AFN ASSIGNMENT

ANSWER:

1. Expected increase in current assets

(P6,000,000 x 30%) = 1,800,000 x (4,200,000/6,000,000) = ₱ 1,260,000

2. Spontaneous increase in current liabilities

(P6,000,000 x 30%) = 1,800,000 x (900,000/6,000,000) = ₱ 270,000

3. Projected statement of financial position

Sales (6,000,000 x 130%) 7,800,000

Cost of sales (7,800,000 x 70%) 5,460,000
Gross profit 2,340,000
Operating expenses (7,800,000 x 15%) 1,170,000
Income before taxes 1,170,000
Income tax (1,170,000 X 30%) 351,000
Net income ₱ 819,000

4. Expected increase in retained earnings

(₱819,000 x 40%) ₱ 327,600

5. Additional funds needed

(1,260,000 – 270,000 – 327,600) ₱ 662,400

6. Projected statement of financial position

Current assets (P4,200,000 x 1.3) 5,460,000

Non-current assets 5,000,000
Total assets 10,460,000

Current liabilities (P900,000 x 1.3) 1,170,000

Non-current liabilities 2,500,000
Ordinary shares 4,900,000
Retained earnings (P900,000 + 327,600) 1,227,600
Total 10,016,000
Additional funds needed 662,400
Total liabilities and shareholders’ equity 10,460,000