes are charged on
such businesses are lower than taxes charged on other businesses. The ATO specifies the NFP
businesses on the basis of the activities which are carried on by such businesses. It is to be noted
that the provisions which are stated by ATO would be considered in case any rebates or
exemptions are applicable to such a business.
5. Your client is XYZ company. After discussions it is identified they require a spreadsheet
summarising the repayment amounts and current balance for a long-term loan of $500,000
to be repaid over eight years at a rate of 10% per annum. They are interested in business
information that will show the amount they need to repay each year.
Show the calculations required for the loan.
Prepare the spreadsheet for the loan. Include a summary section to comment on the table.
Round the initial opening balance of the loan up to the nearest dollar and round up to
present values in whole dollars.
Year
s Particulars
Principal
Payment
Interest
Payment
Repayment
Amount
Balance
Amount
1
Loan
repayment 62500 50000 112500 437500
2
Loan
repayment 62500 43750 106250 375000
3
Loan
repayment 62500 37500 100000 312500
4
Loan
repayment 62500 31250 93750 250000
5
Loan
repayment 62500 25000 87500 187500
6
Loan
repayment 62500 18750 81250 125000
7
Loan
repayment 62500 12500 75000 62500
8
Loan
repayment 62500 6250 68750 0
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6. List the four categories that client’s business performance objectives can be set up as.
The four categories for measuring clients businesses performance objectives can be set up with
the help of
 Reports generated by the business
 Meetings conducted with the management
 Presentation made by the client
 Documenting procedures
7. What does GPFRU’s mean? List three potential users.
GPFRU stands for general purpose financial reporting framework which is used for reporting
financial information and effectively present the information so that the users are able to
understand and interpret the same. The potential users of the framework are corporate houses,
financial institutions, banks, potential investors.
8. What type of clients can expect state and territory charges? Discuss in 50 to 80 words.
The clients which can expect states and territory charges are clients engaging in gambling or
horse racing. In addition to this, some clients who are covered under Charitable Collection Act
2003 would also be considered for this aspect.
9. How can the amount of taxes and charges on land be calculated? Discuss in 50 to 80 words.
The taxes and charges which are associated with land can be computed by firstly estimating the
value of the land and on the basis of the value of land annual fees or charges which is associated
with the land. The rates levied which is levied by the government also must be considered for
computing annual charges.
10. What practices should these businesses and those who pay Commonwealth taxes complete?
Discuss in 80 to 100 words.
Common wealth taxes are taxes which are paid between state and territory and such taxes are
paid for the public services which is provided by the government and also includes transfer
payments which is made by the government. These types of taxes include stamp duty, payroll
taxes and similar other types of taxes.
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Part 2
1. Use the supplied CIF to answer the questions listed.
a. Where can information about client objectives be found?
The information which is related to clients objectives is included in financial information
sought section of the client information form.
b. Describe (80 to 100 words) how the Type of business section on the supplied CIF is
relevant to the client’s legal and financial requirements, explain how this is important to
taxation.
The type of businesses which is shown in the Customer Information file for the customer is
shown to be associated with building services. The client information file shows that the
client is a sole proprietor and the computation of taxes depends on the services which is
provided by the proprietor and also the revenue which is generated by the proprietor. There
are certain regulations which are applicable to construction business and the same
provisions needs to be considered in tax computations as well.
ABC Financial Management
Client Information Form
Surname Citizen
First name John
Employment title Manager
Other key staff
Type of business Building services Sole proprietor
Financial Provide ongoing financial management especially in the reduction of annual
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information sought income tax and checking goods and services tax (GST) and other legislative
reports.
Size Four full-time or equivalent staff.
Business assets $550,000 Tools, vehicles, building inventories
Revenue $ 1 Million
Expenses $ 680,000
Cash flow –$50,000
Number of years
operating
Current
information
Internal reports by part-time administrative staff. Includes fortnightly payroll
and payment of accounts and banking.
2. You have had discussions with the client who has explained that you were recommended
through a colleague in the NFP sector who you have been providing acquittal services to.
