ASSIGNMENT INSTRUCTIONS

1. How to Approach This Assignment

 Please read all instructions before starting the assignment

 To complete the assignment you need access to a computer, a word processing package
and a spreadsheet package. The recommended spreadsheet software is Microsoft Excel
and the template provided is an Excel one.
 You should first study the relevant material in the text and make sure you understand
the concepts covered.

2. An Excel Tutorial

If you are unfamiliar with Excel or spreadsheets in general, there are excellent free interactive
tutorials on the web. For example, the one provided by B. W. James on the University of
South Dakota website: http://www.usd.edu/trio/tut/excel This tutorial explains what a
spreadsheet is and how it is used. Most of the tutorial is relevant, but do not worry about the
specific functions (formulas) except for SUM.

3. Completing the Assignment

Entering Data

You will answer Part A of the assignment on the template contained in the Excel file. If the following
instructions are not followed you may lose marks.

The data sheet is where you will input the given data. The other sheets contain the output of financial
and numeric data. You may enter figures and formulae in the data sheet but in the other sheets you
should use only formulae as this creates a workbook which is truly flexible. (Refer to page 4 Part A:
Workbook Spreadsheet Completion)

It is important to realise that the program operates on named cells contained within the template. The
names of these cells must not be altered or relocated. To avoid this DO NOT use the cut and paste
function, or drag and drop cells from one location to another. It is also not advisable to delete rows or
columns. Copying, pasting, and deleting cell contents is acceptable.

Management Accounting Assignment 1

Backups

Make certain you keep backups of your work.

Once you have started working on the spreadsheet you should make backups.

It pays to rename different versions of your work. A simple way to do this is to use the
Save as file instruction and add a number or letter to the end of the file name. (This allows
you to go back to an earlier version.)

4. Submission of the Assignment

Use the following naming convention for the files that you are submitting:
Students’ group leader name, then “section”. For example, if your name is Ali and section is
A, your Excel file would be Ali A.xls and your Word file would be Ali A.doc (file extensions
may differ, depending on which software versions you are using).

Please upload the assignment in the google classroom and submit the excel file and report (in
word form) to me on the following email address as well and do include the names of group
members in the mail:
Shah.wali@imsciences.edu.pk

Please note that this assignment is due by Sunday July 03, 2022.
Total Marks 20. (This assignment contributes 20% to your final grade)

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 ASSIGNMENT QUESTION

Question: Jhon’s business known as ‘Baby Factory’.

Background
A few years ago Jhon established a wholesale business of selling baby bouncers. Jhon
understands his market but has not bothered much with budgeting. He asks your advice and
gives you a copy of the Balance Sheet as at 30 September 2018 (refer below).

Sales
Jhon estimates sales for the last quarter of the year as follows: October 800 bouncers,
November 880 and December 720, all at a selling price of $240 each. Sales will be all on
credit with customers paying the month after they buy.

Purchases and Inventories

The business obtains the bouncers from a manufacturer in Darwin whose price of $180
includes delivery to the Baby Factory warehouse in Adelaide. Payment is due 20th of the
month after purchase. From the beginning of November Jhon would like to start each month
with 100 bouncers in stock, just in case there is a delay on deliveries.

Non-Current Assets

On 1 October 2018 Jhon intends to take delivery of a van for the business which will cost
$50,000. Jhon intends to deposit from his personal funds $30,000 into the business bank
account to help with the van purchase for which payment will be due on the 20th of October.
The business uses the straight line method of depreciation for all its assets.
The computer equipment which appears on the 30 September 2018 Balance Sheet has a
useful life of three years and an estimated residual value of zero.
It is estimated that the van will have a useful life of five years at the end of which it will be
sold for $20,000.

Other
Advertising in the local paper costs the business $400 per month, payable in the month it is
incurred.
General costs such as telephone, utilities, stationery work out at $1,000 a month and are paid
for on the 20th of month following purchase.
Jhon takes $8,000 a month out of the business bank account for personal use.
An annual insurance premium of $4,800 has been agreed with the brokers for the year
October to 30 September 2019. The premium is payable in full on 1 October 2018.
The business rents a warehouse at a cost of $3,200 a month which is payable on the first day
of each month.
Vehicle expenses for the new van are estimated at $1,400 per month, payable in the month
incurred.

