Financial Resource Management Report: BSBFIM801 - All Assessments

This report, addressing BSBFIM801 Manage financial resources, comprehensively examines various aspects of financial management. It begins with an introduction to financial resources and their importance. The report is structured around six assessments, each delving into specific areas. Assessment 1 explores accounting principles, financial statements, cash flow principles, communication processes, compliance requirements, and the costs associated with capital, capital structure, and working capital. The subsequent assessments likely build upon these foundational concepts, providing in-depth analysis and practical applications related to managing financial resources effectively within an organizational context. The report integrates theoretical knowledge with practical insights, offering a well-rounded understanding of financial resource management.

BSBFIM801 Manage financial resources

Contents
INTRODUCTION.....................................................................................................................................4
ASSESSMENT 1........................................................................................................................................4
ASSESSMENT 2......................................................................................................................................13
ASSESSMENT 3......................................................................................................................................18
ASSESSMENT 4......................................................................................................................................39
ASSESSMENT 5......................................................................................................................................45
ASSESSMENT 6......................................................................................................................................47
APPENDIX 1............................................................................................................................................51
APPENDIX 2............................................................................................................................................51
APPENDIX 3............................................................................................................................................52

INTRODUCTION
Financial resources are a term in which consist of all the financial funds of a business
entity. These resources are essential part of business that help to conduct all the operational
activities in effective manner (Rodriguez-Fernandez, 2016). Various kinds of funding are utilized
by an entity such as, cash in the bank, venture capital and assets of company can convert cash
easily. These resources are required to manage in business in proper manner in which consist of
money they want to invest to start new venture. An essential source of income is the public
investment because people can purchase shares and presents an effective term of enhancing
capital. This report based on the managing financial resources of different organizations. In this
report consist of various assessment that based on the different financial activities.
ASSESSMENT 1
QUESTION 1 Explain the principles of:
Accounting- The term accounting can be known as a process of recording all financial
transactions in a systematic manner. The aim of accounting to get useful information during
preparation of financial statements. There are some principles of accounting which are as
follows:
 Accrual principle- This is the principle which states that financial records must be
documented when they take place in the financial period, instead of in the cycles when
capital expenditures are correlated with each other. This really is the basis of accounting's
accrual basis. Instead of being arbitrarily put on hold or sped up by the related cash flows,
it is crucial for the development of cash receipts and payments what truly occurred in an
accounting cycle.
 Conservatism principle- This is the principle in which companies can report costs and
obligations as rapidly as feasible, but only if they are confident they will exist, to record
sales and assets (Keehn, 2016). This gives the financial results a cautious slant that could
produce lower reported earnings, as sales and acknowledgment of assets could be
postponed for some time. Conversely, this theory appears to facilitate early, rather than
later, the recording of losses. This description may be pushed too far, where an

organsiation routinely misrepresents its consequences to be less than is actually the
situation.
 Cost principle- This is the principle that a corporation should report its cash, liabilities,
and equity contributions only at their initial cost of acquisition. When a host of
accounting principles are going the way of changing revenues and expenses to their equal
values, this concept is becoming less true.
Principles of Financial statements: Financial statements are formal reports of a
company, individual, or other entity's financial transactions and role. Specific financial data is
delivered in a standardized and simple way. Below some key principles are mentioned in such
manner:
 Income statement: As per the principle there should be calculation of gross and net gains
and losses on the basis of accounting rules and accept, for a given duration, that the rise
(or decrease) of total income over that time is profit margin (or loss).
 Balance sheet- As per the principle there should be recognize that statements of asset and
responsibility balances on a defined date are non-current assets (fixed assets), capital
resources, total revenues, interest expense (creditors: sums due within 12 months),
lengthy obligations (borrowers: amounts due for more than one year), capital
expenditures, hired capital and owned capital are recognized and described.
Rules to prepare financial statements for different entities:
Sole trader-
 Explain the distinction between a trading firm and a service company planning income
reports.
 Allow allowances for accumulated and prepaid costs and changes for poor loans and
provisions for uncertain obligations for accrued and prepaid profits.
 Making changes to products bought for us by the holder.
Limited liability companies:
 Understand the value of the word restrictive liability.

 Prepare clear horizontally or vertically allocation accounts to grasp and differentiate
between approved, called-up, paid-up share capital.
 Recognize and discern between share capital and loan resources (preferred stock and
common equity).
Principle of cash flow: The cash flow statement outlines the impact of a company's
running, spending and borrowing operations on cash mostly during accounting cycle. It reflects
on previous business decisions on topics including the issuing of shares or the selling of lengthy
securities. This detail is only accessible from the other financial reports in bits and pieces. While
cash flows are essential to the financial stability of a business, the cash flow statement
executives, analysts, lenders, and other stakeholders with critical data. Below principles of cash
flow statement are mentioned in such manner:
The cash flow statement assumes an action structure which is broken into three sections:
activities of business, acquisition and funding. Operating events are generally listed first,
followed by acquisition activities and, ultimately, funding activities. The cash flow theory
implies that the cumulative cash flows arising from that are only net income applicable to the
value of a project (Usman and Vanhaverbeke, 2017). The concept of discounted cash flow (DCF)
is built on the presumption that the value of a portfolio is approximately equal to the current
value of its potential expected cash flows. By either the direct method or the indirect method,
the operational component of the statement of cash flows can be seen. The investing and
supporting areas are the same for each method; the only distinction is in the operational portion.

