Big Red Bicycle Pty Ltd is a bicycle manufacturer based in Bendigo, Victoria. The company produces bicycles which it sells to retailers in the domestic Australian market.

The senior management structure of the company appears below.

Person	Position
Michelle Yeo	Chief Executive Officer (CEO)
Tom Copeland	Managing Director
John Black	Chief Financial Officer (CFO)
Stuart LA Roux	Operations General Manager
Pat Roberts	Senior Accountant
Sam Gellar	Sales General Manager
Charles Pierce	Production Manager
Holly Burke	HR Manager

According to company strategic plans, the company had aimed to achieve a net profit before tax of $1,000,000. Actual figures showed the company fell short approximately $175,000 of this goal. After successful labour cost cutting measures and improved sales team performance, the company aims to generate a net profit before tax of $1,200,000 from Australian operations alone.This year, in addition to Australian operations, the company is considering manufacturing overseas to take advantage of reduced costs. The company is also considering diversifying its product range to reduce exposure to poor sales of one product.

The board of directors of Big Red Bicycle feels that more cash will be needed to make investments to achieve strategic aims. One significant risk to plans is bad debt and poor cash flow due to large and unsustainable trade debtor balances quarter by quarter.

Note: Strategic plans dictate that Big Red Bicycle must reduce its debt levels and so additional financing to increase cash flow is not an option.

Role

You are Senior Accountant at Big Red Bicycle. As part of your role, you will need to complete the following tasks.

10:24 : Done QiiQiiT_BSBFIM501_Assessme... Statement of Financial Performance Big Red Bicycle ley Ltd Statement of Financial Performance For the year ended 30 June 2012 REVENUE Sales 2.900,000 Les direct wapes and commissions 272,5IHI 100,000 Opening slutt Purchases SI, 20,000 Closing slock som Less cost of goods sold 380,000 2,247,500 Gino Profit EXPENSES 22,000 Travel Legal fees 4. SINO 200 Bank charges Hifice supplies Postage & printing 4,00 SOO Dues & subscriptions 6011 11,200 45,000 Telephone Repairs & maintenance Peyroll tax Markening Expertes 25. Advertising 2018,NIHI Employment Expenses Superuation W &xlaris 45.00 * 500,000 23,000 Staff amenities divy CIS Electricity 38,000 Insurance Rates 100,000 Rent 200,000 War 35,000 Waste removal 60,000 TOTAL EXPENSES 1,422,50 NET PROFIT (BEFORE INTEREST A TAX) N25,00 Income Tax Expense 206,250 NET PROFIT AFTER TAX 618,750 Ageing debtors' budget Big Red Bicycle Pty Ltd TOTAL Qir 1 Qir 2 Qtr 3 Qtr 4 AGED DEBTORS BUDGET 2011/12 Sales % Debtors Sales Total Debtors Current 30 Day's 60 Days 90 Days 2.900,00X 600,000 900,000 800,000 1,000 50% 50% 50% 50% 100% 300,000 450,000 400,000 300,000 65% 195,000 292,500 260,000 195.000 20% 60,000 90.000 80.000 60.000 12% 36,000 54.000 48.000 36.000 3% 9,000 13,500 12,000 9.000 1 QuiquiT_BSBFIM501_428SSI TOUS 10:24 : Done QiiQiiT_BSBFIM501_Assessme... Statement of Financial Performance Big Red Bicycle ley Ltd Statement of Financial Performance For the year ended 30 June 2012 REVENUE Sales 2.900,000 Les direct wapes and commissions 272,5IHI 100,000 Opening slutt Purchases SI, 20,000 Closing slock som Less cost of goods sold 380,000 2,247,500 Gino Profit EXPENSES 22,000 Travel Legal fees 4. SINO 200 Bank charges Hifice supplies Postage & printing 4,00 SOO Dues & subscriptions 6011 11,200 45,000 Telephone Repairs & maintenance Peyroll tax Markening Expertes 25. Advertising 2018,NIHI Employment Expenses Superuation W &xlaris 45.00 * 500,000 23,000 Staff amenities divy CIS Electricity 38,000 Insurance Rates 100,000 Rent 200,000 War 35,000 Waste removal 60,000 TOTAL EXPENSES 1,422,50 NET PROFIT (BEFORE INTEREST A TAX) N25,00 Income Tax Expense 206,250 NET PROFIT AFTER TAX 618,750 Ageing debtors' budget Big Red Bicycle Pty Ltd TOTAL Qir 1 Qir 2 Qtr 3 Qtr 4 AGED DEBTORS BUDGET 2011/12 Sales % Debtors Sales Total Debtors Current 30 Day's 60 Days 90 Days 2.900,00X 600,000 900,000 800,000 1,000 50% 50% 50% 50% 100% 300,000 450,000 400,000 300,000 65% 195,000 292,500 260,000 195.000 20% 60,000 90.000 80.000 60.000 12% 36,000 54.000 48.000 36.000 3% 9,000 13,500 12,000 9.000 1 QuiquiT_BSBFIM501_428SSI TOUS