Describe the different types of financial options that are available for different clients related
to the provision of business performance information. Discuss in 150 to 180 words.
3. Prepare an example of a forecast versus actual for XYZ company for an operational project.
Include columns to show forecast returns versus actual on a multi period report. Include a
summary section.
In the books of XYZ ltd
Peri
od
Forecasted
Return
Actual
Return
Varian
ce Summary Statement
Year
1 50000 45000 -5000 The actual return is lower than budgeted return
Year
2 55000 60000 5000
The actual return is shown to be higher than
budgeted return
Year
3 60500 59000 -1500 The actual return is lower than budgeted return
Year
4 66550 70000 3450
The actual return is shown to be higher than
budgeted return
Year 73205 75000 1795 The actual return is shown to be higher than
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5 budgeted return
4. At what stage of financial management would you discover that the actual rates of returns are
significantly lower than those returns forecasted? Discuss in 30 to 50 words.
The actual returns of the business can be seen to be significantly lower than forecasted return when
comparison is made between the actual results and forecasted results of the business. Therefore, it
can be said that the evaluation of the financial performance of the business and comparison with
estimated results are done at the last stage.
5. What would be the agreed criteria and what other steps would need to be taken? Discuss in 30
to 50 words.
The management of the company needs to investigate on the causes of the variances between the
actual estimates and the budgeted estimate which was set by the management of the company for
the financial year.
6. You work for ABC financial management. Your client is XYZ company. The CEO contacts you
directly on the 1st July, thanking you for the satisfaction of current objectives in line with the
financial plan. Current objectives are reporting annual financial reports including preparing the
BAS.
The client asks that this now ceases as the finance officer will take over the duties. The client
asks that you prepare a manual to assist the finance officer in their new duties. The client also
asks that you now assist with preparing for and recording monthly governance board meetings.
a. Prepare a quarterly financial management questionnaire for the current quarter to
show the current and proposed new objectives as if they had been discovered as a
result of the quarterly questionnaire process.
b. Prepare a file note to properly record the main points of your phone call with the
CEO.
7. Your client contact is the finance officer of XYZ company. They phone you briefly on 1.10.20xx
and say that the financial position detail report contains too much detail. They also state that
there is no explanation for the changes in financial position even though they know that
several new desks were purchased in the previous quarter because they recorded them on the
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asset register. Prepare a file note to show how the feedback will be incorporated into services
to the client.
8. Your client is XYZ company. They phone you on 15.11.20xx and question what has caused them
to pay higher than normal GST. Your investigation shows that the income amount included the
previous year’s income. Record a file note to implement improved customer services.
9. Consider the two sets of financial data shown.
GEF Organisation BAS Summary Sheet
Prepared by the Financial Officer
For the period ending 30.9.20xx
GST Received on income $2,500
GST Paid on expenses $2,500
Plus PAYG on wages $10,000
GST Payable/ (Receivable) $10,000
From the ATO
GEF Organisation BAS Summary Sheet
Prepared by the Financial Officer
For the period ending 30.12.20xx
GST Received on income $100,000
GST Paid on expenses $2,500
Plus PAYG on wages $10,000
GST Payable/ (Receivable) $107,500
From the ATO
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a. What would be of interest to the financial manager responsible for preparing the BAS
based on the reports? Discuss in 30 to 50 words.
The GST Payable of a higher amount would be beneficial for the business as this would
provide more deductions to the business and allow the management of the company to
claim more deductions and thereby creating a favorable impact on the final price which is
offered to the consumers.
b. For what reason would this be of interest? Discuss in 30 to 50 words.
This would be creating a favorable impact on the price which is charged by the business on
the final price which is established by the management of the company.
c. What steps should the financial manager take in this scenario? Discuss in 50 to 80
words.
The step which the finance manager needs to take is to ensure that the financial information
which is shown in the BAS Statement is appropriate and appropriate submit the same to
ATO for consideration.
10.Use the following information to prepare a bank reconciliation for KLM company.
