I need help with my assignment. I have done the answer already but I need tutor to check it and review before I submit it Also, please help me elaborate some answers. I need some explanations to extend my answers

Running Head: Prepare Budgets and Monitor and Review Budget Student Name: ka ho cheung 07243 Running Head: Prepare Budgets and Monitor and Review Budget Assessment Task 1 Prepare Budgets Introduction The budget is involved planning for the company future income and expenditure, I will make the budget plan of the company also recommend application regarding financial managers. The company is Houzit Pty Ltd, this company basically dealing as retailer for home wares. The company is having more than 15 stores located Brisbane area with more than 152 employees. The company also registered with Australian Securities and Investments Commission. Profit Budget Revenue Sales Less-Cost of goods sold Gross profit Gross profit % Expenses Less- Accounting Fees Less- Interest Expense Less- Bank charge Less- Depreciation Less- Insurance Less- Store supplies Less- Advertising Less- Cleaning Less- Repairs & Maintenance Less- Rent Less-Telephone Less-Electricity Expense Less-Luxury Car Tax Less-Fringe Benefit Tax Less-Superannuation Less-Wages & salaries Less-Payroll Tax Less-Workers' Compensation Total Expenses Net profit (Before Tax) Income Tax Net Profit Profit Budget 2011/12 Qtr1 20% 16971237 3394247 9673605 1934721 7297632 1459526 43% Qtr 2 24% 4073097 2321665 1751526 43% Qtr 3 26% 4412522 2515137 1897384 43% Qtr 4 30% 5091371 2902081 218290 43% 10000 84508 1600 170000 13390 3749 350000 16282 64272 2640508 14997 26780 12000 28000 187020 2078000 98705 41560 5841371 1456261 436878 1019383 2500 21127 400 42500 3348 900 50000 3908 16068 660127 3599 6427 7000 44885 498720 23689 9974 1395172 356260 106878 249382 2500 21127 400 42500 3348 975 50000 4233 16068 660127 3899 6963 7000 48625 540280 25663 10806 1444514 452871 135861 317009 2500 21127 400 42500 3348 1125 50000 4885 16068 660127 4499 8034 7000 56106 623400 29612 12468 1543197 646092 193828 452265 2500 21127 400 42500 3348 750 200000 3256 16068 660127 2997 5356 12000 7000 37404 415600 19741 8312 1458488 1038 311 727 Running Head: Prepare Budgets and Monitor and Review Budget Total Sales Bathroom fitting Bedroom fitting Mirrors Decorative items Lighting Fixtures 30% 25% 15% 10% 20% Sales Budget 2010/11 Qtr1 Total Budget 20% 16971237 3394247 5091371 1018274 4242371 842562 2545685 509137 1697124 339425 3394247 678849 Qtr2 24% 4073097 1221929 1018274 610965 407310 814619 Qtr3 26% 4412522 1323756 1103130 661878 441252 882504 Qtr4 30% 50913721 1527411 1272843 763706 509137 1018274 GST Collected Less GST Paid GST Payable GST Cash flow analysis 2010/11 Qtr1 Qtr2 1697124 339425 407310 12281358 282913 306854 415765 56512 100456 Qtr3 441252 326325 114927 Qtr4 509137 365267 143870 Sales % Debtors Sales Total Debtors Current 30 Days 60 Days 90 Days Aged Debtors budget Total Qtr1 Qtr2 16971237 3394247 4073097 20% 20% 100% 678849 814619 84% 570234 684280 10% 67885 81462 5% 33942 40731 1% 6788 8146 Qtr3 4412522 20% 882504 741304 88250 44125 8825 Qtr4 5091371 20% 1018274 855350 101827 50914 10183 Analysis of BudgetReason for the Profit and Loss in Budget The profit in previous year was $851,188 in 2008 and profit in current year 2009 is $1,019,499. Good financial management approach of the company. Because of increasing in customer base of the company and business is also providing good after sales services. Lack of computer software based report for processing of timely and detailed report. Assumption from the budget Breakup of sales - Decorative items 10%, Lighting fixtures 20%, Bathroom fittings 30%, Running Head: Prepare Budgets and Monitor and Review Budget Mirrors 15%, Bedroom fittings 25%. In year 2009-2010 there is Increase in advertising budget by $70,000; $200,000 is planned for the first quarter. In year 2009-2010 there is Increase wages and salaries by $172,500. The fees of accounting is fixed of $10,000 Charger of interest $84,508. Charger of bank same as 2009. New expenditure like store supplies in year 2008-2009 was $3,500 and cleaning expense in year 2009-2010 is $3,605. The various requirements of statutory for tax compliances are following: 9% of wages and salaries is to be calculated as superannuation for every quarter For each quarter 4.75% is payroll tax of wages and salaries. The compensation of Worker is 2% of salaries and wages for every quarter Company tax is 30% of the net profit before tax. 1. Liabilities of Houzit areas follows Goods and services tax liability ($1,571,411 collected - 987,626 paid = $583,785) Income tax $436, 928 Withholding payable $44,872. Under the corporation act the Current compliance requirement and liabilities for the 2. company. An annual return with information about the company must be submitted to the ASIC. 3. Company must keep all financial records for 7 years. Company to abide by the rules set by ASIC for the internal management of the company. All large company must submitted their financial statement. Most important software's for the company For statutory needs of Houzit especially in when need to assist in generation of monthly BAS 4. statements. For