The key types of gross sales invoices and gross cash transfers are illustrated by the direct
process. In the other hand, the indirect approach continues with net profits and changes the
results of the sales on profit/loss. Cash flows from the operational segment will eventually
deliver the same outcome, whether underneath a direct or indirect approach, but the
representation will vary.
QUESTION 2: Briefly describe best-practice communication processes and methods.
The only way people can do amazing challenges is by a linked team and a linked
enterprise in modern environment. With the sharing of thoughts and knowledge, interactions and
relationships are created. In building these relations and interaction between individuals,
communication serves as a powerful method. A very important talent and craft is collaboration.
It is essential to have the correct purpose to communicate with the other person, no care what
way of communicating we use. Below some methods of communication are explained:
 Written communication: This applies to handwritten or registered papers, such as
schedules, agreements, memos, meeting notes, paper review of specifications, risk
registers for design documentation and other associated written materials. It is used to
have well-thought-out and also well information, so it is easier to check than verbal
contact because it is not possible to change anything written instantly.
 Oral communication: It requires the sharing of information or signals through orally
using phrases through face-to-face or mobile interactions (Shah, Sahai and Mishra, 2017).
It is the most popular mode of conversation, since it paves the way for suggestions right
after the message has been sent. It is understood that it is also random. The capacity to
listen and consider deeply before communicating is important in verbal contact.
 Nonverbal communication: Without the use of language, non-verbal contact is
transmitting information. It is mostly via the language of one's body, movements, eye-
contacts, posture, pitch and sound of one's speech, etc. One can express immense
thoughts and emotions.
 Visual communication: A image is a thousand words worth a picture. Written
correspondence is significantly enhanced by visual aids including such animation,
graphics, animation, graphs & maps, painting, signs and badges. In order to make

knowledge sharing more accessible and successful, visual contact is often used in the
correct mix.
So these are methods of communication which are best in practice and need to be applied
in the context of companies for better outcome.
QUESTION 3: Briefly describe compliance requirements, including relevant legislative
responsibilities.
Compliance usually involves agreeing with a regulation, such as a definition, procedure, norm or
statute. Regulatory enforcement defines the aim that companies strive to accomplish in their
attempts to ensure that they are mindful of the applicable rules, legislation, and legislation and
take action to conform with them (Eniola and Entebang, 2016). Due to the growing number of
laws and the need for organsiational accountability, the use of standardized and harmonized sets
of compliance controls is gradually being embraced by organizations. This strategy is used to
insure which, without any of the needless duplication of initiative and operation from capital, all
relevant governance criteria can be fulfilled. Regulatory enforcement varies not only by sector
but also by venue. The financial, science, and medicinal regulatory frameworks in one nation, for
example, could be identical but with significantly unique nuances in an another nation. This
similarities and variations are also the result of actions in different nations, markets and policy
environments to shifting priorities and specifications.
QUESTION 4: Explain the cost of-
Cost of capital: Capital expense is the interest earned needed to make an investment
appraisal initiative worthwhile, like constructing a new plant. Usually, as owners and statisticians
analyze the cost of capital, they mean the weighted average of the debt and equity costs of a
business combined together. The cost of the capital calculation is used collectively by businesses
to assess if the expense of resources is worthwhile a capital venture and by shareholders who use
it to evaluate if an expenditure is worth taking the risk as opposed to the gain. Capital costs
depend on the method of funding used. It applies to the equity cost if the corporation is funded
solely by assets, or to the debt expense if it is creating the actual by debt. Cost of capital, from
the viewpoint of a shareholder, is the return required by whoever is supplying the wealth for a
company. In other terms, it is an estimation of the vulnerability of a corporation. In doing so, to

decide if a certain inventory is too risky but would create a decent investment, a shareholder can
look at the variability (beta) of the financial performance of a firm. The capital cost of a business
is usually estimated using the capital method's cost model that includes the cost of both debt and
equity financing. In necessary to come at a consolidated rate, each segment of the company’s
capital structure is weighted correspondingly, and the calculation includes any type of debt
financing on the profit and loss account, except stockholders, shares, and other types of debt.
Cost of capital structure: The structure of capital of business is way of financing overall
growth and operations with the help of different funding sources. The composition of capital
applies to the amount of debt and/or equity that a business uses to support its activities and fund
its resources (Picken, 2017). The financial structure of a company is usually expressed as a
percentage of debt-to-equity or debt-to-capital. Debt and capital ratio are used to support the
purchases, capital costs, investments, and other assets of a firm. When they determine which to
use leverage or equity to fund projects, there are compromises businesses have to make, and
management can combine the two to find the optimal cash position. A firm's optimum financial
performance is also described as the debt and equity which resulted in the company's lowest
value of the firm cost (WACC). In fact, this technical definition is not often utilized, because
companies also have a tactical or conceptual interpretation of what will be the optimal
framework. A company may issue either more debt and equity in order to optimize the
framework. As a method of recapitalization, the additional money that is acquired can be used to
invest in new investments or can be used to buy back debt/equity that is already unpaid.
Cost of working capital: The cost of working capital is related to those expense which
are related to managing day to day operations and activities for a company. These expenses are
considered on the basis of two distinct factors: firm’s short term expenses and current portion of
lengthy term debts which is usually the part of debt during the upcoming time period. All types
of expenses are can be identified on company’s balance sheet in current liability part. In the
current liabilities portion of their balance sheets, many businesses have at least two categories of
accounts: accrued liabilities and payroll payable. In addition, the particular items categorized as
current liabilities differ across industries and sectors and they're more focused on which day-to-
day operations are essential to the organsiation. In the industrial sector, for instance, the expenses
involved with the transformation of raw materials to finished goods are also defined as WCC.