Closing account balance 30.6.20xx, $68,000
Unpresented cheques:
Number 100 $5,000
Number 101 $5,000
Number 102 $3,000
Number 103 $4,000
KLM Bank Statement extract
June 20xx
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Date Detail Dr Cr Balance
20.6.20xx Cheque number 98 $10,000 $80,000
25.6.20xx Deposit $10,000 $90,000
30.6.20xx Cheque number 99 $5,000 $85,000
Bank Reconciliation Statement for KLM ltd
Particulars
Amt
$
Amt
$
Closing Balance as per Bank Statement
8500
0
Less: Unpresented Cheques
Number 100 500
0
Number 101 500
0
Number 102 300
0
Number 103 400
0
1700
0
Bank Balance as per Cash Book 6800
0
11. Consider the financial performance comparisons. Provide analysis (150 to 180 words) to
describe the comparisons.
KLM Company
Comparison of financial performance
2012 and 2013
Account 2012 2013 $ Difference Per Cent Common Size (per cent of sales income)
2012 2013
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Sales Income $230,000 $320,000 $90,000 39 100 100
Cost of sales $115,000 $165,000 $50,000 43 50 51.6
Wage Costs $30,000 $45,000 $15,000 50 13 14
Transport Costs $25,000 $35,000 $10,000 40 10.9 10.9
Marketing Costs $15,000 $20,000 $5,000 33 6.5 6.3
Total costs $185,000 $265,000 $80,000 43 80.4 82.8
Profit $45,000 $55,000 $10,000 22 19.6 17.2
The above analysis which is presented in the table above shows the financial performance of the
business for the year 2013. The overall sales of the business is shown to have enhanced which is a
positive sign for the business. In addition to this, the management has also considered the figure of
sales for common size analysis. The cost of sales has also increased as the overall sales of the
business has increased. The cost of sales forms 51.6% of the total sales figure which I a favorable
sign. The total cost of the business is shown to be around 80.4% of the total sales in 2012 while the
same is shown to be 82.8% which shows that there has been a marginal increase in sales for the
business. The profit has increased but in marginal terms the same has declined and this shows that
the management of the business needs to reduce the overall costs of the business so that overall
profits of the business can be further enhanced.
12. Consider the supplied cost–benefit analysis.
a. Complete the cash flows in the table.
b. Considering the effect on cash flow, is the analysis worthwhile? Discuss in 30 to 50
words.
QRS Co. Motor vehicle expense account
Cost–benefit analysis using
Budget versus Actual Variance Reporting
October 20xx
Month Existing Estimate Change to Effect on:
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Income Expenses Cash Flow
July $700 -$700
Aug $750 -$750
Sept $800 -$800
Oct $900 -$900
Nov $950 $830
Dec $800 $680
Jan $800 $680
Feb $800 $680
Mar $800 $680
Apr $800 $680
May $800 $680
June $800 $680
Total $9,700 $5,590
13. Which ratio is used to measure financial stability? Discuss in 80 to 100 words.
The ratio which is considered to be important for measuring the financial stability of the business is
known as liquidity ratios. The most important estimate for the liquidity ratio is current ratio as the
same is closely associated with the ability of the business to meet with current obligations of the
business. The current ratio also depicts the liquidity position of the business and the ability of the
business to manage and invest in projects.
14. Use the financial statement to calculate the debt ratio including a discussion (80 to 100 words).
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XYZ Ltd
Financial Statement Extract
As at 30.6.20xx
Item Financial year 20xx
Total assets $1,500,000
Current assets $300,000
Total liabilities $250,000
Profit $200,000
Particulars
Formul
a Amt $
Total assets A
$1,500,00
0
Current
assets B $300,000
Total
liabilities C $250,000
Profit D $200,000
Debt Ratio C/A 0.1667
The above table shows the computation of debt ratio for the business and the same is computed to
be 0.1667 which is significantly lower. The debt ratio is computed considering the total liabilities of
the business and total assets of the business. The estimate shows that the business has low debt
utilization and maximum of the capital fund is contributed by equity capital. The analysis is show to
be favorable for the business and the overall risks of the business would also be low
15. Consider this report. At what stage of the financial management process would the report be
prepared? Discuss in 50 to 80 words.
