Assessment Task 1: Written questions
Explain the four main taxation and superannuation obligations for a business. Briefly discuss each obligation.
- Australian business number (ABN):- Examine gaining an ABN for their employment. An ABN manages with their expense and employment commitments, as well as utilized as a source of perspective by the Australian Taxation Office (ATO) for their employment.
- Goods and Services Tax (GST) :- GST is a wide put together duty of 10% forced with respect to most merchandise, administrations and other they may need to enroll for GST.
- Business Activity Statement (BAS):- They should hold up movement proclamations with the ATO to address and allowance their tax. They can do this linked through the ATO Job Portal. (Kaye et. Al., 2014)
- Superannuation ensure commitments:- As a business, they can this one allowance arranged least dimension of superannuation for every one of their qualified workers, or profit a charge to the ATO. (Farvacque et. At., 2014)
- Answer the following questions relating to GST in Australia:
- a) When does a business/enterprise and non-profit organizations have to register for GST?
They should enlist for GST when:-
- In the event that they have recently proceeding another business and assume that it should attain the GST revolution limit or extra in the main span of activity.
- In case they are as of now in employment and have achieved their limit – check every month to see whether they have achieved the end , or are apparently going to beat it. (Jurevičienė et. Al., 2012)
- Under 21 days of their turnover beat the significant border.
- When do you need a tax invoice to claim a GST credit?
- They can request GST approvals if the following circumstances apply.
- They aim to use their asset solely or not completely for their employment and the asset does not recite to making profit-taxed materials. (Bhandari & Iyer 2013)
- They arranged or are responsible to provide amount for the product they buyed.
- They have a expense statement from their dealer (for assets more than A$82.50).
- c) What eight details must be identifiable on a tax invoice for sales over $1,000?
The eight details are:-
- That the record should be a tax statement.
- Identity of the retailer.
- Australian Business Number of Retailer (ABN).
- Duration of issuance of the statement. (Farvacque et. At., 2014)
- A brief description of the products sold, including the amount and price (if applicable).
- The GST quantity payable can be set out individually..
- To what extent each invoice sale is a taxable sale (i.e. to what extent each sale contains GST)
- Identity of the consumer or ABN
- d) What accounting method would a small business with an aggregated turnover of less than $2 million use to account their GST?
The bookkeeping strategy utilized for GST when turnover is not exactly $ 2 million can either utilize a money technique or a non-money technique for bookkeeping. (Bhandari & Iyer 2013) In the money strategy for bookkeeping GST is paid when the money is really gotten or paid for the deals and buys made.
- 3. Outline what is defined as a ‘company’ by the Australian Tax Office. Include the taxation requirements for a company in your response.
An Company is a legitimate substance with greater expenses to set up and oversee. While an organization offers some advantage insurance, its administrators might be legitimately at risk for their activities and, now and again, the organization’s obligations
Tax assessment Requirements:-
- Must apply for a Tax File Number (TFN) and use it while presenting an Australian Business Number (ABN) Annual Tax Return whether it is enlisted under the 2001 Corporations Act.
- A organization that isn’t enlisted under corporate law may enlist for an ABN on the off chance that it works in Australia, if its yearly GST turnover is $75,000 or more, it must be enrolled for GST. (Farvacque et. At., 2014)
- Paying their pay charge through installments as you go (PAYG).
- Answer the following questions relating to Pay-as-you-go (PAYG) in Australia:
- a) Explain the difference between PAYG withholding and PAYG Income Tax Installments.
- PAYG Withholding is for the most part charge retained from workers’ compensation or result however it can likewise be retained from providers who have not given their Australian Business number (ABN) to them or from contractile organ with whom they have gone into willful assentions to retain sums from their installments to them. (Kaye et. Al., 2014) Though PAYG ITI are installments in sensor for individual or potentially organization salary income upgrade and are paid by concern proprietors, speculators and sub-declarer who procure a specific measure of pay. Paying PAYG ITI helps them to meet their pay charge commitments by enabling them to rearranging installments in movement quarterly as opposed to making one goon measure of cash installment at year’s last for example this helps with hard income. (Jurevičienė et. Al., 2012)
- b) If you make payments subject to withholding, what are the five things the Australian Tax Office requires a business owner to do?
