PRINCESS Trading Company presents the following data as of December 31, 2018. Percent to sales Amount 10% 25% 200,000 500,000 700,000 200,000 300,000 Cash Accounts Receivable 35% Inventory Accounts Payable Notes Payable 10% 15% The business is expected to increase its sales by 40% next year. It has maintained a net profit margin to sales of 10% with a dividend payout ratio of 40%. Compute the following: 5. Projected increase in current assets 6. Spontaneous increase in current liabilities 7. Increase in retained earnings 8. Additional fund needed.
PRINCESS Trading Company presents the following data as of December 31, 2018. Percent to sales Amount 10% 25% 200,000 500,000 700,000 200,000 300,000 Cash Accounts Receivable 35% Inventory Accounts Payable Notes Payable 10% 15% The business is expected to increase its sales by 40% next year. It has maintained a net profit margin to sales of 10% with a dividend payout ratio of 40%. Compute the following: 5. Projected increase in current assets 6. Spontaneous increase in current liabilities 7. Increase in retained earnings 8. Additional fund needed.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please answer the first picture. The second picture is the formula. Hope you can answer correctly, thankyou in advance!
Transcribed Image Text:Test II. Additional Fund Needed
PRINCESS Trading Company presents the following data as of December 31, 2018.
Percent to sales
Amount
200,000
500,000
700,000
200,000
300,000
10%
25%
Cash
Accounts Receivable
35%
Inventory
Accounts Payable
Notes Payable
10%
15%
The business is expected to increase its sales by 40% next year. It has maintained a net profit margin
to sales of 10% with a dividend payout ratio of 40%.
Compute the following:
5. Projected increase in current assets
6. Spontaneous increase in current liabilities
7. Increase in retained earnings
8. Additional fund needed.
Transcribed Image Text:projected
increase iny
assets
Spontaneous
increase in
current
liabilities
Increase in
retained
earnings
Additional
fund
%3D
needed
projected
increase in
assets
Change in
sales
current assets
(present)
Sales (present)
%3D
Spontaneous
increase in current
Change in
sales
current liabilities
(present)
X.
liabilities
Sales (present)
Increase in.
Earnings
after tax
Dividend payment
retained
earnings
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