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

Assessment Details
Qualification Code/Title Diploma of Accounting
Assessment Type Assessment -2 Time allowed
Due Date Location AHIC Term / Year
Student Details
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Student Declaration: I declare that the work submitted is my own,
and has not been copied or plagiarised from any person or source.
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Date: _____/______/__________
Assessor Details
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RESULTS (Please
Circle) SATISFACTORY NOT SATISFACTORY
Feedback to student:
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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.
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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.
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
Filename FNSACC501-Provide Financial and Business Performance
Information
Version 3.0/ July 2017 Review Date: Aug
2018
Page 1 of 17
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
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
Filename FNSACC501-Provide Financial and Business Performance
Information
Version 3.0/ July 2017 Review Date: Aug
2018
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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
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
Filename FNSACC501-Provide Financial and Business Performance
Information
Version 3.0/ July 2017 Review Date: Aug
2018
Page 3 of 17

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.
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
Filename FNSACC501-Provide Financial and Business Performance
Information
Version 3.0/ July 2017 Review Date: Aug
2018
Page 4 of 17