The purchasing and handling of raw resources can be linked to huge parts of a company's overall
budget. In the other side, a tech corporation could see larger portions of its existing liabilities
controlled by the expense and sale of design and technology (R&D).
Question 5 Identify and describe finance and investment decision
The Investment Decision refers to decisions taken by investors or strategic planning at the
highest level in regards to the quantity of financial resources to be used in the context of business
opportunities.
Simply, it is considered an investing choice to choose the type of resources wherein the funds
will be spent by the corporation. Such properties fell into two classifications:
Capital Budgeting is defined as the decision to spend money in long-term investments.
Therefore, Capital Budgeting is the method of choosing an asset or project plan that will load
quickly returns (Caha, 2017). The first important step in Capital Budgeting is to pick a resource
on the grounds of the gains that will be extracted from it in the potential, either present or fresh.
The next step is the study of the complexity and risk inherent in the plan. Because the profits are
to be accumulated in the future, the ambiguity about the return is large. Lastly, it is important to
set the required rate of return on which the success of the long mission will be measured.
The amount invested in existing assets or brief resources is referred to as the maintenance of
working capital. The control of operating capital works with the management of available

resources that are incredibly liquid. The decision to invest in short-term assets is critical for an
enterprise, when long-term sustainability requires short-term survival. A business seeks to
preserve a trade-off among financial performance through the cash management. If a corporation
has less operating capital, i.e. less funds invested in short-term investments, so the company will
not be able to cover off its existing liabilities and will collapse. Or if the company has more
existing assets than appropriate, it may have a detrimental impact on the company's profitability.
Question 6 Describe the goal of financial resource management
The goal of financial resource management is that organization is increasing profit which
can be reviewed by computing the gross margin and net profit margin ratios. The other goal of
arranging resources is to deduct the cost through company's expenditure. The meaning of
financial management that planning, managing and guiding and controlling different financial
activities like procurement and utilization of funds of an entity. There are mentioned different
financial goal of financial resource management such as:
Maximizing shareholder value: It is goal of finance resource management to increase shareholder
value that comes from interpretations the role of corporate governance (Huang and Knight,
2017). In large business entity manage financial resources in effective manner and invest into
securities properly that provide back good returns. On the basis of these return provide good
return to their shareholders. Thus, it will help to increase value of holders and increasing their
wealth by paying dividends due to increase market price.
Maximizing market value: The main goal of financial resource management that increasing the
market value which is connected to idea of increasing shareholder value as market value is the
price. There are various models of corporate governance all over the world that differ from
variety of capitalism which are embedded. Every organization want repudiated position in the
market to get growth and sustainability. For this require to increase market value properly and
take right decisions.
Question 7 Principles of financial relevant to the organization's operations

The first rule in financing is that the essence of capital is time. The dollar received now, in other
words, would be more important than the dollar received in the future. In order to make more
profits, money will then be spent. Inflation is a continuous rise in the overall cost of the cost of
goods and services.
The connection between risk and reward is clarified by the second principle of finance. The
bigger the incentive, the greater the risk. This theory implies that if the profit is minimal, having
a high-risk expenditure is a waste of money (Weber and Feltmate, 2016).
The Third Finance Theory notes that portfolio diversifying, or the allocation of investment and
liability over several different undertakings, will minimize the ultimate risk of the lender. This is
critical because the absence of portfolio diversity will raise market risk for the shareholder.
The Fourth Finance Theory says that even in pricing shares, capital markets are successful. The
business tracks a company's reports, projected estimates, supply and demand, and other
variables. This theory could not be the right approach for stakeholders, based on historical
evidence, because the capital markets in itself are effective and the financial climate is still
evolving.
The fifth principle of financing is that the priorities of a shareholders and managers can vary.
The supervisor is doing what they think is profit maximization. The shareholder, on the other
side, needs the price of the inventory to rise so that the shareholder can buy the property to
maximize their capital at a better profit.
The sixth finance principle states that credibility makes a difference. Credibility has a major
impact on an investment's plans to spend in a financial asset or not. A financial product is a
written matter indicating the right to obtain a property that can be traded, including such money,
the contractual right to produce or take funds, or any other form of equity. Firms with similar
credibility will encourage more individuals to purchase their stocks. Companies with lower
credibility can have trouble persuading individuals to purchase securities.
Question 8 Explain risk and return
Risk: It is defined as a financial term that presents uncertainty in regard deviation
expected earnings. Risk measures the uncertainty of an investor that willingly take to realize a

gain from an investment. It can be deducted by using diversification and hedging strategies.
There are various types of risk that arise in the business because of losing some or all an
investment. These are, market, financial, business, liquidity, sovereign, insurance risk.
Return: It can be presented minimal as the change in dollar value of an investment over
time. It is presented in percentage manner that derived from the ratio of profit of investment
(Zenghelis and Stern, 2016). Return can also be presented as net outcomes in which deduct after
fees, taxes and inflation. Returns are mainly annualized in comparison way while holding for
period return and computes the gain or loss during the investment time was held. It is mainly
calculated in percentage manner from the original investment after that manager cam analysis
and compare how well their investment and efficient in market. The overall amount of
investment is mainly based on a lot of different things but it considers as main force is risky. It is
highly investments reap a greater rate of return than low risk investments.
ASSESSMENT 2
Part A: Budget Preparation
(a) Objective of budgeting:
 The budget is helpful for companies in order to track their financial activities by making
comparison with actual outcome.
 This contributes in making effective financial plans and strategies for companies which
lead to competitive advantage.
(b &c)
Axis trading co. budget
2018
actual
2019
Budget
Sales revenue
Coffee beans 158000 154050
Homeware and toys 45000 47250
Lavender bags, handbags 18000 19800
Christmas hampers 30000 32250

