Transcribed Image Text:1.
etermine whether additional funds are needed because of the expected increase in sales.
2. Prepare the projected statement of financial position.
MBC Manufacturing Company presents the following information related to 2020 result of operation.
Sales
Current Assets
Non-curent Assets
Current Liabilties
Non-Current Liabilities
Ordinary Shares
Retained Earnings
7,000,000.00
4,200,000.00
2,800,000.00
980,000.00
770,000.00
4.200,000.00
1,050,000.00
The cost of sales is 60% of sales
The operation expenses is 25% of sales.
The interest expense arnounts to P 245,000.00
The applicable tax rate is 30%.
The company expect to maintain this relationship in the 2021 operation and plans to pay 60% of the income as dividend to shareholders.
Because of higher demand of the product and increased shares in the market, the business expect a 10% increase in sales in 2021.
Non-current assets in 2021 are not expected to increase including non-current liabilities spontaneous to the increase in sales.
Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.
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