Get Instant Help From 5000+ Experts For
question

Writing: Get your essay and assignment written from scratch by PhD expert

Rewriting: Paraphrase or rewrite your friend's essay with similar meaning at reduced cost

Editing:Proofread your work by experts and improve grade at Lowest cost

And Improve Your Grades
myassignmenthelp.com
loader
Phone no. Missing!

Enter phone no. to receive critical updates and urgent messages !

Attach file

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Guaranteed Higher Grade!
Free Quote
wave
Question:
Describe the Manage Finances within a Budget For Daniells and Waterside Cafe.
 
 
Answer:

The two local food businesses such as café or restaurant that has been chosen for this particular study are Daniells’ Café and Café Waterside. The average cheques are $40 and $55 respectively.

Name of the Restaurant

Daniells' Café

Café Waterside

 

 

 

Average Cheque

$40.00

$55.00

 

DAILY AVERAGE COVERS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Days

Breakfast

Lunch

Dinner

TOTAL COVER

Daniells' Café

Café Waterside

Daniells' Café

Café Waterside

Daniells' Café

Café Waterside

Daniells' Café

Café Waterside

 

 

 

 

 

 

 

 

 

Monday

25

18

40

32

64

75

129

125

Tuesday

27

20

42

34

66

77

135

131

Wednesday

29

22

44

36

68

79

141

137

Thursday

31

24

46

38

70

81

147

143

Friday

33

26

48

40

72

83

153

149

Saturday

20

13

52

35

82

93

154

141

Sunday

17

11

56

30

92

103

165

144

 

 

 

 

 

 

 

 

 

TOTAL

182

134

328

245

514

591

1024

970

 

DAILY ESTIMATED SALES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Days

Food Sales

Non-Alcoholic Beverage Sales

Alcoholic Beverage Sales

TOTAL SALES

Daniells' Café

Café Waterside

Daniells' Café

Café Waterside

Daniells' Café

Café Waterside

Daniells' Café

Café Waterside

 

 

 

 

 

 

 

 

 

Monday

$2,580

$3,438

$1,032

$1,375

$1,548

$2,063

$5,160

$6,875

Tuesday

$2,700

$3,603

$1,080

$1,441

$1,620

$2,162

$5,400

$7,205

Wednesday

$2,820

$3,768

$1,128

$1,507

$1,692

$2,261

$5,640

$7,535

Thursday

$2,940

$3,933

$1,176

$1,573

$1,764

$2,360

$5,880

$7,865

Friday

$3,060

$4,098

$1,224

$1,639

$1,836

$2,459

$6,120

$8,195

Saturday

$3,080

$3,878

$1,232

$1,551

$1,848

$2,327

$6,160

$7,755

Sunday

$3,300

$3,960

$1,320

$1,584

$1,980

$2,376

$6,600

$7,920

 

 

 

 

 

 

 

 

 

TOTAL

$20,480

$26,675

$8,192

$10,670

$12,288

$16,005

$40,960

$53,350

 

BUDGETED MONTHLY INCOME STATEMENT:

 

 

 

 

 

 

Daniell's Café

Café Waterside

Particulars

Amount

Amount

Amount

Amount

 

 

 

 

 

Revenue:

 

 

 

 

Food

$81,920

 

$106,700

 

Non-Alcoholic Beverage

$32,768

 

$42,680

 

Alcoholic Beverage

$49,152

$163,840

$64,020

$213,400

Total Revenue

 

$163,840

 

$213,400

Cost of Goods Sold

 

-$40,960

 

-$53,350

Gross Profit

 

$122,880

 

$160,050

 

 

 

 

 

Operating Expenses:

 

 

 

 

Payroll Expenses

-$24,576

 

-$32,010

 

Power & Fuel

-$28,672

 

-$37,345

 

Cleaning Charges

-$8,192

 

-$10,670

 

Electricity

-$2,458

 

-$3,201

 

Rent

-$1,500

 

-$1,500

 

General Expenses

-$12,288

 

-$16,005

 

Total Operating Expenses

 

-$77,686

 

-$100,731

 

 

 

 

 

Net Profit before Tax

 

$45,194

 

$59,319

Income Tax Expenses

 

-$13,558

 

-$17,796

 

 

 

 

 

Net Profit for the month

 

$31,636

 

$41,523

 

The issue presented in the question is that the data in regards to the income sources that have been provided in the budgeted statements in Part A could be derived from the financial statements or the accounting records that have been maintained for the purpose of carrying out the financial proceedings. The books that are daily maintained by the accountant of the business entity might also help in the process of collection of relevant data (Greef caes et al., 2017).

