Jyckurt Company has 10% net profit margin on sales in previous years and expects to maintain the same next year.  The business is expected to increase its sales level from P 500,000 to P 800,000.

The percentages of current assets and current liabilities that have direct relationship with sales are 80% and 25% respectively.  Out of the total earnings that are expected to be realized next year, 40% will be returned to the shareholders in the form of dividends.

 

Required: Compute the following

1.Spontaneous increase in current assets

2.Spontaneous increase in current liabilities

3.Increase in retained earnings

4. Additional funds needed

Answer rating: 100% (QA)

Spontaneous increase in current assets The spontaneous increase in current assets is equal to the pe... View the full answer