Organic produce and oils 8000 8000
Total sales revenue 259000 261350
Cost of sales
Product sales 110000 121000
Import duties 8500 8925
Freight inbound and
handling 12700 12700
Freight insurance 5300 5300
Total cost of sales 136500 147925
Gross profit 122500 113425
Operating expenses
Sales and marketing
expenses 15000 16500
Occupancy expenses 38000 39900
Administration expenses 10000 10200
Employee expenses 30000 30250
Other expenses 5000 5000
Total operating expenses 98000 102350
Net profit 24500 11075
(d)
Product Sept-18 Dec-18 Mar-19 Jun-19
Total
2015
Coffee beans 39500 39500 39500 35550 154050
Christmas hampers 7500 9750 7500 7500 32250
(e)
Budgeted Cash inflow for sales, equals:
Budgeted sales 2019 261350

Add : 2018 actual sales accounts
receivables 25000
Less: 2019 budgeted sales receivables 30000
25635
(f)
 Head of Stores of Wholesale/Sales Management teams · to get an understanding of
system overall sales for the year; any fresh opponents; any new rules that may affect
sales; any predicted price increases; anticipated marketing costs; new marketing ng
candidates; general market growth and economic expansion
 Head of Procurement -to u understand product costs; costs of freight, import duties,
insurance; any new regulations which may impact product costs; estimated labor hours
 H R Manager -to understand if any new staff expected and expected turnover; u
understand wage increases
 Internal Audit Manager -find out if any internal control issues which may impact the
budget
 Accounts collection manager -for estimation of 2019 accounts receivable
 Accounts payable manager -for informal on suppliers and whether any potential supply
 issues.
 Financial Controller -to obtain actual 30 June 2018 balances; They would assist in the
preparation of budget spreadsheets and other calculations.
Part B – Budget Monitoring
(a &b)
Axis trading co. budget 2019 Budget 2019 budget (By Variance

(From part 1) management)
Sales revenue
Coffee beans 154050 158000 3%
2% or
greater
Homeware and toys 47250 46000 -3%
2% or
greater
Lavender bags, handbags 19800 20000 1%
Christmas hampers 32250 31000 -4%
2% or
greater
Organic produce and oils 8000 8100 1%
Total sales revenue 261350 263100
Cost of sales
Product sales 121000 124000 2%
2% or
greater
Import duties 8925 8970 1%
Freight inbound and handling 12700 12800 1%
Freight insurance 5300 5350 1%
Total cost of sales 147925 151120
Gross profit 113425 111980
Operating expenses
Sales and marketing expenses 16500 15500 -6%
2% or
greater
Occupancy expenses 39900 37500 -6%
2% or
greater
Administration expenses 10200 10300 1%
Employee expenses 30250 29000 -6%
2% or
greater
Other expenses 5000 5050 1%
Total operating expenses 102350 97350
Net profit 11075 14630

(c) Identify at least one possible reason giving rise to each of the variances you have identified in
Part B (for example one reason for each variance, which is four reasons in total).
Coffee beans: one new competitor was not allowed from coming the coffee bean sector because
of tight rules set by government. As a consequence, the above mentioned company could manage
its current price and sales.
Homewares and toys: The price increase of 10% produced ATC items less comparative and real
revenues dropped, resulted in lower sales than predicted.
Christmas hampers: a main marketing supplier went in the management and was not able to
provide complete on Christmas marketing program. Due to which real sales of Christmas
hampers was lower than budgeted items.
Product cost: As a result of the suppliers of homewares and toys raised their prices by 10%
which lead to increase in expense of product from the above mentioned budget.
Sales and marketing expenses: a main marketing supplier went in the management and was not
able to provide complete on Christmas marketing program. Due to which cost of advertising was
lower than budgeted items.
Occupancy expenses: The management department was able to re-negotiate the 2019 leasing for
the company without raise in rental occurring till 1st of January 2020, hence actual expenses for
rent were lower than budget.
Employee expenses: Wage raised will not occur till 1/7/19 and many employees went away from
ACC. Due to which the overall cost of employees was lower than budget in 2018 actual.
(d) Note two changes to the budget processes you recommend be implemented after
consideration of the results of the variance analysis and the information contained in the internal
management report.
 Preparation of more number of budgets- for instance monthly and quarterly budget for all
revenues and cost items.

 Review procedure for collecting data from additional shareholders with an aim to assure
that they are known of role of advising finance department when changes occur to
business activity.
 The finance department must create a basic budget schedule for using of all divisions.
This must include guidelines for completing.
TASK B
Covered in PPT
ASSESSMENT 3
Case Study 1
(a) Asset Register Card:
Description- A bottling machine
Assets ID: VMM06JKTRO460275
Location: Factory 4 @ Axis trading
Supplier: Machinery co. pty limited
Residual value: $15000
Depreciation method: reducing
Depreciation rate: 10%
Useful life: 15 years

