ACCY5104 Budgets for planning and control Assignment 2

Use Excel to amend the budget for the six months ending 31 December 2025 for Riley Jones who owns and operates “TechTrio Gadgets” considering the information that follows:

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• Interest on Overdrawn Bank Account

If the opening balance of the bank account in any month is less than zero, overdraft interest will be paid based on that amount.

The current overdraft interest rate is 16% per annum. Calculate overdraft payments in the Cash Payments Budget Add overdraft payments to the Income Statement.

Overdrawn bank accounts must be included as a current liability, not a negative current asset.

• Interest on Bank Loan

Each month, interest will be paid based on the opening balance of the loan for that month. The current interest rate for the loan is 12.75% per annum.

Create a loan repayment and interest payment schedule on the Input Page and add the loan interest payments to the Income Statement.

• Depreciation on Property, Plant and Equipment

The equipment in the balance sheet was purchased on the last day of June, so has not yet had any depreciation deducted.

It is expected that $52,000 will be spent on new equipment in August. All equipment is depreciated at 15% per annum on a straight-line basis.

• GST

Turnover has reached the point where TechTrio Gadgets needs to register for GST. For the purposes of the assignment assume that:

The GST rate is 15%.

All items in the original file are exclusive of GST, and that if GST is applicable to them, that GST will be added to them.

TechTrio Gadgets registered for GST effective 1 July 2025.

No GST payments or receipts were recorded, no GST is owed, and no GST refund is due at the end of June 2025.

TechTrio Gadgets will submit GST returns for the two-month periods ending August, October, and December, and that any GST to be paid or GST to be refunded will be paid in the following month.

Add GST rate to the Input Page.

Add GST calculations to the Cash Receipts Budget.

Add GST calculations to the Cash Payments Budget.

Add GST to the Balance Sheet.

(17.5 marks)

On the dashboard the following should be entered, with the input page linking back to these values:

• items listed as ‘Other Cash Payments’ on the Input Page.
• All items listed as ‘Other Cash Receipts’ on the Input Page.

The dashboard should also include the following:

• The closing bank account balance for each of the six (6) months.
• A formula calculating the minimum bank account balance over the (6) month budget period.
• The net profit across each of the six (6) months.
• Input page links to figures on dashboard page

Write a report for Ryan Jones of TechTrio Gadgets including the following:

A discussion of how the changes made to the original budget have changed the cash summary, income statement, and balance sheet.

An analysis, using what-if analysis and the goal-seek function, covering the following questions TechTrio Gadgets would like answered:

• What is the most that TechTrio Gadgets can spend on equipment in August if he wants to avoid a negative cash balance during the (6) six-month budget period?
• What is the effect of changing the August equipment purchases on Net Profit? Your answer should explain why changing the equipment purchase will affect net profit.

Use screenshots of the Goal Seek results and Dashboard to support your answer.

This part of the report should have:

1. An introduction.
2. Discussion of how changes to the budget have affected:

• The Cash Summary,
• The Income Statement,
• The Balance Sheet

(iv)         An overall conclusion.

1. Cash from customers is kept in an unlocked drawer until the end of the week.
2. Only one staff member is responsible for ordering parts, receiving deliveries, and updating inventory.
3. Customer repair jobs are recorded on paper slips, which are sometimes misplaced.
4. Staff use a shared login to access the accounting software. Required:

Write a short report to Mr Jones includes an introduction, a section for each of the four (4) issues raised above.

The report’s introduction should explain the importance of good accounting controls and the

purpose of the report.

For each issue, the section should:

• Describe the problem.
• Explain the risk that the business is exposed to.
• Recommend how Mr Jones should respond to the issue.