SOURCES Note payable to Banks Trade Credit (A/c & Note Pay.

) Retained Earnings Cash Accrued Expenses

(1990 1988) 233 0 256 124 348 270 41 58 39 24

($000) 233 B/s 132 B/s 78 N.W. 17 B/s 15 475

USES Inventories A/c Receivable Buy out Interest of Mr. S Reduced L.T. Debt Increase in F.A. A/c

(1990 1988) 418 239 317 171 0 105 50 64 157 126

($000) 179 146 105 B/s 14 21 475

Projected Balance Sheet as on 31-12-1991

AMOUNT ASSETS + + = + = Cash Accounts Receivable Inventory CURRENT ASSETS Property, net (growth with sales) 79 296 551 1026 237 1263

($000)

EXPLANATION 2.2%(% of Sales method) 11% (% of Sales method)

15.3%(% of Sales method) 6.6% (% of Sales method)

+ + + = + = + =

LIABILITIES Notes Payable Bank Account Payable Trade Accrued Expenses (increase with Sales0 Long-Term Debt Current position CURRENT LIABILITIES Long-Term Debt TOTAL LIABILITIES Net Worth TOTAL LIABILITIES + NET WORTH

657 75 52 7 791 43 834 429 1263

BALANCING FIGURE 10days/365 x Purchase

1.45% (% of Sales method)

Given Given (50 7)

348 (last year bal.) + RE 81 from Projected Income Stat.

Projected Income Statement for the year ending on 31-12-1991 ( $000)

= = = = + = PARTICULARS SALES (Projected/Estimated) Cost of Goods Sold Beginning Inventory Purchases Ending Inventory COST OF GOODS SOLD GROSS PROFIT Operating Expenses OPERATING INCOME Purchase Discounts (2% Cash Dis. for remaining 9 months only) Interest NET INCOME BEFORE INCOME TAX Provision for Income Tax(*) AMOUNT EXPLANATION 3600 Given in the Case details 418 Given in Operating Stat. 2723 BALANCING FIGURE 3141 551 Circulatory figure from Projected B/s 2590 72% (% of sales method) 1010 900 25% 110 41 [2% of {2723-660(given in Operating Statement)}] 45 10% on fig. given in example 106 25 @ 15% o first 15000 @ 25% on next 25000 and @ 34% on remainder 81 Circulatory fig taken to
Projected B/s

NET INCOME AFTER TAXES (R.E.)