Date Details
Original
price $
Additional
cost $
Total
cost $
Depreciatio
n
Carryi
ng
amoun
t
31/03/
21 Purchase price 100000 100000
Freight 600 100600
Installation cost 2280 102880
30/6/2
1
Depreciation (3
months)
257
2
257
2
10030
8
30/6/2
1
Depreciation (12
months)
100
31
126
03
90277
30/6/2
1
Depreciation (12
months)
902
8
216
31
81249
30/9/2
3
Depreciation (3
months)
203
1
236
62
79218
Disposal
-
75000
Loss on disposal -4218
Repairs, maintenance and other information
Date Service provider Details of
work
Cost
31/3/21 ABC insurance Insurance 1400
Quick repairs limited Repairs,
maintenance
420
Disposal details

Date Details of disposal cost
30/9/23 Trade in for a new machine 75000
Working Note:
Description- A bottling machine
Assets ID: VMM06JKTRO460275
Location: Factory 4 @ Axis trading
Supplier: Machinery co. pty limited
Residual value: $15000
Depreciation method: reducing
Depreciation rate: 10%
Useful life: 15 years
Date Details
Original
price $
Additional
cost $ Total cost $
Accumulated
$
Written down
$
31/03/18 Machine 110000 5170 115170 11000 99000
31/03/19 9900 89100
31/03/20 8910 80190

B &C. Prepare general journal entries:
Date Particulars Folio DR $ CR $
30/6/21 Depreciation – machinery 2572
Accumulated depreciation-
machinery
2572
(3 months depreciation computed at
10% reducing balance method)
Profit and loss 2572
Depreciation – machinery 2572
30/6/22 Depreciation – machinery 10031
Accumulated depreciation-
machinery
10031
(12 months depreciation computed at
10% reducing balance method)
Profit and loss 10031
Depreciation – machinery 10031
30/6/23 Depreciation – machinery 9028
Accumulated depreciation-
machinery
9028
(12 months depreciation computed at
10% reducing balance method)
Profit and loss 9028
Depreciation – machinery 9028

30/9/23 Depreciation – machinery 2031
Accumulated depreciation-
machinery
2031
(3 months depreciation to date of
disposal)
Sale of non-current assets 102880
Machinery 102880
(Transfer capital cost to disposal
account)
(D)
30/6/21 Depreciation- machinery 2572 2572 CR
30/6/22 Depreciation- machinery 10031 12603 CR
30/6/23 Depreciation- machinery 9028 21631 CR
30/9/23 Depreciation- machinery 2031 23662 CR
Sale of non-current assets 23661 Nil
Sale of non-current assets
30/9/23 Machinery 102880 102880 DR
Accumulated depreciation:
machinery
23662 79218 DR
machinery 75000 4218 DR
Loss on sale of machinery 4218 Nil
Loss on sale of machinery

30/9/23 Sale of non-current assets 4218 4218 DR
General ledger:
Date Particulars JR DR CR Balance
Machinery
31/3/21 Balance 102880 DR
30/9/23 Sale of non-current assets 102880
Sale of non-current assets and
bank
125000 125000 DR
Depreciation: Machinery
30/6/21 Accumulated depreciation:
machinery
2572 2572 DR
Profit and loss 2572
30/6/22 Accumulated depreciation:
machinery
10031 10031 DR
Profit and loss 10031
30/6/23 Accumulated depreciation:
machinery
9028 9028 DR
Profit and loss 9028
30/9/23 Accumulated depreciation:
machinery
2031 2031 DR

Working notes:
Depreciation 11000
Accumulated Depreciation 11000
Depreciation 9000
Accumulated Depreciation 9000
Depreciation 8910
Accumulated Depreciation 8910
Closing entries
Cash 110000
Machine 110000
Cash 102666
Machine 102666
Cash 95333
Machine 95333
Cash 80190
Machine 80190
Date Description DR CR
31/03/18 Opening Balance of Machinery 110000
Liabilities 110000

31/03/18 Depreciation 11000
Accumulated Depreciation 11000
31/03/18 Cash received 99000
Machine 99000
(e)
1. Senior accountant’s permission is needed for changes regarding to annual depreciation.
2. Corrections for mistakes in liability of the senior accountant as per the guidelines.
3. AASB101 presentation of financial statements.
Case Study 2
General journal:
Date particulars Folio DR CR
30/06/2024 Stock 11800
Trading 118
(Record closing stock)
Office wages 400
accrued expenses 400
(Wages owing)
1200
Commission revenue 120
Prepaid revenue
(Commission received in advance)
Depreciation: Plant and machinery 4760
accumulated depreciation: plant and machinery 476

(Depreciation @ 20% reducing balance)
Depreciation: Motor and vehicles 3600
accumulated depreciation: Motor and vehicles 360
(Depreciation @ 10% straight line)
Accrued revenue 1400
rent received 140
(Rent revenue earned but not yet received)
Interest on loan 160
accrued expenses 160
(Interest owing)
Prepaid expenses 400
advertising 400
(Advertising paid in advance)
Long service leave expense 665
provision for long service leave 665
(Raised the provision for long service leave to 5% of toal wages and salaries
Annual leave expense 400
provision for annual leave 400
(Raised provision for annual leave to $2200)
Bad debts 400
GST payable 40
Trade debtors control 440
(Extra bad debts written off)

Allowance for doubtful debts 1000
Bad debts 100
(Transfer of bad debts to allowance for doubtful debts)
Doubtful debts 816
allowance for doubtful debts 816
(Provision for 4% of closing debtors estimated to be doubtful)
Case Study 3
General journal:
Date particulars Folio DR CR
30/06/2025 Trading 24000
stock 24000
(Transfer of opening stock)
Stock 21000
Trading 21000
(Record closing stock)
Purchase returns and allowances 1200
sales 154000
purchase. 101200
custom duty on purchase 10000
sales return and allowances 2000
Cartage inwards 1520
Trading 40480
(Closing entry)