the employees software requirement for login access, multi-user, and secure data. Houzit need software for security. Principle of accounting in developing budget a. Matching principle Running Head: Prepare Budgets and Monitor and Review Budget The matching principle is applied in preparing a budget by making sure that the revenues for the period are matched with the expenses incurred in earning that revenue for the period. b. Account group Account groups are used in preparing a budget by separating the revenue and expense accounts into the profit budgets and the asset, liability and equity accounts. c. Time period Time periods are applied in preparing a budget by applying the accounting assumption that a going concern can be divided into shorter time periods of weeks, months, quarters and years for the purpose of budgeting and reporting. 5. Implication when preparing the budget Financial probity requires the preparer of budgets to do so with honesty, integrity and in an ethical way. Auditors must be truthful in their assessments, responses and the documentation of 6. 7. 8. financial transactions. List of critical initiatives and dates that will require Reduction on the principle of the loan by a payment of $100,000 on the 31 December 2011 In year 2010-2011 increase the advertising budget by $ 70,000. In year 2010-2011 increase wages and salaries' by $ 172,500 Complete a debtor analysis to reduce cash tied up in outstanding debts. Reduction is rate of gross profit by 1%. My recommendation for inclusion in the budget Water bill Waste removal Staff amenities Postage and printing The Houzit list related to new internal controls and risk management. Risk management Risk New information system Description and response Question to ask at the time If company change in of assessing this risk Modification to software technology it will increase appropriately authorized, the risk. Staff should be appropriate tested and documented. Running Head: Prepare Budgets and Monitor and Review Budget New procurements for trained. New accounting principles Accounting staff maintain accounting can impact on the entity's their technical expertise. Personal Training financial reports Lack of understanding of Employee must complete internal controls required training which also includes code of conduct. Internal control The discount recorded by the company Reconcile of the cash related registers Timesheets and supplier invoices should be signed Currency of asset register need to maintain by policy. Audit trails Paperwork - Paperwork with complete details must be provided. Secondary control - Receipt of cash will have a secondary monitoring system and proper authorization of receipts. Assessment Task 2 Running Head: Prepare Budgets and Monitor and Review Budget Monitor and review budget Running Head: Prepare Budgets and Monitor and Review Budget Debtor ageing Ratio Trade Debtor Sales Debtor Days 2009-2010 8,50,000 1,45,50,100 21 2010-2011 9,75,000 1,57,14,108 22 2011-2012 11,18,325 1,69,71,237 24 Cash flow analysis A cash flow budget helps to identify any shortcoming or excesses in cash forecast able future. Cash flow budget can be set for weekly, monthly or quarterly with the format usually determine by the company. Cash flow analysis-GST GST Collected GST payable GST payable Budget Qtr 1 3,39,425 2,82,913 56,512 Actual Qtr 1 3,37,120 2,79,988 57,132 Issues and reasons According to information provided there are some issue are identified such as Because of economy in trouble because of recession this will impact retail sector badly. The company takes loans from bank and bank increases the interest rates of loan which impact the company badly. The sales seem to be holding up reasonably well as first quarter results are generally impacted. Causes: Company could not get into some national magazines this quarter to promote the store. It helps the company exceed the set budget. Actual to budget After analysis we found that there is lot of difference in company set budget of first quarter Such as 6% difference in sales and 1% in cost of goods sold. Gross profit has a 1% if difference between in actual and budget that is a favorable. The big difference is in the net profit and income tax. Performance As per analysis of expectation of future profits budget is lower in margin as comparative. 4% profit margin is recommended that this margin is carefully considered in future periods. Wages and salaries a little high with 12.2% at company as a 22% of sales. Running Head: Prepare Budgets and Monitor and Review Budget Gross profit is decreased by -1% because of retail economy in recession and bank interest rates increased. Response for the Board of company Company financial viability for profit on target for the first quarter. The variance report identifies the gross profit margin. Recommendations Analysis of cash flows and profitability should be taken over the past period to identify trends in the underlying data of this analysis. Evaluation Company budgets are prepared for all cost centers. Budget monitoring and reporting policy is shortened to monthly basis. References - Allen, Twenty-Five Years of Budgeting Reform- (2004) Anthony J. Matias, Budgeting and Forecasting - (2012)