Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

kindly find working capital! From the following projections determine the working capital that would be required by United Company Ltd. Annual sales (at two months

image text in transcribed

kindly find working capital!

From the following projections determine the working capital that would be required by United Company Ltd. Annual sales (at two months credit) Rs 8,000,000 Raw Material consumed(two months credit) Rs 2,000,000 Wages Paid(monthly in arrear) Rs 1,600,000 Manufacturing cash expenses (Cash expenses are Rs paid one month in arrear) 12,00,000 Total admn expenses(paid as incurred) Rs 500,000 Sales promotion expenses(paid quarterly in arrears) Rs. 400,000 The company sells its product at a gross profit of 30% Depreciation forms a part of cost of production It keeps two months stock of raw materials and finished goods and cash of Rs 300,000 Assuming a 20% safety margin, calculate the working capital requirement of the company Ignore work in progress From the following projections determine the working capital that would be required by United Company Ltd. Annual sales (at two months credit) Rs 8,000,000 Raw Material consumed(two months credit) Rs 2,000,000 Wages Paid(monthly in arrear) Rs 1,600,000 Manufacturing cash expenses (Cash expenses are Rs paid one month in arrear) 12,00,000 Total admn expenses(paid as incurred) Rs 500,000 Sales promotion expenses(paid quarterly in arrears) Rs. 400,000 The company sells its product at a gross profit of 30% Depreciation forms a part of cost of production It keeps two months stock of raw materials and finished goods and cash of Rs 300,000 Assuming a 20% safety margin, calculate the working capital requirement of the company Ignore work in progress

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books