Trading 37480
Profit and loss 37480
(Transfer of gross profit)
Profit and loss 38380
discount received 1800
commission received 17430
insurance 1260
discounted allowed 800
interest on loan 4800
salaries 30000
freight outwards 4750
electricity 2000
rent 12000
telephone 800
depreciation: furniture and equipment 1000
(Closing entry)
capital 6900
profit and loss 900
drawings 6000
(transfer net loss and drawings)
Ledgers:
Date Particular Folio Debit Credit Balance
Bank
30/06/2025 Balance 45200 DR

Capital
30/06/2025 Balance 52500 CR
Profit and Loss 900 51600 CR
Drawings 6000 45600 CR
Drawings
30/06/2025 Balance 6000 DR
Capital 6000 Nil
Trade Debtors Control
30/06/2025 Balance 50000 DR
Trade Creditors Control
30/06/2025 Balance 18000 CR
Stock
1/7/2024 Balance 24000 DR
30/06/2025 Trading (opening stock) 24000 0
30/06/2025 Trading (closing stock) 21000 21000 DR
Furniture and Equipment
30/06/2025 Balance 7000 DR
Accumulated Depreciation - Furniture and Equipment
30/06/2025 Balance 2000 CR
GST payable
30/06/2025 Balance 3800 CR
Purchases

30/06/2025 Balance 101200 DR
Trading 101200
Purchase return and allowances
30/06/2025 Balance 1200 CR
Trading 1200 0
Custom duty on purchases
30/06/2025 Balance 10000 DR
Trading 10000
Sales
30/06/2025 Balance 154000 CR
Trading 154000
Sales Return and allowances
30/06/2025 Balance 2000 DR
Trading 2000 0
Insurance
30/06/2025 Balance 1260 DR
Profit and Loss 1260
Discount Allowed
30/06/2025 Balance 800 DR
Profit and Loss 800
Discount Received
30/06/2025 Balance 1800 CR

Profit and Loss 1800
Interest on loan
30/06/2025 Balance 4800 DR
Profit and Loss 4800
Cartage Inwards
30/06/2025 Balance 1520 DR
Trading 1520 0
Salaries
30/06/2025 Balance 30000 DR
Profit and Loss 30000
Freight Outwards
30/06/2025 Balance 4750 DR
Profit and Loss 4750
Electricity
30/06/2025 Balance 2200 DR
Profit and Loss 2200 0
Rent
30/06/2025 Balance 12000 DR
Profit and Loss 12000
Accrued Expenses
30/06/2025 Balance 300 CR
Loan - RFS Bank

30/06/2025 Balance 54000 CR
Commission Received
30/06/2025 Balance 17430 CR
Profit and Loss 17430 0
Telephone
30/06/2025 Balance 800 DR
Profit and Loss 800
Prepaid Expense
30/06/2025 Balance 500 DR
Depreciation - Furniture and Equipment
30/06/2025 Balance 1000 DR
Profit and Loss 1000
Trading
30/06/2025 Sales 154000 154000 CR
Sales returns and allowances 2000 1542000 CR
Purchases 101200 50800 CR
Purchase returns and allowance 1200 52000 CR
Stock (1/04/2024) 24000 28000 CR
Custom duty on purchases 10000 18000 CR
Cartage inwards 1520 16480 CR
Stock (30/06/2025) 21000 37480 CR
Profit and Loss 37480 0

Profit and loss
30/06/2025 Trading 37480 37480 CR
Insurance 1260 36220 CR
Discount Allowed 800 35420 CR
Discount Received 1800 37220 CR
Interest on loan 4800 32420 CR
Salaries 30000 2420 CR
Freight outwards 4750 2330 DR
Electricity 2200 4530 DR
Rent 12000 16530 DR
Commission Received 17430 900 CR
Telephone 800 100 CR
Depreciation - furniture and
equipment
1000 900 DR
Capital 900 0
Post-Closing trial balance
As at 30 June 2025
Account Debit $
Credit
$
Bank 45200
Capital 45600
Trade debtors control 50000
Trade creditors control 18000
Stock 21000

Furniture and equipment 7000
Accumulated depreciation - Furniture and
equipment 2000
GST payable 3800
Accrued Expenses 300
Loan - RFS Bank 54000
Prepaid Expenses 500
123700 123700
c) Post Closing trial balance
Axis adjusted trial balance as at 30/02/2022
Account
No. Account Name Dr ($) Cr ($)
Previous Closing
balance 305030 305030
1-1105 Cash 17300
3-1105 Liability 6000
2-1105 Cash Control 32000
6.33
Depreciation
Account 2000
Accumulated Depreciation a/c 1000
Case study 4
Axis Trading Group
Income Statement for the period ending on 30/06/2023
$
Sales Revenue 282000

Cost of goods sold (Purchases) -151200
Gross Profit 130800
Operating Expenses -37200
Sales Expenses -42120
Administrative Expenses -30800
Total operating expenses -110120
Other Income 15500
Net Profit 36180
Operating
Expenses =
3200 + 9800 +1200 + 2600 + 8400 +750
+5400+1100+4750 = 37200
Sales
Expenses =
1800+2000+1500+800+1520+25000+9500=42120
Admin
Expenses =
28000 + 2800 = 30800
Other income
=
970+1700+12830 = 15500
Depreciation considered as an expense