- They must vault for PAYG retaining charge before them are first required to retain a sum from an installment.
- If they stop to be a business they should drop their PAYG retaining modification.
- Before they go into a bit of work assention or contract, they have to watch that the specialist is lawfully permitted to work in Australia.
- PAYG retaining is diverse to finance charge. Finance charge is a State Department charge.
- Preserve the right records.
- Explain the principle of cash accounting. Include two advantages and two disadvantages of cash accounting in your response.
Money strategy for record articulation is a kind of bookkeeping which centers around hard quick installment inflow and Cash surge. (Bhandari & Iyer 2013) Also, toward the day’s end, money bookkeeping framework encourages us disclosure out how much lucre money an occupation has earned amid a specific timeframe.
Advantages
- If they pick money bookkeeping, it’s the easiest on the grounds that you will just book managing that are identified with money. Other exchange won’t be taken into accommodation. (Stiglitz, 2015).
- Contrasted with that support of money bookkeeping is truly simple. They will record receipts when money is gotten from customer and they will record cost when money is paid to provider.
Disadvantages
- Few organizations pursue money bookkeeping, yet it’s anything but a perceived technique under Companies Act. (McCarthy et. Al., 2012)
- Since money bookkeeping just records money exchanges, the business can be associated with unjustifiable practices by camouflage the tax assessment or swelling the dispensing.
- Explain the principle of accrual accounting. Include two advantages and two disadvantages of cash accounting in your response.
Accumulation bookkeeping alludes to that framework wherein the exchanges are recorded in the books of records as and when they happen, independent of the money got or paid. (Gitman et. Al., 2015)
Advantages:
It is reasonable for organizations that don’t pay or get installments on a prompt premise i. e the ones that do credit deals and buys a great deal.
It gives a genuine and reasonable picture of business exchanges.
Disadvantages:
This is thorough and mind boggling when contrasted with money bookkeeping.
It is hard to keep up and requires effective bookkeeping staff. (Goodhart et. Al., 2013)
- Describe the following terms:
- a) Financial accounting
- b) Management accounting
- c) Accounting standards
- d) Financial accounting system
- Financial bookkeeping alludes to the procedure of accumulation and recording of money related data so as to take proper budgetary choices.
- Management bookkeeping alludes to the way toward gathering, examining, deciphering and conveying monetary, non-money related and financial data to help the best administration in taking viable and auspicious choices. (Farvacque et. At., 2014)
- Accounting benchmarks allude to those rules and system of money related revealing which help a firm to record and present their monetary reports conveniently. These are created by the Australian Accounting Standards Board.
- Financial bookkeeping framework alludes to the different division which monitors money related exchanges of an organization. (McCarthy et. Al., 2012) This records translate and investigate the budgetary exchanges conveniently and helps in the detailing of money related reports
- What type of entity must have their financial report audited?
The expansive associations that fall under Incorporated Associations Act and extensive foundations with a yearly turnover of more than $ 1 million should be reviewed compulsorily. (Kaye et. Al., 2014) Little exclusive firms, firms enlisted under speculations conspire and uncovering elements need not complete their review.
- 9. Explain the purpose of an audit and auditor’s report.
The reason for yearly review and the review report is to give an autonomous supposition that whether the books of records and other fiscal summaries speak to a genuine and reasonable and straightforward position of a business or not.
- Explain the concept of financial probity. In your response, outline the principles that underpin ethics and probity.
Monetary honor for an organization can be characterized as proof of moral conduct that the organization has done and recorded its budgetary exchanges with complete trustworthiness and honesty. (Joshi et. Al., 2013). The standards of fidelity and morals are trustworthiness and respectability, straightforwardness, pertinence, moral conduct, great aim, and esteem creation.
- Provide four examples of what would be considered fraudulent behavior in regard to company finances.
- Incorrect recording of budgetary exchanges.
- Missing costs or livelihoods to demonstrate expanded benefits.
- The exclusion of money related data in fiscal summaries. (Goodhart et. Al., 2013).
- Tempering of budget reports and not displaying a genuine and reasonable money related position.