Management Accounting Assignment 3

Opening Balance Sheet

Baby Factory
Balance Sheet
As at 30 September 2018

Current Assets
Cash 6,000

Account Receivable 72,000

Inventories 9,000

87,000
Non Current Assets

Computer Equipment 12,000

Acc: depreciation Comp Equip 4,000
8,000

Total Assets 95,000

Current Liabilities

Account Payable 54,000

General Cost Creditors * 900

54,900

Total Liabilities 54,900

Owners Equity 40,100

Total Liabilities and Owners Equity 95,000

* For General costs

Part A: Workbook Spreadsheet Completion

Marks will be awarded for the functionality and flexibility of your spreadsheet. The aim of
this assignment is to produce a workbook of spreadsheets in which any changes in financial
and numeric data in the Data Sheet will result in an update of the whole workbook. Therefore,
you must link the output with the Data Sheet and you should not enter numbers directly into
the output areas on the other worksheets. All entries should be made in blue shaded cells,
though not all blue shaded cells require entries, however, some may even require adding
names. Round all workings to the nearest dollar amount.

Required:

(i) On the Data Input Sheet enter the given data which has not yet been entered.

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 (ii) On the Sales & Other Budgets sheet in the templates provided complete the Sales,
COGS and Cash Collection Budget, the Receivables Budget, the Inventories
Budget, the Payables Budget and the Depreciation Budget for the quarter 1 October
to 31December 2018.

(iii) On the Cash Flow Sheet, complete the Projected Cash Flow Statement for the each
of the three months October, November and December and the totals for the
quarter 1 October to 31 December 2018.

(iv) On the Income Statement Sheet, complete the Projected Income Statement for the
quarter ended 31 December 2018. A month by month Income Statement is not
required.
(v) On the Balance Sheet Sheet, complete the Projected Balance Sheet as at the end of
the quarter ended 31 December 2018. (You will have to enter the assets, liabilities
and owner’s equity names as well)

Part B: Report to Baby Factory

Required:

With reference to the budget financial reports generated in Part A, write a business report to
Baby Factory (refer to the attached guidelines for report writing).

(i) Explain to Jhon what the Projected Cash Flow Statement and Income Statement
reveal about the business. Offer any advice you see as relevant.
(ii) Explain to Jhon the impact on the projected quarterly profit and the closing cash
balance of a) changing the selling price to $260 and b) moving to more expensive
premises costing $5,400 a month in rent. Answer a) and b) separately.
(iii) Choosing either (ii) a) or (ii) b), discuss the change and the factors which should be
taken into account before making the change. The factors could include both
financial and non-financial items.

Complete Part B in a Word document file. (No template given.)

Answers should be well reasoned, comprehensive and include data from the financial reports.
To answer your assignment you may need to look beyond the set readings and text.

For structuring the report to Jhon, refer to page 7 of this assignment.

Your answer to Part B should range from 500 to 1000 words.

Please acknowledge sources used outside of the text book and course materials. References
are not included in the word count.

Management Accounting Assignment 5

Guidelines for Writing Reports

For some of the questions of the Assignment, you are required to submit a short report to the
owner of the business. There are many options with regard to layout for such reports, and
some guidelines are outlined below. However, any reasonable layout will be suitable.
Remember that these reports are necessarily short, and thus need to be focussed, concise and
summarised. Bullet points in relevant areas will be acceptable.

The following extract may be of assistance:

‘Writing reports gives practice applying theoretical concepts to a real-life

context. If you are planning a career in an organisational context, it is likely
that at various stages in your career writing reports will be required. Learning
to write a report, therefore, is not just a method by which your lecturers
evaluate you; it is also part of professional development, and a way of learning
business principles, integrating them into your critical mind.

Organisations call for reports when they have difficult decisions to make. They
therefore require the author to exhibit investigative skills, judgment and the
ability to write persuasively. Writing persuasively for a report means that you
need to appear to be objective. You are required to produce proof or evidence
to support your ideas. It is not enough to recommend a course of action; you
need to explain why this is the best solution, what its short and long term
results will be, and explain the reasons.

Remember above all that a report is a practical project. A report assumes that
someone has a problem and they want guidance on how to deal with the
problem. If you are writing for a particular person, keep that person in mind.
Focus on their needs and recommend a solution that can be implemented. Be
specific: avoid generalisations…’

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The following is an example of a basic report structure:

Title Page
Introduction
1. identify subject, context and specific problem.
2. define specific objectives
Discussion/Analysis
1. sub-divide into logical units
2. use headings and arrange into logical sequence
3. present evidence to support conclusions
4. focus on objectives (the specific problem)
Conclusions/Recommendations
1. relate to objectives
2. follow from facts
References

Note: you may use some or all of these features in Part B of your assignment.

Please also note that every report needs a title page, but only long reports need a contents
page.

Management Accounting Assignment 7