Allied Company expects sales of Rs 2.4 million next year and the same amount the following year. Sales are spread evenly throughout the year. On the basis of the following information, prepare a forecast income statement and balance sheet for year end:
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Write My Essay For Me1. Cash: Minimum of 4 percent of annual sales.
2. Accounts receivable:60-day average collection period based on annual sales.
3. Inventories: Turnover of eight times a year.
4. Net fixed assets:Rs 500,000 now. Capital expenditures equal to depreciation.
5. Accounts payable:One month’s purchases.
6. Accrued expenses:3 percent of sales.
7. Bank borrowings:Rs 27,000 now.
8. Can borrow up to Rs 250,000.
9. Long-term debt:Rs 300,000 now, payable Rs 75,000 at year end.
10. Common stock:Rs 100,000. No additions planned.
11. Retained earnings:Rs 500,000 now.
12. Net profit margin:8 percent of sales.
13. Dividends: None.
14. Cost of goods sold:60 percent of sales.
15. Purchases: 50 percent of cost of goods sold.
16. Income taxes:50 percent of before-tax profits.
Q6. Using the data below produce common size and indexed balance sheet.
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