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Subject Title

Financial and Commercial Literacy

Subject Code

ACC101A

Assessment Title

Budget / Business Plan Report

Graduate Capabilities

List the graduate capabilities being developed in this assessment

GC1 – Professional Expertise

GC3 – Innovative Problem Solving

GC6 – Independent self-management

GC7 – Technology and information literacy

Learning Outcome/s (found in the Subject Outline)

c. Explain the information needs of management

d. Compare the various components of budgets

Assessment type (group or individual)

Group (groups of up to 3 students)

Weighting %

30%

Word count / Time limit

1,000 words +/- 10%, 5-10 minutes class presentation.

Due day

Week 10 Sunday 11:55pm, presentation during class in Week 11.

Submission type

Turnitin ☒

Format / Layout of Assessment

Report:

ICMS Cover Page

Table of Contents

Written report using the template (saved as a pdf)

Excel spreadsheet (using the template provided).

Reference List

Assessment instructions

Part A.

You are tasked with completing Budgeted Income Statement and a Cash Budget using the excel spreadsheet template and writing a Business Plan for a Tourist Business (detailed below).

Business Scenario.

Sea Dive Adventures operates a boat taking tourists off the coast of South Australia to dive the waters of the Great Australia Bite to see the famed deep-sea turtles. The number of tourists gradually builds up from May and the season ends in July (3-month season). You have been asked by the operators of Sea Dive Adventures to prepare a budget for the 3-month period from May to July.

You have determined from the previous years financial information and discussions with the owner of the business that the following are reasonable projections for the 3 months operations:

Salaries: 3 people are employed to run the boat and help passengers with their diving gear. The total monthly salary is $12,000 ($4,000 per staff member per month).

Expenses: Monthly fixed expenses for the business are expected to be $42,000, including $3,000 depreciation on the boat per month. For each customer, food is provided at a cost of $10.00 and insurance $24.00.

Collections: All customers book their turtle diving tour in advance and pay a nonrefundable $20.00 deposit; The total cost per person is $200.00, and the balance of the $200.00 fee is paid when the tour is taken. 5% of customers who book a tour cannot take it and lose their deposit (no food or insurance cost is incurred for these no-shows). 20% of customers book 2 months in advance of their tour, 50% book a month in advance, and 30% book in the actual month of the tour. No sales are made on account and all tours are paid in full before the customer is allowed on the boat.

Payments: All salaries are paid in the month in which the service is performed; 60% of the monthly fixed expenses, food cost and insurance cost are paid in the same month, and 40% are paid in the next month.

Customers: The boat can take 20 passengers at a time and does 2 tours a day, 7 days a week from 1st May to 31st July. From past experience it is estimated that the following percentage of capacity is booked for each month:

May 70%

June 90%

July 80%

Cash balance: Sea Dive Adventures expects to have an opening cash balance at the beginning of May of $20,000 including deposits paid in advance. The owner of the business takes out drawings of $40,000 for each of the 3 months as her income for the year. At the end of July, Sea Dive Adventures must pay back a loan of $200,000.

Required.

1. Prepare a budgeted income statement for the period May to July (using spreadsheet provided) (assume no expenses owing from previous periods and assume that the business operates using accrual accounting).

2. Prepared a cash budget for the period May to July. (Using the spreadsheet template provided).

3. Based on the information from 1, and 2 above, can Sea Dive Adventures meet its’ loan prepayment of $200,000 at the end of July? Or will the owner need to reduce her drawings during the period? Explain your conclusion.

4. Business Plan.

BUSINESS PLAN.

4. Write a 1000-word business plan using the following structure as a minimum.

i. Executive summary.

• Summarise the contents of the plan

• Who are the investors / owners?

• What is your mission statement (i.e., your goal for your business?)

ii. Business Description.

• What services / products does your business offer?

• What assets / machinery / equipment do you have to run your business?

• How do you market / sell to your customers? (brief only, not a full marketing plan)

• What does your business do and where is it located

iii. Company Organisation.

• What is the legal structure of the business (e.g., incorporated company, sole trader, partnership). Why did you choose this structure?

• Who are the key decision makers?

• What is the management / staffing hierarchy?

• Who has ownership of the company and what percentage?

iv. Financial plan.

• Summarise the detail that is contained in the spreadsheet via the 3 months budgeted income statement and 3 months cash budget.

You are required to upload 2 files.

1. Excel spreadsheet template, containing the budgeted income statement and the cash budget.

2. Business plan (1000 words) written in report form following the structure above as a minimum (pdf).

Your report should be 1,000 words + / - 10% (not including the spreadsheet). You are also required to use in-text referencing and a reference list using APA referencing.

Part B.

All members of the group are to present their business plan to the class in week 11 (5-minute presentation). Presentation skills by all group members and visual aids (your PowerPoint slides) will be assessed. You are required to summarise and present to the class your business plan. You may use PowerPoint and any other visual aids you feel necessary. All members of the group are to participate in the class presentation.

Readings for the assessment

Refer to your resources for Topics 7 – 10.