- Discuss the difference between Generally Accepted Accounting Principles (GAAP) and the International Accounting Standards and why there was a need for harmonization.
GAAP is the proper accounting rules embraced by the associations to exhibit their budgetary position in a way which could be comprehended by the partners. (Goodhart et. Al., 2013). It is a standard based framework. IFRS is International Financial Reporting Standards which are created to give a progressively formally dressed way to deal with every one of the organizations around the globe in the way their budget reports are arranged and displayed.
Assessment Task 2: Planning project
PART A: ANALYSE FINANCES AND PREPARE BUDGETS
Introduction
In this report the benefit and misfortune proclamation, income explanation has been concentrated to locate the frail regions of the business. Likewise, the conceivable explanations behind these shortcomings are distinguished and recommendations are given.
- Conduct research in preparation for your financial performance report.
As indicated by the exploration embraced of the benefit and misfortune articulation of both the years also the income explanations of both the years, the firm has not created a misfortune.. Likewise, the planned costs are not exactly the real misfortunes. (Joshi et. Al., 2013) Likewise, the product that is being utilized by the organization is additionally a standout amongst the best. Despite the fact that, it would require extra charges so as to get refreshed each year.
- Prepare a financial performance report for the Principal Consultants using the template provided by your assessor that includes an:
The reason for this report is to dissect the benefit and misfortune proclamation of the year 2017-2018. This embraces the explanations behind an exhibition of each area of benefit and misfortune articulation. The explanations behind misfortunes are additionally examined in this report.
- The complete net gain/net benefit of the firm is $ 1,335,600 though the net benefit was $ 683,523 for the year 2017-2018. The explanation behind this net benefit is great income from counseling charges, workshops and productions and official pursuit administration. One of the critical explanations behind such a decent benefit sum is a broad advertising approach attempted by the firm and the great nature of workshops did every year. (Goodhart et. Al., 2013).
- The financial conditions and business patterns both are agreeable to the administration consultancy firm. This is the explanation behind a decent measure of benefit in 2017-2018.
- As per the company’s marketable strategy, it intends to accomplish at any rate 10% of benefit every year which has been satisfied in the year 2017-2018.
- As per the income explanation, The firm needs to attempt cost control and cost decrease. as the planned pay is not exactly genuine and the planned .
- Develop budget forecasts for the next financial year
| Sales & Profit Budget 2018-2019 | |
| Particulars | Amount ($) |
| Revenue | |
| Consulting Fees | 1,293,170 |
| E-Book Sales | 10,000 |
| Workshops | 38,000 |
| Publications | 2,000 |
| Conference Collection | 75,000 |
| Executive Search Service | 132,000 |
| Gross Profit/Net Sales | 1,550,70 |
| Less: Expenses | |
| – Accounting Fees | 7,164 |
| – Advertising & Marketing | 5,513 |
| – Computer Software | 4,830 |
| – Insurance | 7,875 |
| – Lease/Loan Payment | 1,575 |
| – Motor Vehicle Expense | 2,625 |
| – Office Cleaning | 5,775 |
| – Office Supplies | 2,205 |
| – Rent & Rates | 45,150 |
| – Repairs & Maintenance | 1,260 |
| – Salaries/wages (including PAYG) | 529,200 |
| – Superannuation | 63,000 |
| – Telephone | 3,570 |
| – Utilities | 2,520 |
| – Travel and Accommodation(For Workshops) | 25,200 |
| – Contract writer (e-book) | 10,500 |
| – E-book | 10,000 |
| – Desktop publishing | 3,000 |
| –Marketing (e-book) | 1,200 |
| –Conference venue and catering | 5,000 |
| –Speaker fees and travel | 10,000 |
| –Marketing (conference only) | 5,000 |
| –Conference bags | 1,000 |
| –Conference casual project officer | 30,000 |
| Total Expenses | 783,162 |
| Net Profit (Before Tax) | 767,008 |
- Circulate report and budgets
This financial plan is submitted to assessor with the goal that it very well may be examined in the gathering.
PART B: MEET WITH MANAGEMENT TEAM
- Prepare for your meeting. Conduct research and develop a report on key financial compliance requirements and liabilities for tax in preparation for your meeting.