The documents needed for gaining data in case of the following financial components are as follows:

  • Rent – payment documents or slips
  • Wages and salaries – expense registers (salary or wage bills)
  • Licenses – license papers
  • Maintenance and repairs – expense register
  • Asset purchases: Cooking equipment, furniture, motor vehicles – asset register
  • Food purchases – purchase invoice
  • Beverage purchases – purchase invoice
  • Insurance Accounting taxes – tax invoice or bill

BALANCE SHEET:

 

 

 

 

 

 

 

ASSETS

$

LIABILITIES

$

 

 

 

 

Inventory: Food

25,000

Bank Loan

15,500

Inventory: Beverage

23,800

GST Payable

895

Furniture & Fittings

12,000

Trade Creditors

9,500

Trade Debtors

18,300

 

 

Bank Account

7,500

 

 

Computers

8,000

 

 

Petty Cash

1,200

 

 

Building & Improvements

9,500

Total Liabilities

25,895

 

 

Proprietorship/Owner's Equity

79,405

 

 

 

 

TOTAL

105,300

TOTAL

105,300

 

REVENUE

EXPENSES

 

 

Fees received

Cash Purchases

Credit sales

Bought Goods for Resale

Commission received

Bank fees & charges

Cash Sales

Salaries/Wages

 

Interest paid

 

Telephone/Mobile & Internet

 

Supplies bought

 

Donations made

 

The four examples of source documents include:

  • Invoice bills
  • Registration deeds
  • Delivery dockets
  • Quotes

The trial balance ensures that the credit balance equals the debit balance

The Cash flow equation is Operating cash flow = Net Cash or Operating income before depreciation minus taxes that have been adjusted in accordance to changes in working capital

A budget refers to the planned estimates that have been undertaken by the management of an organization for the purpose of strategizing and controlling the revenue and the expenditure for a specific time period in the future. A budget helps in providing a projected view into the future estimates of business along with forecasting the profits or losses for business that can be incurred via the estimates (Brown caes et al., 2016).

A zero based budgeting refers to that method of budgeting that leads to the justification of each of the new expenses that have been incurred. The essential process that a zero based budgeting follows is that it starts from a zero base. This means that the total inflow of cash in business minus total outflow of cash must be equal to zero. This will facilitate the allocation of each and every monetary component of business (Brown caes et al., 2016).

A rolling budget refers to that budget which is updated on a continuous basis for the purpose of addition of a new budget with the completion of the current budgeted period. The rolling budget facilitates the extension of the current thus making sure that the business is continuously supported by a financial budget (Brown caes et al., 2016).

The term variance refers to the difference between the two financial components. However, the term budget is a relevant concept in case of the budgets. In case of the budgets, relevance refers to the difference between the budgeted estimates and the actual estimates. A variance can be favorable in nature indicating that the budgeted estimated has been more or less accurate in comparison to the real expense or income that has been incurred by business. However, in case of an unfavorable variance the estimated income does not match with the real scenario. A variance analysis is essentially drawn in order to measure the effectiveness of a prepared budget.

  • Budgets (estimated income) – financial budget
  • Budgets ( estimated of costs) – overhead budget; material budget; labor budget;
  • Budgets (expected financing activities and summary results of the coming period) – revenue budget

This particular question is missing the budgeted rate at which the crate of mangoes were sole therefore, cannot be answered.

Trial Balance

The trial balance ensures that the credit balance equals the debit balance

Profit and Loss Statement

Revenue

$

$

Sales

1,500

 

Less: Cost of goods

500

 

Gross Profit

 

1,000

 

 

 

Less: Operating Expenses

 

 

Electricity

50

 

Telephone

60

 

Advertising

100

 

Total Operating Expenses

210

 

 

 

 

Profit before Tax

 

790

Income Tax

150

 

 

 

 

PROFIT AFTER TAX

 

640

Gross profit is calculated as a 66.67% of revenue.

Profit after Tax is calculated as a 42.67% of revenue.

