The following balance sheet was prepared by the management of Mambo Ltd. as at 31 December 2007.

      

The following balance sheet was prepared by the management of Mambo Ltd. as at 31 December 2007.
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The management of the company is evaluating the expected financial requirements for the year
ending 31 December 2008 and has sought your advice as a financial consultant.
The following additional information has been provided to you:
1. Sales revenue for the year ended 31 December 2007 was sh. 20 million while the projected
sales revenue for the year ending 31 December is sh. 24 million.
2. Total assets and current liabilities for year 2008 are expected to increase in the same proportion
as the increase in sales revenue.
3. The average after tax net profit margin of 8% per annum is expected to be maintained in year 2008.
4. The current dividend payout ratio of 70% is also expected to be maintained in the year 2008.
5. Any additional finance required in year 2008 would be obtained through bank loans.

Required:
i) The amount additional long term required in year 2008, if any, to finance the expected increase
in net assets.
ii) Projected balance sheet of the company as at 31 December 2008.

  

Answers


Kavungya
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Kavungya answered the question on May 5, 2022 at 12:34


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