purchase for the year is a luxury car for the chairman. Aged debtors AGED DEBTORS BUDGET TOTAL Qtr 1 Qtr 2 Qtr 3 Qtr 4 Sales 16,971,236 3,394,247. 00 4,073,0 97.00 4,421,522. 00 5,091,371.0 0 % Debtors Sales 3733672.14 20% 20% 20% 20% Total Debtors 100% 678,849.40 814,619.40 882,504.40 1,018,274.20 Current 84% 570233.496 684280.296 742815.696 855350.328 30 Days 10% 67884.94 81461.94 88430.44 101827.42 60 Days 5% 33942.47 40730.97 44215.22 50913.71 90 Days 1% 6788.494 8146.194 8843.044 10182.742 Historical records show the estimated amount of receivables at the end of the quarter, approximately 20% of sales in the quarter. At any time receivables, 1% of all accounts TAD20A BSBFIM601 Version: 2.1 Implemented: November 2018 To be reviewed: November 2019 Responsibility: Head trainer © The Wales Institute Pty Ltd Page 4 of 19
BSBFIM601 Manage finances payable over 90 days up to 5% for outstanding 60 days and 10% of the total balance of all accounts are current. The budget of the elderly accounts will only be distributed to the accountant and the accounting staff. b. Develop budget notes which include: i. identification of reasons for previous profits and losses - Profits prior year are $851,188 in 2009 and $1,019,499 in 2010. - Reasons are that there is an increasing customer base and the business is built on superior after sales service. ii. your comment on the effectiveness of existing financial management approaches - Inadequate analysis of revenue/expense to produce an informed estimate. - Lack of computer software to produce timely and detailed reports. - Too much reliance on qualitative input rather than balancing it with quantitative data and analysis. iii. all assumptions and basis that have been made or used to form budgets - Sales same sales growth 2011/12 as 2010/11. - Inflation 4% per annum. - Reduce the expected gross profit rate by 1%. iv. any relevant notes regarding implementation and monitoring of budget expenditure. - Sales breakup – bathroom fittings 30%, bedroom fittings 25%, mirrors 15% and decorative items 10%, lighting fixtures 20%. TAD20A BSBFIM601 Version: 2.1 Implemented: November 2018 To be reviewed: November 2019 Responsibility: Head trainer © The Wales Institute Pty Ltd Page 5 of 19
Part B ScenarioThe CEO of Houzit Pty Ltd, Jim Schnieder explained that he prefers to discuss the budgets with all senior managers prior to their distribution in order to ensure a corporate view of the strategic plans. He then meets with each group separately to answer questions and concerns about their particular area. Eventually the budgets will be printed in hard copy and bound as well distributed as an electronic spreadsheet.Upon completion of the budgets you meet with Jim to provide an overview of the information contained within the budgets, the budget notes and recommendations regarding the internal controls to prepare him for the meetings with the senior managers. To clarify his understanding of the information, Jim asks you a series of questions (listed below, which you will complete in written).Prompt questions
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- Head Trainer, Wales Institute Pty Ltd