Next year, Julijuli Sdn Bhd is planning for a major sales increase of 40%. Sales are...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Next year, Julijuli Sdn Bhd is planning for a major sales increase of 40%. Sales are currently RM30,000,000 and it is forecast that next year's sales will be RM42,000,000. Current assets are expected to increase in direct proportion with increase in sales. Similarly, account payable and accrued expenses are also expected proportionately s per the increase in sales. Fixed assets on the other hand will increase by RM1,000,000; and long term debt expected to remain constant. The net profit margin on sales is 5%. Required: Fill in following table and project the firm's needs for discretionary financing Item Present Level (RM in mill) 30 Percent of Sales Projected Level (RM in mill) Item Sales 42 Net Income Current assets Net fixed assets Total Assets 14 Current asséts Net fixed assets 20 Total Assets Accounts payable Accrued expienses Total Current Liabilities Long-term debt Total Liabilities 2 Accounts payable Accrued expenses Total Current 5. 4. Liabilities Long-term debt Total Liabilities Common stock Retained earnings Common Equity Total L+E 8. 3. 11 20 Common stock Retained earnings Common Equity Projected Sources of Financing Discretionary Financing Needs (DFN) Total financing needs = Total assets Projected RE- Present RE + Projected Nei Incone- Common Dividend Present RE + Projected Net Income- (50% x Projected NI) Next year, Julijuli Sdn Bhd is planning for a major sales increase of 40%. Sales are currently RM30,000,000 and it is forecast that next year's sales will be RM42,000,000. Current assets are expected to increase in direct proportion with increase in sales. Similarly, account payable and accrued expenses are also expected proportionately s per the increase in sales. Fixed assets on the other hand will increase by RM1,000,000; and long term debt expected to remain constant. The net profit margin on sales is 5%. Required: Fill in following table and project the firm's needs for discretionary financing Item Present Level (RM in mill) 30 Percent of Sales Projected Level (RM in mill) Item Sales 42 Net Income Current assets Net fixed assets Total Assets 14 Current asséts Net fixed assets 20 Total Assets Accounts payable Accrued expienses Total Current Liabilities Long-term debt Total Liabilities 2 Accounts payable Accrued expenses Total Current 5. 4. Liabilities Long-term debt Total Liabilities Common stock Retained earnings Common Equity Total L+E 8. 3. 11 20 Common stock Retained earnings Common Equity Projected Sources of Financing Discretionary Financing Needs (DFN) Total financing needs = Total assets Projected RE- Present RE + Projected Nei Incone- Common Dividend Present RE + Projected Net Income- (50% x Projected NI)
Expert Answer:
Answer rating: 100% (QA)
Item Present LevelRM million Percent of sales Projected LevelRM million Sal... View the full answer
Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1133161646
7th Edition
Authors: Gary A. Porter, Curtis L. Norton
Posted Date:
Students also viewed these accounting questions
-
The J. Mehta Company's production manager is planning for a series of 1-month production periods for stainless steel sinks. The demand for the next 4 months is as follows: DEMAND FOR MONTH STAINLESS...
-
The J. Mehta Companys production manager is planning for a series of 1-month production periods for stainless steel sinks. The demand for the next 4 months is as follows: DEMAND FOR MONTH STAINLESS...
-
Fisher Industries, which makes pumps, is planning for a new product. Current sales projections call for 300,000 units at a sales price of $210 per pump. Management wants to earn a profit margin...
-
Assuming @Weather is a valid repeatable annotation that takes a String, with its associated containing type annotation @Forecast, which of the following can be applied to a type declaration? (Choose...
-
Explain the criteria used to determine whether an educational expense is deductible or nondeductible, and how education expenses are deducted on a taxpayer's return.
-
Find and read a Tax Court regular decision that discusses whether hair transplants are deductible medical expenses. Give the official citation to the case. What did the Tax Court hold? If a case with...
-
A trial balance will not balance if: a. a correct journal entry is posted twice. b. the purchase of supplies on account is debited to Supplies and credited to Cash. c. a $100 cash dividend by the...
-
(Preemptive Rights and Dilution of Ownership) Wallace Computer Company is a small, closely held corporation. Eighty percent of the stock is held by Derek Wallace, president. Of the remainder, 10% is...
-
Post the following July transactions to T - accounts for Accounts Receivable, Sales Revenue, and Cash, indicating the ending balance. Assume no beginning balances in these accounts. sold products to...
-
Fun Silly Toys (FST) produces a number of space themed toys (e.g., astronaut action figures). One of the newer divisions at FST is the board game division, which currently produces and sells one...
-
A futon manufacturer uses the futons as its cost driver. All direct labour is paid on an hourly basis and can easily changed by management. All other factory workers are salaried. Review the...
-
2 If A= 3-2 3+ L4 2 A3-23A 401 = 0 1 then show that 1]
-
What do investment firms and money management firms have in common, Explain in details.
-
Sarah is a 30-year-old software engineer. Right after Sarah graduated from college, she was able to land a stable job, and purchased her first home five years ago. At the time, she put down 20% as a...
-
Why should you follow a systematic decision-making process? Assume you've worked through the contents of this course, can you see the benefits?
-
10: (a) Find Absolute maxima or minima of 2-|x| on [-2, 2] (b) Find maxima and minima of the function f(x)=x-3x+5
-
A patient takes vitamin pills Each day he must have at least 270 IU of vitamin A ,15mg of vitamin B_(1) , and 60 mg of vitamin C. He can choose between pill 1, which contains 150 IU of vitamin A, 3mg
-
Read Case Study Google: Dont Be Evil Unless and answer the following: Why do you think Google was adamant about not wanting to supply information requested by the government concerning the Child...
-
What is the meaning of depreciation to the accountant?
-
Impact of Two Bond Alternatives Yung Chong Company wants to issue 100 bonds, $1,000 face value, in January. The bonds will have a ten-year life and pay interest annually. The market rate of interest...
-
Deferred Tax (Appendix) Erinn Corporation has compiled its 2010 financial statements. Included in the Long-Term Liabilities category of the balance sheet are the following amounts: Included in the...
-
a. Better synchronization of cash inflows and outflows would allow the firm to keep its transactions balance at a minimum, and would therefore lower the target cash balance. b. Improved sales...
-
From an employer's standpoint, the defined benefit plan's major advantage is promotion of low employee turnover. The economic consequences of job-changing are not desirable under a defined benefit...
-
Ideally, the employee will choose the plan that provides the incremental cash flows (both costs and benefits) that maximize the employee's expected utility of consumption. However, there are many...
Study smarter with the SolutionInn App