Use a building plan to determine which materials and tools you need. Build a picnic table with hinges so the table flips over one bench, bringing the two benches next to each other to form a wide seat, and the bottom of the table acts as a seat back.
The exact wood cuts and amount of materials needed depend on the plan you use, but generally you need wooden planks for the table top and benches as well as many shorter pieces of wood for the table frame, legs and arm rests. You need a circular saw and a drop saw to make basic straight cuts and accurate angle cuts. For aesthetic reasons, you may also want a jig saw to cut rounded edges for arm rests.
The picnic table has four hinge points: two where the table legs attach to the table top and two where the table supports attach to one of the picnic benches. In these spots, make rotating hinges with thick bolts that connect the two pieces of wood perpendicular to the direction of rotation. For fixed attachment points, use wood screws. Make sturdy table and bench legs in a triangular shape, and use a cross piece to brace them.