TUV Co - Extract
September 20xx
Expectations and Objectives Analysis
Analyse the business financial
performance
Reports have been prepared analysing the client’s business in
comparison to industry averages.
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Summary:
TUV Co’s owners have asked that their business be analysed to determine if the financial
performance is acceptable. The review has been performed annually for the previous three years.
The business analysis consists of performing ratio analysis on the financial statements supplied by
the client’s finance officer. The analysis identified that the business was: profitable, stable and
efficient compared with other businesses in the same industry.
The analysis is currently prepared in a one-page executive summary and sent to the owners of TUV.
As a result, the client has continued operations. The client has consistently made reference to the
interest of the finance officer through phone calls and on the annual client questionnaire.
Actions:
The client recently commented that they would prefer a more comprehensive report that describes
the analysis with the aim of promoting the finance officer to manager. The client would like to
effectively hand over the business operations to the FO.
Therefore, the ratio analysis summary will be expanded to include all workings and explanations.
The financial plan will need to be updated and formally agreed to by the client. A letter will be
prepared by the financial manager and sent to the client suggesting that they book an interview at
their earliest convenience.
The report which is required by the client needs to be prepared at the planning stage itself so
that client would be appropriately assess the financial performance of the business and the
take appropriate decisions accordingly.
16. It is the end of the financial year and your client is XYZ company. From the following file note
summary prepare an evaluation report.
File note summary XYZ company. Financial potential $33,000 annually for the previous three
years. Accumulated surplus $100,000. Statutory requirements: prepare and lodge BAS and IT.
Compilation assurance. Reports provided by XYZ’s CEO. Preference to invest in government
bonds. No contingency cash expected.
17. You work for ABC financial management. What are the consequences for clients of not meeting
reporting deadlines? Discuss in 50 to 80 words.
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The major issue which management of the company faces when reporting deadlines are not meet
is associated with loss reputation and fall in the market shares of the business. The management of
the company is also likely to face penalty for missing the deadline of the business.
18. Prepare a fictitious financial plan extract that includes sections on financial information sought,
compliance and reporting deadlines.
19. Prepare a column graph from the following table. Computer applications which produce charts
can be used if you prefer.
Month
Activity Level:
Patient - Days
January 5,600
February 7,100
March 5,000
April 6,000
May 7,300
June 8,000
July 6,200
Your client, XYZ company enters transactions which they send to you to prepare their tax
return. They have had difficulty in identifying which transactions to record. Expenses have been
underreported and this has resulted in over taxation. The main expense underreported is for
motor vehicle fuel expenses which occur away from the business. How would this situation
affect your preparation of the financial plan? Discuss in 30 to 50 words.
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Activity Level: Patient - Days
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Chart Title
January February March April May June July
The above case shows that the expenses of XYZ Ltd has been underreported which has increased
their taxation. The motor vehicle expenses are eligible for deductions under tax legislations and
therefore the same would affect the financial planning as this would have an impact on the
profitability of the business.
20. It is the end of the financial year. Your client, XYZ company requires assistance identifying and
managing the risks of taxation compliance.
Prepare a financial extract to identify and manage risks by advising your client which
transactions to collect and enter in the accounting system. Include revenues and expenses.
Specifically mention livestock selling expenses that are incurred away from the business and
for which the manager often forgets to collect a receipt. Describe how bank accounts can be
set up to ensure this type of transaction is recorded.
21. On the 30th June 20xx you advise your client, XYZ company to take out a loan. The business
contact requires a loan to fund a long-term amount where $100,000 is borrowed and
compounded at 10% annually for five years. The formula is:
FV = PV (1+i)ⁿ
Perform the calculation to achieve the total amount of the loan over the five years. What is the
annual repayment amount?
Present the loan in an appropriate table showing the zero closing balance at the end of five
years.
Amount of Loan $ 100,000.00
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Time period 5 years
Rate of Interest 10%
Future Value $ 161,051.00
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