Page 146 - Corporate Finance PDF Final new link

NPP

146 Corporate Finance BRILLIANT’S

(v) Credit allowed to customers: two months. / H$ñQ>_g© H$mo AZw_{V {X`m J`m H«o${S>Q>… Xmo _mh&
(vi) Time lag in payment of wages: one and half weeks. / doOog Ho$ ^wJVmZ _| Q>mB_ b¡J… S>o‹T> gámh&

(vii) Time lag in payment of overheads: one month. / AmodahoS²>g Ho$ ^wJVmZ _| Q>mB_ b¡J… EH$ _mh&
(viii) Half of the total sales is on cash basis. / Hw$b {dH«$` H$m AmYm ZJX h¡&

(ix) Cash balance is expected to be ` 12,500. / H¡$e ~¡b|g ` 12,500 hmoZo H$s Anojm H$s J`r h¡&
You may assume that production is carried on evenly throughout the year and wages and
overheads accrue similarly. Assume 4 weeks in a month and 52 weeks in a year.
Amn _mZ gH$Vo h¢ {H$ CËnmXZ nyao df© g_mZ ê$n go hþAm h¡ VWm doOog VWm AmodahoS²>g g_mZ ê$n go hmoVo h¢& _mZm
{H$ EH$ _mh _| 4 gßVmh VWm EH$ df© _| 52 gßVmh h¢&
Solution:
Statement Showing Working Capital Requirement

Particulars Amount Amount
(`) (`)

CURRENT ASSETS
1. Stock
52,000  40 4

(a) Raw Materials: 1,60,000
52
(b) WIP
52,000  40 2

(i) Raw Materials: = 80,000
52
52,000 15 2 50

(ii) Labour:  = 15,000
52 100
52,000  30 2 50

(iii) Overheads:  = 30,000 1,25,000
52 100
52,000  85 4

(c) Finished stock: 3,40,000
52
52,000  85 8 1

2. Debtors:  3,40,000
52 2
3. Cash Balance (given) 12,500
Total of Current Assets (A) 9,77,500