Introduction
In this report, key money related necessities of consistence and expense liabilities are examined for the association. These key money related necessities and other assessment commitments incorporate PAYG retaining and PAYG portions, finance charge commitments and so on. This report is grown with the goal that it very well may be talked about in the gathering. (Joshi et. Al., 2013)
At the point when the GST turnover of the firm is not exactly $ 20 million then it is required to pay GST quarterly. To pay the GST a business needs to present a Business Activity Statement to the Australian Tax Office. Additionally, the firm needs to present a GST return. For PAYG retaining and PAYG portions, the business needs to submit Australian Business number and the firm should be enlisted under the Australian Tax Office and to be watched that the laborer is lawfully permitted to work in Australia.
For PAYG salary charge portions a Business Activity Statement should be stopped with ATO before hotel the pay assessment form. The business needs to enroll for finance tax collection and look at with Revenue officer to discover the duty rate and limit that applies to the organization.
The representatives who are paid than $ 450 should be paid superannuation and this must be paid well beyond the wages.
Conclusion
In this report, every one of the commitments that the firm needs to agree to are exhibited. The money related administration of the firm needs to follow the every one of these prerequisites of Australian Tax office with respect to superannuation, compensation, finance, PAYG portions and so on.
- Participate in the budget meeting.
The sums dispensed for the gathering is $ 51000. This incorporates every one of the costs of the setting, packs and so forth. The net benefit for the monetary allowance is $ 767008. Every one of the livelihoods and costs have been considered for this (Kaye et. Al., 2014)
Assessment Task 3: Review project
|
| Budgeted V/S Actual | ||||
| Particulars | Budgeted | Actual | Variance | Favorable/Adverse |
| Revenue | ||||
| Consulting Fees | 1,293,170 | 1,410,720 | 117,550 | Favorable |
| E-Book Sales | 10,000 | – | (10,000) | Adverse |
| Workshops | 38,000 | 45,000 | 7,000 | Favorable |
| Publications | 2,000 | 15,000 | 13,000 | Favorable |
| Conference Collection | 75,000 | – | (75,000) | Adverse |
| Executive Search Service | 132,000 | 144,000 | 12,000 | Favorable |
| Gross Profit/Net Sales | 1,550,170 | 1,614,720 | ||
| Less: Expenses | ||||
| – Accounting Fees | 7,165 | 7,165 | – | |
| – Advertising & Marketing | 5,513 | 5,250 | 263 | Favorable |
| – Computer Software | 4,830 | 4,830 | – | |
| – Insurance | 7,875 | 4,028 | 3,847 | Favorable |
| – Lease/Loan Payment | 1,575 | 1,575 | – | |
| – Motor Vehicle Expense | 2,625 | 5,444 | (2,819) | Adverse |
| – Office Cleaning | 5,775 | 10,800 | (5,025) | Adverse |
| – Office Supplies | 2,207 | 2,207 | – | |
| – Rent & Rates | 45,150 | 45,108 | 42 | Favorable |
| – Repairs & Maintenance | 1,260 | 1,260 | – | |
| – Salaries/wages (including PAYG) | 529,200 | 529,200 | – | |
| – Superannuation | 63,000 | 63,000 | – | |
| – Telephone | 3,569 | 3,569 | – | |
| – Utilities | 2,520 | 4,131 | (1,611) | Adverse |
| – Travel and Accommodation(For Workshops) | 25,200 | 5,654 | 19,546 | Favorable |
| – Contract writer (e-book) | 10,500 | 48,090 | (37,590) | Adverse |
| – E-book | 10,000 | 10,000 | – | |
| – Desktop publishing | 3,000 | 3,000 | – | |
| –Marketing (e-book) | 1,200 | 1,200 | – | |
| –Conference venue and catering | 5,000 | 10,000 | (5,000) | Adverse |
| –Speaker fees and travel | 10,000 | 11,000 | (1,000) | Adverse |
| –Marketing (conference only) | 5,000 | 7,500 | (2,500) | Adverse |
| –Conference bags | 1,000 | 1,200 | (200) | Adverse |
| –Conference casual project officer | 30,000 | 30,000 | – | |
| Total Expenses | 783,164 | 815,211 | ||
| Net Profit (Before Tax) | 767,007 | 799,509 | – |
Conference cost variance analysis:
| Particulars | Budgeted | Actual | Variance | Favorable/Adverse |
| Revenue | ||||
| Conference Collection | 75,000 | – | (75,000) | Adverse |
| Gross Profit/Net Sales | 75,000 | – | ||
| Less: Expenses | ||||
| –Conference venue and catering | 5,000 | 10,000 | (5,000) | Adverse |
| –Speaker fees and travel | 10,000 | 11,000 | (1,000) | Adverse |