Operating Expenses is calculated as a 14.00% of revenue.

Income Tax is calculated as a 10.00% of revenue.

Cost of Goods Sold is calculated as a 33.33% of revenue.

Balance Sheet

ASSETS

$

$

 

 

 

Cash

5,000

 

Stock

8,000

 

Vehicle

10,000

 

Equipment

5,000

 

Total Assets

 

28,000

 

 

 

Owners Equity

 

 

Capital

18,000

 

Total Owners Equity

 

18,000

 

 

 

Liabilities

 

 

Loans

10,000

 

Total Liabilities

 

10,000

 

 

 

Liabilities + Owners Equity

 

28,000

Assessment Activity: Accounting Terminology
Cash Receipts

Cash receipts refer to the receipts in the form of cash that the business has received in the form of cash from its debtors or as a payment for other related business transactions.

Cash Sales

Cash sales refer to the sales that have been carried out by business in a particular financial year and the proceedings of which have been received by it in cash.

Petty Cash

Petty cash refers to the cash account that is maintained by the accountant of a particular organization for carrying out the operations in the daily course of business.

Purchase Journal

Purchase journal refers to the journal that reveals the total amount of purchase that is undertaken by business in a particular financial year. In a purchase related journal entry, the purchase account is debited and the cash account is credited.

Payroll Journal

A payroll refers to the wages and salaries that is paid by an organization to its employees. A payroll journal consists of the entries in relation to the payroll of a particular organization.

Current ratio

The current ratio refers to the ratio that shows the liquidity position of an organization by reflecting its ability to pay off its current liabilities with the help of its current assets. The formula for calculating it is Current Assets /  Current Liabilities.

Acid test ratio

The acid test ratio is of the similar nature as of current ratio.  However, the formula for calculating it is (Current Assets – stock) / Current Liabilities.

Accounts receivable as a percentage of total revenue

Accounts receivable as a percentage of total revenue refers to the total portion of sales that has been carried out on the basis of credit.

Accounts receivable turnover ratio

Accounts receivable turnover ratio reveals the total amount of credit sales that have been carried out by business and the effectiveness of it. The formula for calculating such a ratio is (net credit sales) / (average accounts receivables)

Return on Assets

The return on assets refers to the ability of a company to optimally utilize its assets so as to ensure the maximum return from them. The formula is (Net income) / (total assets).

Net return on asset

The net return on assets is same as return on assets. However, the formula is (net income) / (fixed assets + working capital)

Return on stockholder’s equity

The return o stockholder’s equity refers to the return that is obtained by business from the shareholders equity. It is calculated by (net income) / shareholder’s equity

Inventory turnover

The inventory turnover refers to the ability of the business to obtain returns from its inventory. It is calculated by (cost of goods sold)/ (average inventory)

Working Capital turnover

The working capital turnover ratio refers to the ability of the business to obtain returns from its working capital. It is calculated by (net sales /  working capital)

Gross profit margin

The gross profit margin refers to the gross profit that is left after deducting the cost of goods sold from the total revenue. It is calculated by (gross profit) / revenue.

Net profit margin

The net profit margin ratio refers to the net profit that is left after deducting the operating and all other expenses from the gross profit.

Asset turnover ratio

The asset turnover ratio refers to the ability of a business entity to obtain the maximum returns from its assets. It is calculated by (net sales) / (total assets).

Contribution margin ratio

It is the difference between the company sales and variable expenses that is expressed as a percentage.

Margin of safety

It is the difference between the intrinsic value of a stock and its respective market price.

Ownership ratio

The ownership ratio measures the usefulness of the funds contributed by the owners by further measuring the assets financed by those funds.

Breakeven point

The breakeven point refers to the point at which the total sales equals the cost. Post the breakeven point, the company deals in profit.

Sales increase

The sales increase refers to the total increase in sales that ultimately leads to increase in the total revenue incurred by the firm.

Cost justification

The cost justification refers to the justification behind the need of an item of expenditure with the support of proper evidences and documentation.

Sales objectives

The sales objective refers to the primary objectives that are achieved by the firm while carrying out the sales of its manufactured products.

Food cost percentage

The food cost percentage refers to the percentage of the price of a particular food item that accounts for the cost of preparing that particular food item. The food cost percentage can be derived by dividing the total price of the food by the cost and then expressing it as a percentage.

