You are opening a real estate agency in the suburb of Essendon. You are in the process of purchasing an established rent roll. However, you will also be investigating whether the office can support a viable sales division.

1. Outline the process you would undertake to identify whether the area can support a residential sales office.

2. If your investigations revealed that a sales agency would be viable, who else would you now consult to help you in the establishment of your business? Your discussion should include reasons for the consultation and assistance given by these experts.

3. If you were establishing this agency, describe the real estate model you would use. Your discussion should involve a description of the ownership and management structure and how each department would interact within the business model.

4. Given the structure of your business model, what insurance coverage will be required and why?

in relation to accessing and reconciling agency financial records. Your brief should be no longer than a half-page summary for each employee.

6. Your new business will be operating both a general account and a trust account. Outline the process for opening these accounts. Your answer must incorporate the requirements of opening a trust account as per the provisions of your appropriate Act.

7. What reports will the property manager be required to provide you each month and why?

8. What role will you play in determining the accuracy of the reports from the property manager? Your answer should address at least four activities you would regularly undertake to ensure that risk is minimised in all financial management and accounting areas of your business' operations.

9. What reports will the sales manager be required to provide you with each month and why?

10. What role will you play in determining the accuracy of the reports from the property manager? Your answer should address at least four activities you would regularly undertake to ensure that risk is minimised in all financial management and accounting areas of your business' operations.

Your projections have been finalised and you anticipate that the first quarter of trading will reflect the following cash flow forecast. You have also based your borrowings on these projections. In your first three months of operation you believe your income and expenditure will be as follows, and have borrowed from a financial institution based on this cash flow forecast:
Income: $25,000 in sales commission, and $65,000 from the property management department, plus let fees $2,000. Incidental income derived from advertising recoveries, etc. will be $780.
Expenditure: Accountants Fees: $4,800; Advertising and Promotion: $12,000; Bank Fees: $500; IT
Expenses: $15,500; Insurances: $5,000; Interest Paid: $3,000; Licence Fees: $1,300;
Motor Vehicle: $1,500; Printing, Postage & Stationery: $7,000; Rent on Premises: $3,600;
Salaries and Wages: $50,000; Subscriptions: $250; Superannuation: $3,600; Telephone:
$3,000; Sundries: $2,000.

11. You are required to compile the above information into a financial report. You may use the style of format used in your course manual or you may use your own software program.
12. Who else in your business would be permitted to contribute to this report and why?

Answer rating: 100% (QA)

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