| –Marketing (conference only) | 5,000 | 7,500 | (2,500) | Adverse |
| –Conference bags | 1,000 | 1,200 | (200) | Adverse |
| –Conference casual project officer | 30,000 | 30,000 | – | |
| Total Expenses | 51,000 | 59,700 | ||
| Net Profit (Before Tax) | 24,000 | (59,700) | – |
| Proposed Conference Fees | |
| Particulars | Amount |
| Expenses | |
| Conference venue and catering | 11,000 |
| Speaker fees and travel | 12,100 |
| Marketing (conference only) | 8,250 |
| Conference bags | 1,320 |
| Conference casual project officer | 33,000 |
| Total Expenses | 65,670 |
| Add: Mark Up Required | 13,134 |
| Total Collection for Conference Required | 78,804 |
| Number of Attendees | 70 |
| The cost charged per person | 1,126 |
- Based on your analysis of the profit and loss account, develop a short report to submit it to the Principal Consultant (your assessor) that includes your analysis as above.
Introduction
In this report, every one of the changes in real and planned execution are examined. An investigation of these changes is given in this report.
- The changes are unfriendly for speaker charges, advertising, gathering pack, office cleaning, and supplies and so forth. This is because of expanded costs. The changes are certain for digital book deals, workshops, fixes and so on. (Jurevičienė et. Al., 2012)
Conclusion
The positive changes for some, things are a decent sign for the organization yet a few costs have prompted negative differences which should be controlled.
Assessment Task 4: Debtor management project
- Report on debtor management
Introduction
In this report, an investigation is completed by examining the indebted person’s matured report. The account holder’s arrangements and their pertinence for the business are to be investigated. The indebted person’s matured report demonstrates that the organization gathers assets from account holders in any event following 60 days of offer. None of the borrowers pay the organization inside 30 days. Because of this, the liquidity of the organization is enduring. The indebted person’s approach should be restored. Customer 1 pays the extraordinary obligations following 90 days though customer 2 pays following 120 days. This is certifiably not a decent sign as this prompts an absence of fast and fluid assets with the firm. This may likewise influence the working capital of the firm. The sum paid following 120 days is a generous measure of $ 2714, such an enormous time hole for the installment of this obligation can prompt low working capital with the firm. The recommendations that the firm should execute are:
- Incentivize brief installments
- Penalize delay in installment following 90 days
- Set up clear credit strategies (Joshi et. Al., 2013)
- Offer different methods of installment to borrowers
- Outsource accumulation to a bookkeeping organization
Conclusion
The report demonstrates that the installments made by the borrowers are not in the least brief. Truth be told, none of the account holders pay inside 30 days or under 30 days. The organization needs to resuscitate its indebted person’s approach as quickly as time permits. Likewise, the organization needs to actualize the five proposals given in the report. 2. (Jurevičienė et. Al., 2012)
- Submit your report to your CEO (assessor) seeking approval to implement best practice debtor management processes.
Dear Sir,
Subject: To look for endorsement for actualizing the recommendations of the answer to improve account holder’s administration of the organization.
The above report is submitted to look for endorsement so as to actualize the account holder’s arrangement as recorded in the above report. The advantage of this recommendation is that it would improve the indebted person’s administration just as the borrower’s turnover. Brief money accumulation from indebted individuals would prompt an expansion in working capital just as the liquidity of the firm. This would prompt better credit approaches and improve the liquidity of the firm.
Thanking You,
Yours sincerely,
General Manager.
References
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Gitman, L. J., Juchau, R., & Flanagan, J. (2015). Principles of managerial finance. Pearson Higher Education AU.
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