Gross profit on food

The gross profit on food refers to the total revenue derived by the sales of the food items minus cost of preparing the food.

Food stock turn

Food stock turn refers to the effectiveness of the food stock that is utilized by the business entity and is calculated by (total sales) / (total stock).

Beverage cost percentage

The part of the price of the beverages that accounts for their cost is referred to as beverage cost percentage.

Total payroll

Total payroll refers to the wages and salaries and other monetary benefits that are paid by an organization to its staff or employees.

Cost of Goods sold

The cost of goods sold refers to the cost that is incurred by the business entity in manufacturing the sold product or in imparting a service.

Gross profit margin

The gross profit margin refers to the gross profit that is left after deducting the cost of goods sold from the total revenue. It is calculated by (gross profit) / revenue.

Debt to Equity ratio

Debt to Equity ratio refers to the portion of financing that a business entity acquires by borrowing it from outside parties and the portion of financing facilitated by the funds by the equity shareholders. It is calculated by (short term debt + long term debt + other fixed payments) / Shareholder’s equity

Overheads

Overhead costs refer to those costs that are incurred in order to run a business but the overhead costs cannot be attributed to any specific business activity. It is useful in estimating the specific costs.

References and Bibliography

Ampatzoglou, A., Ampatzoglou, A., Chatzigeorgiou, A., & Avgeriou, P. (2015). The financial aspect of managing technical debt: A systematic literature review. Information and Software Technology, 64, 52-73.

Brown, J. L., Fisher, J. G., Peffer, S. A., & Sprinkle, G. B. (2016). The Effect of Budget Framing and Budget-Setting Process on Managerial Reporting. Journal of Management Accounting Research, 29(1), 31-44.

Creel, J., Hubert, P., & Labondance, F. (2015). Financial stability and economic performance. Economic Modelling, 48, 25-40.

Greef, A., Healy, J., Reinhold, D., Gall, M., Swaminathan, M., & Schulz, R. (2017). U.S. Patent No. 9,754,319. Washington, DC: U.S. Patent and Trademark Office.

Loughran, T., & McDonald, B. (2014). Measuring readability in financial disclosures. The Journal of Finance, 69(4), 1643-1671.

Van Dooren, W., Bouckaert, G., & Halligan, J. (2015). Performance management in the public sector. Routledge.

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2020). Managing Finances Within A Budget For Daniells And Waterside Cafe. Retrieved from https://myassignmenthelp.com/free-samples/sitxfin003-manage-finances-within-a-budget-for-daniells-and-waterside-cafe.

"Managing Finances Within A Budget For Daniells And Waterside Cafe." My Assignment Help, 2020, https://myassignmenthelp.com/free-samples/sitxfin003-manage-finances-within-a-budget-for-daniells-and-waterside-cafe.

My Assignment Help (2020) Managing Finances Within A Budget For Daniells And Waterside Cafe [Online]. Available from: https://myassignmenthelp.com/free-samples/sitxfin003-manage-finances-within-a-budget-for-daniells-and-waterside-cafe
[Accessed 12 July 2024].

My Assignment Help. 'Managing Finances Within A Budget For Daniells And Waterside Cafe' (My Assignment Help, 2020) <https://myassignmenthelp.com/free-samples/sitxfin003-manage-finances-within-a-budget-for-daniells-and-waterside-cafe> accessed 12 July 2024.

My Assignment Help. Managing Finances Within A Budget For Daniells And Waterside Cafe [Internet]. My Assignment Help. 2020 [cited 12 July 2024]. Available from: https://myassignmenthelp.com/free-samples/sitxfin003-manage-finances-within-a-budget-for-daniells-and-waterside-cafe.

Get instant help from 5000+ experts for
question

Writing: Get your essay and assignment written from scratch by PhD expert

Rewriting: Paraphrase or rewrite your friend's essay with similar meaning at reduced cost

Editing: Proofread your work by experts and improve grade at Lowest cost

loader
250 words
Phone no. Missing!

Enter phone no. to receive critical updates and urgent messages !

Attach file

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Plagiarism checker
Verify originality of an essay
essay
Generate unique essays in a jiffy
Plagiarism checker
Cite sources with ease
support
Whatsapp
callback
sales
sales chat
Whatsapp
callback
sales chat
close