Appendix

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Appendix A
1. Sales are expected to grow to 18,000,000 in the next financial year.
2. Expenses will be the same as the previous year. Though, some of the expenses will increase. Some
expenses will increase by the direct amount, and other expenses will be accounted for with the inflation
rate. Information on expenses that will have increased by direct amount is given in meeting notes.
3. The inflation rate for expenses is given below. The expenses that will be impacted by inflation are as
follow: (further information on expenses is given in meeting notes with an accountant)
a. Cleaning, repair and maintenance expenses (3%)
b. Electricity (3%)
c. Wages and salaries (10%)
d. Fringe benefits tax (5%)
e. Website and marketing expense (10%)
4. Profits will be built by making a secure client base. The total cost to do so will be $12,000 to be included
in advertising expenses.
5. To reduce the principle of loan amount by $80,000 from the current year profits generated.
6. Manage debtors more efficiently and reduce the amount in trade debtor account by $200,000.

 

Appendix B
Income statements for the year 2019/20 and 2020/21
Career Training Pty LTD.
For 12 months ended
Profit & Loss Actuals 2019/20 2020/21
Revenue
Sales 12,600,000 14,260,000
– Cost of goods sold 5,200,000 6,100,000
Gross Profit 7,400,000 8,160,000
Expenses
– Interest Expense 90,000 88,000
– Depreciation expenses 160,000 160,000
– Insurance expenses 24,000 24,600
–Supplies – 4,300
– Advertising 246,000 260,000
– Cleaning, Repairs & Maintenance 82,000 84,000
– Rent 2,500,000 2,750,000
– Website marketing expenses 14,000 16,000
– Electricity Expense 30,000 32,000
– Fringe Benefits Tax 34,000 38,000
– Wages & Salaries 2,200,000 2,400,000
– Superannuation 209,000 228,000
– Workers’ Compensation 44,000 48,000
Total Expenses 5,633,000 6,132,900
Net Profit (Before Tax) 1,767,000 2,027,100
Income Tax 530,100 608,130
Net Profit 1,236,900 1,418,970

 

Appendix C
Statement of financial position
Career Training Pty LTD.
Statement of Financial Position
As at 30 June 2019/20 2020/21
Assets
Current Assets
– Cash on Hand 90,000 98,000
– Cheque Account 180,000 220,000
– Deposits Paid 1,200,000 1,200,000
– Trade Debtors 1,115,000 1,230,000
– Merchandise Inventory 1,600,000 1,720,000
Total Current Assets 4,185,000 4,468,000
Fixed Assets
– Cost of motor vehicle 600,000 600,000
– Accumulated Dep (120,000) (120,000)
– Cost of Furniture & Fixtures 2,400,000 2,600,000
– Furniture & Fixtures Accumulated Dep (720,000) (780,000)
– Cost of Office Equip 500,000 500,000
– Office Equip Accumulated Dep (100,000) (120,000)
Total Fixed Assets 2,560,000 2,680,000
Total Assets 6,745,000 7,148,000
Liabilities
Current Liabilities
– Credit card 32,000 36,000
– Trade Creditors 700,000 730,000
– GST Collected 1,260,000 1,426,000
– GST Paid (840,000) (890,000)
– Superannuation Payable 209,000 228,000
– income Tax Payable 530,100 608,130
Total Current Liabilities 1,891,100 2,138,130
Long-Term Liabilities –
– Bank Loans 1,800,000 1,600,000
Total Liabilities 3,691,100 3,738,130
Equity
– Owner/Shareholder’s Equity 700,000 700,000
– Retained Earnings 1,000,000 1,200,000
– Dividends Paid (397,100) (497,230)
– Current Year Earnings 1,767,000 2,027,100
Total Equity 3,053,900 3,409,870

 

Appendix D
Notes provided by the CEO:
Notes from meeting with an accountant:
• The sales target for the year 2021/22 set in the business plan is 18,000,000. The proportion expected
from the analysis of the previous study for each quarter is as follow:

Quarter 1: 22%
Quarter 2: 30%
Quarter 3: 21%
Quarter 4: 27%

• The cost of goods sold will be in the same proportion as 2020/21.
• Rent expense will increase by 10% this year.
• Supplies will be the same as the previous year.
• Interest expense for the current year will decrease by the amount of $6,000.
• A new expense is to be included in the new budget that will be under the name of cleaning and
maintenance labour charges. 60% of the amount from cleaning and maintenance expenses will be
included in this expense. Only 40% will be accounted for in cleaning and maintenance expenses.
• Depreciation will be the same as the previous year.
• The expected increase in expenses: (inflation rate given in business plan summary)
o Cleaning, repair and maintenance expenses
o Electricity
o Wages and salaries
o Fringe benefit tax
o Website and marketing expense
• The following expenses will be paid in equal amounts for each quarter:
o Rent expense
o Interest expense
o Insurance expense
o Website marketing expense
o Depreciation expense
o Advertising expense
• Supplies expense will be paid in the third quarter.
• Other expenses will be distributed based on the proportion of sales made in each quarter.
• Statutory requirements
o Superannuation: 9.5%
o Company tax: 30%.
o Workers compensation: 2%
• Based on the analysis of historical data, it is expected that the debtor’s balance at the end of each
quarter is expected to be 15% of the sales made. Furthermore, it is expected that 1% of the debtor
balance will be overdue for 90 days, 4% overdue for 60 days and 10% for 30 days.
For GST cash flow budget:
• Statutory requirements: 10% of recorded sales. No capital purchase is recorded for this year.
However, the expenses where the GST will be paid include.
o Insurance expense
o Store supplies
o Advertising expense
o Cleaning, Repairs & Maintenance
o Electricity expense
o Website marketing expense
• GST cash flow is to be maintained to maintain audit trial. This will ensure that there are discrepancies
between agreed and actual allocations for cash flow analysis for GST are identified.