Difference between accrual accounting and cash reporting. In method of cash reporting,
transactions are reported as the cash amounts receive or as the payments are made (Brouer,
Gallagher and Badawy, 2016). Although in case of accrual accounting, corporation didn't
received cash as well as whenever revenue is completed. This is regarded as revenue has been
earned.
A. Income Statement
Income Statement
For the year ending 30 June 2026
$ $ $
Sales 282000
Less: Sales return and allowances 2000 280000
Net Sales
Less: Cost of Goods Sold
Stock (1/07/2025) 69000
Purchases 151200
Less: Purchase returns and allowances 970 150230
Wharf age fees 1800
Insurance on stock 1500
Freight inwards 1520
Cost of goods available for sales 224050
Less: Stock 30/06/2026 57000

Cost of Goods Sold 167050
Gross Profit 112950
Add: Other revenue
Commission Revenue 12830
Discount Received 1700 14530
127480
Less: Operating Expenses
Advertising 1200
Depreciation: Delivery Vehicle 5400
Depreciation: Office furniture 750
Discount Allowed 800
Doubtful debts 325
Electricity 2600
Freight Outwards 4750
General Insurance 3200
Interest on loan 9800
Office Wages 28000
Rent 8400
Sales commissions 9500
Sales Wages 25000
Telephone [phone]
Net Profit (Loss) 24955

B. Key differences are:
Accrued Expenses $800
Prepaid Expenses $750
C. Statement of financial position
Statement of financial position
As at 30 June 2026
$ $ $
Owner's Equity
Capital 34495
Add: Net Profit 24955
59450
Less Drawings 16000
Total Equity 43450
Represented By:
Current Assets
Bank 58500
Trade Debtor Control 15000
Less: Allowance for doubtful debts 300 14700
Stock (30/06/2026) 57000
Prepaid Expenses 750

Total Current Assets 130950
Less: Current Liabilities
Trade Creditor control 18000
GST payable 2500
Less: Input tax credits 1100 1400
Accrued Expenses 800
Total Current Liabilities 20200
Working Capital 110750
Add Non-current Assets
Delivery Vehicles 27000
Less: Accumulated Depreciation 12800 14200
Office furniture 4000
Less: Accumulated Depreciation 1500 2500 16700
127450
Less: Non-current liabilities
Loan - Brown Loans (due 2030) 84000
Net Assets 43450
ASSESSMENT 4
Part 1
What is the EPS under each option?

Option one: 1800000-750000/3500000
= 0.30
Option two: 1800000-750000/3500000-7000
= 0.306
What is the EBIT at the indifference point?
Option one: 1800000
Option two: 1800000
Provide an explanation of the indifference point.
In the EBIT indifference level although 2 different plans are used EPS remains as same.
What is the degree of Financial Leverage?
The degree of leverage computes the sensitivity of EPS when capital is used. In the case when
leverage is low than this is assumed that business is stable.
What is your recommendation as to the most appropriate option based on EPS?
In accordance of above computed EPS, this can be inferred that option one is suitable as under it
there is scope to produce higher return in upcoming time period.
What is the Goodwill on acquisition?

In the accounting term goodwill is considered as an asset which is computed by deducting fair
value from purchase cost.
Discussion of other factors to be considered.
Cost, competitors, benefits are the other factors which need to be consider.
The information on which your calculations are made have been audited and comply with
financial legislation:
No, evaluation is same to option which I made about choosing option one for acquisition.
Part 2
a) the importance of diversification and how it works
The diversification is helpful in order to reduce risk of lower return. This can become possible
because under it companies can classify the assets as per their risk level and can choose suitable
assets for investment (Anguelov and Angelova, 2017).
b) the relationship between risk and return
There is a significant relation between risk and return as if company will take lower risk than
there will be less opportunity to generate return vice versa.
c) the capital structure of the company
Low leverage:
Assets (100) Debt (40)
Equity (60)

High leverage:
Assets (100) Debt (60)
Equity (40)
d) the costs of different forms of capital available to the company
Ordinary share, preferred share, debenture and loans.
e) the financial requirements of the company
The financial requirements of the company are equity finance and debt finance.
f) the advantages and disadvantage of listing on the ASX.
Advantages:
 More public attention
 More investors
 Secondary market
Disadvantages:
 Cost and fees
 Negative media
 20% free float needed
g) dividend policy

In the aspect of investors, dividends can be provided on two different policies which are stable
dividend policy and constant dividend policy (Lega and Sartirana, 2016).
h) investment goals and options available
 Cash investments
 Shares
 Bonds
 Gold
 Managed funds
i) taxation implications of options/strategies
Capital gain tax: By selling assets
Debt management: Taking loans
Lodging tax before deadlines
Part 3
Recommendation: In accordance of above done calculation of NPV this can be inferred that old
machine is producing negative NPV of (172612368). While if we can buy new machine than also
NPV is negative which is of (137420284).
Part 4
1. Lease proposal

2. By choosing the lease proposal Axis trading NPV is $123342.22 and it is positive
amount. Hence, this can be suggested that lease project need to be selected.
Part 5
1. Interest rate risk impacts company in different ways and amount that need to pay for
dividends and lease payments will varied base on that (Pradhan, Arvin and Nair, 2016).
2. There are different kinds of ways to minimize short term currency risk:
 By hedging of bets
 Buying undervalued currencies
 Limiting overseas orders.
3. (a) BEP: Fixed cost/revenue-variable cost
1000000/ (25-(10+5)
= 100000 units
(b) Yes, company can generate profitability after crossing the point of break even or selling
the 100000 units.
4. Coal burnings emits greenhouse gases and thus it is against the environmental policies of
Axis limited and policy of sustainability.
5. Yes, company like ALH for a lengthy term control must be evaluated and audited. When
there are loopholes issues can rise and this can damage brand name of company.

