Prepare cash budgets and create an accounting business report

Bank Statement Information
The bank statement revealed all receipts to the end of month and all payments up to and including 25 September have been processed. On 30 September, bank fees of $15.90 and $34.00 for interest owing on the bank loan for the three months from July to September 2021 were withdrawn from the account as per the bank statement.

The owner reported the following details and projections for the business.
All amounts include GST where applicable.
● Expenses are paid in the month incurred, unless otherwise stated.
● It is anticipated accounts receivable will settle their accounts 50% in the first month following sale, 30% in the second month and the remainder in the third month.
● Now that the business is more established, anticipated credit sales for October will be $25,000. In each of the following months until January 2021, credit sales are expected to increase by 5% on the previous month’s credit sales. After January 2022, credit sales are expected to stabilise at approximately the January value.
● Cash sales are anticipated to be 30% of credit sales from October onwards.
● Net credit purchases for October are expected to be 25% of total sales and will be the same percentage increase in subsequent months.
● Rent Revenue for the sublet office upstairs is received every month and will be the same amount received for the September month.
● All inventory and asset purchases are made on credit and, from October, will be fully paid in the month following purchase. The outstanding accounts payable balances will be fully paid in October.
● The rent lease agreement has the same monthly rent payable for the financial year.
● It is expected, internet will be paid every two months from September with payments being the same amount as the one already paid.
● Delivery expenses are anticipated to be between 5% to 10% of total sales for the month.
● Porter Cameron withdrew $250 in September and intends to withdraw 10% of cash sales in cash each month from October.
● The balance of the loan is to be paid off in equal monthly instalments over the four months from October to January. Interest of $25 will be payable at the end of January.
● Porter Cameron works in the business and is supported by one part-time retail staff who helps out at busy times. She is paid a rate of $32 p/h (disregard all other payroll expenses). Total hours to be worked by staff are estimated to be between 60 and 70 hours per month, except in December and January when 80 to 90 hours are anticipated.
● Insurance is paid annually.
● Bank charges are expected to be between $15 and $20 each month.
● Advertising has been budgeted for at $880 per quarter from October.
● The BAS statement for GST is now to be settled monthly, based on the previous month’s figures. Any required actual account balances from July to September 2021 should be accessed from the MYOB files and printed reports.

Week 4: Business report (including relevant financial documents) submitted
Week 3: Draft business report submitted
Week 2: Initial cash budget and related financial documents completed
Week 1: MYOB files completed

Checkpoints

Authentication strategies
● You will be provided class time for task completion.
● Your teacher will observe you completing work in class.
● You will produce sections of the final response under supervised conditions.
● You must submit a declaration of authenticity.
● You will each produce a unique business report.
● You will provide documentation of your progress at the checkpoint dates provided.

Scaffolding
To complete this task, you must:

Use the MYOB file provided for July and August to enter the transactions for September. Printouts required include:
● Transaction Journal (all) for September 2021
● Trial Balance for September 2021
● Bank Reconciliation Statement for September 2021
● Statement of Profit or Loss for July-September 2021
● Statement of Financial Position as at 30 September 2021

Use spreadsheet software to generate cash budgets from October 2021 – June 2022, including the input areas, statements of estimated receipts from accounts receivable, and statements of GST payable and receivable relating to the business goal. Printouts required include
● Input area
● Statement of Estimated Receipts from Accounts Receivable
● Statement of GST Payable and Receivable
● Initial Cash Budget
● What-if Cash Budget
● Normal and formula print for all Excel worksheets listed above

● Normal and formula print for all Excel worksheets listed above

Use word processing software to create a business report to
● Analyse and interpret financial data and information relating to the business goal.
● Evaluate proposed alternative solutions to achieve the business goal.
● Decide on a solution and propose recommendations to achieve the business goal.