You have started a restaurant with your brother and your sister. At the end of the financial year total sales revenue was $160,000 and net profit after tax was $20,000.
Instructions
1. Assessments should be completed as per your trainer’s instructions.
2. Assessments must be submitted by the due date to avoid a late submission penalty.
3. Plagiarism is copying someone else’s work and submitting it as your own. You must write your answers in your own words and include a reference list. A mark of zero will be given for any assessment or part of an assessment that has been plagiarised.
4. You may discuss your assessments with other students, but submitting identical answers to other students will result in a failing grade. Your answers must be yours alone.
5. Your trainer will advise whether the assessment should be digitally uploaded or submitted in hard copy. Assessments that are digitally uploaded should be saved in pdf format.
6. You must attempt all questions.
7. You must pass all assessments in order to pass the subject.
8. All assessments are to be completed in accordance with WHS regulatory requirements.
Assessment 2
Part A – Written or Oral Questions
2 Marks per question
1. Explain Cash flow Management.
2. What are the two important benefits of cash flow management?
3. List the three components of cash flow
4. What is the purpose of cashflow planning?
5. When preparing cashflow budget, what will you need to estimate?
6. Complete the following cashflow equation:
? + Estimated Sales – ? = Ending Cash Balance
7. Which component is generally the largest cash outflow in a retail business?
8. What are the two main financial statements prepared in a small business?
9. You have purchased a computer for your business and pay for it in full at the time of purchase with a business cheque ; write down the correct entry for the purchase that you made on behalf of the company.
10. If you knew that your supplier was going to be unable to meet your supply requirements in three months’ time what would you do?
11. What can improve the net cash flow of a business in the short term?
12. How does the analysis of financial reports help you?
13. Provide an example of Operating Activities in Cash flow statement.
14. A business shows the following result for a period
a. Revenue $200,000
b. Cost of goods sold $150,000
c. Operating expenses $100,000
Calculate the Net income of the business.
15. Using the data above, find out the expected cash position at the end of month 2.
MONTH 1 MONTH 2 MONTH 3
Opening cash position -$600
Total receipts $3020 $4680 $3716
Total payments $2840 $3217 $5960
Net cash flow
Closing cash position
Assessment 2
Part B – Written or Oral Questions
Answer the following questions in the spaces provided.
1. You have started a restaurant with your brother and your sister. At the end of the financial year total sales revenue was $160,000 and net profit after tax was $20,000. Your sister has suggested that the profit made during the year should be used to redecorate the premises; but your brother suggested that the money should be used in purchasing a new wood fire oven, so you could start selling take away pizzas. They have approached you in order to help on deciding how the $20,000 should be allocated for the next financial year.
Your sister claims that if the $20,000 is used in redecorating the premises you could increase menu prices by 20%.
Your brother argues that if a new wood fire oven is purchased, the restaurant would be able to sell at least 150 pizzas per month for at least $15.00 each pizza (total cost per take away pizza $4.50).
a. What project would you choose? Why? How would you convince your shareholders that your choice is the right priority for the allocation of the
$20,000? (12 marks)
b. Who else would you consult with before making a decision between redecorating or purchasing equipment? (3 marks)
c. What records would be necessary to keep if the funds are allocated to re- decorating the restaurant? (3 marks)
2. Explain why budgeting is important and why it should be implemented despite the size of the organisation. (5 marks)
3. What are the first and the last days of the Financial Year for a restaurant operating in Australia? (2 marks)
a. How would these dates affect the preparation of your sales budget?
(2 marks)
4. You are taking over your family business. All financial information is kept manually by your father (the owner) of the restaurant. The purchase budgets are currently produced manually by your mother and the financial information/budget forecasts are constantly inaccurate.
a. What technological recommendations you would make to the owners?
(2 marks)
b. What software(s) would you recommend in order to improve the current situation? (1 mark)
c. Describe the main advantages of using a software for developing and monitoring budgets in comparison to keeping manual records. (4 marks)
5. The following data was extracted from the Sales Budget of ABC Pizza Plaza.
Please refer to the table below in order to answers questions a and b.
Financial Year Budgeted Actual
2007/08 $350,000 $290,000
2008/09 $400,000 $250,000
a. Calculate and classify the variances as Favourable or Unfavourable for both years. (4 marks)
b. Describe 3 different events that could possibly justify these variances and suggest relevant approaches that management could adopt in order to effectively manage the deviations found.
(3 marks + 6 marks)
6. Adam Smith was responsible for managing his brother’s Coffee Shop for 2 months while his brother went on holidays. Unfortunately his brother did not budget very well for the weekly beverage supply and Adam was, every week, short of beverages. In order to solve the last minute beverage shortages
Adam made weekly purchases in the local supermarket. Adam paid for the goods on his credit card and did not bother keeping the invoices. According to this scenario explain:
a. What are the legal implications/record keeping requirements that were not met by Adam? (4 marks)
b. What techniques would you suggest to the owner of the coffee shop in order to improve the budgeting accuracy for purchases of beverage stock? (5 marks)
Part B total: 56 marks
Assessment 2 total: 86 marks
1. Assessments should be completed as per your trainer’s instructions.
2. Assessments must be submitted by the due date to avoid a late submission penalty.
3. Plagiarism is copying someone else’s work and submitting it as your own. You must write your answers in your own words and include a reference list. A mark of zero will be given for any assessment or part of an assessment that has been plagiarised.