6. Ethics play a significant role in financial performance. Integrity is a crucial for each and
every employee and this is safe for a company.
7. IT manager: Network engineers, web designer and hardware engineer.
8. In the case when there is a divisional organizational structure employee in every layer
will share liabilities. But if there is hierarchy based structure, then management team will
have more power.
9. In the case, if an issue of information is stored than we can use them as a proof. While a
company can analyze their information for a particular time period before taking any
decision.
10.
 All reports must be audited.
 Foot notes need to be recorded.
 Annually financial details must be mentioned in annual report of company.
Part B: Presentation
ASSESSMENT 5
Part A– Presentation
Part B– Written report
1. a. A risk treatment plan:

Being a traditional company, that relies on manual approaches Axis company has huge amount
of risk of losing their clients and raising of operational expenses. If we can introduce the initial
cost will more in starting but we can cover that from 5 to 7 years during reducing the expenses.
We are facing a waste because of traditional methods and the time which required to provide a
service to a customer is high.
(b) Recording system for risk management:
As the business is not applying a recording system for management of risk. Axis trading is
always introducing the risk on annual base and which is too late to introduce a method of
treatment (Rosbach and Andersen, 2017). The department of finance must maintain a month
based system to issue and we can easily overcome the issue in base stage.
2. Ethical, legal and organizational consideration for risk management:
 Integrity: each employee is liable with integrity and connecting them is a best for
management of risk.
 Responsibility- The supervisor only take into the liability will raise the risk.
 The productivity of company will increase.
3. Evaluation risk against exposure factors:
Ranking the risks- some risks can be more complex and thus they require to be recognized
immediately.
Frequency of risk- some risk can occur on a regular basis like employees need leave.
4.
a) Identify and developed procedure for the risk:

In order to reduce the risk of operations modern technology and equipment must be used. Like
Axis can take loan for 7 years and can pay installments without issue.
b) Managing stock can reduce the risk in different ways like above company cannot operate
stock at any point. So they can deliver goods all time without any time postpone.
5.
a) By help of applying traditional methods, this can be projected that company can get net
margin of $22000 in year 2019. If Axis company use similar method than they may lose some
clients because of time which required to offer the service.
b) Variance help in different ways:
Trend variance: There are some months which result lower or higher sales and by finding those a
company can make modifications.
Take action: By identifying variances, financial department can get actions.
6. Review and evaluation process:
When above company will apply technological modifications than in 1st year company can raise
their revenues by $5000 after paying for loan finance. As well as with new methods they can
work with full of efficiency.
ASSESSMENT 6
Section 1
a) Its core business: The core business for above company is of wholesale. As they operate
in different outlets in Australia.

b) The industry in which it operates: The industry of above company is retail business and
they work across different nation in Australia.
c) Number and type of employees: Number of employees in above organizations are joined
for long term and number of employees varies as per need and nature of tasks.
d) Current information systems and specifications, including:
database design- In the aspect of above company data base is managed by help of an
appropriate system which is bank account management.
networking capacities- In the above organization the network capacities are wider in
nature as they have number of branches to make connection.
system size- The size of system depends on number of tasks and operations which are
performed on a daily basis.
Speed- The speed of software must be strong enough in order to deal with different
multitasks.
financial functions- In above organization, financial functions are performed by help of
excel function.
Section 2
(a) The user requirements for information systems: User requirements, frequently referred to
as person wishes, describe what a user does with system, along with what sports that
customers have to be capable of carry out. person necessities are typically documented in
a consumer requirements report (URD) the usage of narrative textual content. person
necessities are usually signed off through the person and used because the primary input
for creating key system requirements (Belbase and Sanzenbacher, 2017). A vital and
tough step of designing a software program product is figuring out what the user
absolutely wants it to do. that is due to the fact the user is regularly not able to speak the
whole thing of their want and desires, and the records they offer can also be incomplete,
misguided and self-conflicting. The responsibility of absolutely knowledge what the
purchaser wants falls on the business analyst. that is why person requirements are
generally taken into consideration one after the other from system requirements. The

commercial enterprise analyst cautiously analyzes user necessities and punctiliously
constructs and files a set of excessive best system necessities ensuring that that the
requirements meet positive satisfactory traits.
(b) Accounting data and security: Accounting data involves key records of origination
including transactions. The data may in soft copy or hard copy. There are three key users
of data namely: Business analysts, Auditors and Accountants (Vanacker, Collewaert and
Zahra, 2017). Thus security is primary concern here for organization. Following are key
security requirements which are required to be considered for accounting data, as
follows:
 Password Protection
 Proper authorization control
 Multi-Factor Authentication
 Encryption of data
(c) Name one policy and procedure document:
i. Risks faced by the organization and the management of those risks: Risk Register
- A risk register act as efficient tool to manage risk which help managers to
control and minimize risks involved.
ii. Controls and processes for expenditure (on capital and expense items): Expense
Memorandum register- In this register, daily expenses are reported as well as
authorized by concerned personnel. This assist management to efficiently
optimize and track expenses.
iii. Compliance with legislative and statutory requirements: Compliance register- In
this register all the policies and practices relating to compliance of legal and
regulatory requirements are reported to assist management.

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APPENDIX 1
APPENDIX 2

APPENDIX 3