4. You may discuss your assessments with other students, but submitting identical answers to other students will result in a failing grade. Your answers must be yours alone.
5. Your trainer will advise whether the assessment should be digitally uploaded or submitted in hard copy. Assessments that are digitally uploaded should be saved in pdf format.
6. You must attempt all questions.
7. You must pass all assessments in order to pass the subject.
8. All assessments are to be completed in accordance with WHS regulatory requirements.
Assessment 2
Part A – Written or Oral Questions
2 Marks per question
1. Explain Cash flow Management.
2. What are the two important benefits of cash flow management?
3. List the three components of cash flow
4. What is the purpose of cashflow planning?
5. When preparing cashflow budget, what will you need to estimate?
6. Complete the following cashflow equation:
? + Estimated Sales – ? = Ending Cash Balance
7. Which component is generally the largest cash outflow in a retail business?
8. What are the two main financial statements prepared in a small business?
9. You have purchased a computer for your business and pay for it in full at the time of purchase with a business cheque ; write down the correct entry for the purchase that you made on behalf of the company.
10. If you knew that your supplier was going to be unable to meet your supply requirements in three months’ time what would you do?
11. What can improve the net cash flow of a business in the short term?
12. How does the analysis of financial reports help you?
13. Provide an example of Operating Activities in Cash flow statement.
14. A business shows the following result for a period
a. Revenue $200,000
b. Cost of goods sold $150,000
c. Operating expenses $100,000
Calculate the Net income of the business.
15. Using the data above, find out the expected cash position at the end of month 2.
MONTH 1 MONTH 2 MONTH 3
Opening cash position -$600
Total receipts $3020 $4680 $3716
Total payments $2840 $3217 $5960
Net cash flow
Closing cash position
Assessment 2
Part B – Written or Oral Questions
Answer the following questions in the spaces provided.
1. You have started a restaurant with your brother and your sister. At the end of the financial year total sales revenue was $160,000 and net profit after tax was $20,000. Your sister has suggested that the profit made during the year should be used to redecorate the premises; but your brother suggested that the money should be used in purchasing a new wood fire oven, so you could start selling take away pizzas. They have approached you in order to help on deciding how the $20,000 should be allocated for the next financial year.
Your sister claims that if the $20,000 is used in redecorating the premises you could increase menu prices by 20%.
Your brother argues that if a new wood fire oven is purchased, the restaurant would be able to sell at least 150 pizzas per month for at least $15.00 each pizza (total cost per take away pizza $4.50).
a. What project would you choose? Why? How would you convince your shareholders that your choice is the right priority for the allocation of the
$20,000? (12 marks)
b. Who else would you consult with before making a decision between redecorating or purchasing equipment? (3 marks)
c. What records would be necessary to keep if the funds are allocated to re- decorating the restaurant? (3 marks)
2. Explain why budgeting is important and why it should be implemented despite the size of the organisation. (5 marks)
3. What are the first and the last days of the Financial Year for a restaurant operating in Australia? (2 marks)
a. How would these dates affect the preparation of your sales budget?
(2 marks)
4. You are taking over your family business. All financial information is kept manually by your father (the owner) of the restaurant. The purchase budgets are currently produced manually by your mother and the financial information/budget forecasts are constantly inaccurate.
a. What technological recommendations you would make to the owners?
(2 marks)
b. What software(s) would you recommend in order to improve the current situation? (1 mark)
c. Describe the main advantages of using a software for developing and monitoring budgets in comparison to keeping manual records. (4 marks)
5. The following data was extracted from the Sales Budget of ABC Pizza Plaza.
Please refer to the table below in order to answers questions a and b.
Financial Year Budgeted Actual
2007/08 $350,000 $290,000
2008/09 $400,000 $250,000
a. Calculate and classify the variances as Favourable or Unfavourable for both years. (4 marks)
b. Describe 3 different events that could possibly justify these variances and suggest relevant approaches that management could adopt in order to effectively manage the deviations found.
(3 marks + 6 marks)
6. Adam Smith was responsible for managing his brother’s Coffee Shop for 2 months while his brother went on holidays. Unfortunately his brother did not budget very well for the weekly beverage supply and Adam was, every week, short of beverages. In order to solve the last minute beverage shortages
Adam made weekly purchases in the local supermarket. Adam paid for the goods on his credit card and did not bother keeping the invoices. According to this scenario explain:
a. What are the legal implications/record keeping requirements that were not met by Adam? (4 marks)
b. What techniques would you suggest to the owner of the coffee shop in order to improve the budgeting accuracy for purchases of beverage stock? (5 marks)
Part B total: 56 marks
Assessment 2 total: 86 marks
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