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BRILLIANT’S Working Capital Management 151

E. Expenses 25,000 – NIL
2,76,000
Working Capital likely to be approved by Bankers
Working Notes:

Particulars (`)

A. Calculation of raw material consumed:
Opening Stock of Raw Material 1,40,000
Add: Purchases 7,05,000
8,45,000
Less: Closing Stock of Raw Material 1,25,000
Annual Consumption 7,20,000
B. Cash cost of annual production
Cost of production as given 12,00,000
Less: Depreciation 1,20,000
10,80,000
(iii) It is assumed that there is neither opening stock of finished goods nor closing stock.
Hence, cost of sales is taken to ` 10,80,000 after deducting depreciation.
(iv) 15 days taken as half month.
OPERATING CYCLE METHOD / Am°naoqQ>J gm`H$b {d{Y

Illustration 2.3.5
The following are the data of Z Ltd. taken from the accounting records:
Z {b{_Q>oS> Ho$ AH$mC§qQ>J [aH$m°S²>©g go {b`m J`m S>mQ>m ZrMo {X`m J`m h¡…

Particulars ({ddaU) (`)
Average Stocks of Raw Materials during the Year
Mmby df© ‘| am° ‘Q>o[a¶ëg H$m EdaoO ñQ>m°H$ 1,80,000
Average Stocks of Work-in-Progress during the Year
Mmby df© ‘| dH©$-BZ-àmoJ«og H$m EdaoO ñQ>m°H$ 1,00,000
Average Stocks of Finished Goods during the Year
Mmby df© ‘| {’${ZíS> JwS²>g H$m EdaoO ñQ>m°H$ 54,000
Average Balance of Debtors during the Year
Mmby df© ‘| S>oãQ>g© H$m EdaoO ~¡b|g 1,50,000
Average Balance of Creditors during the Year
Mmby df© ‘| H«o${S>Q>g© H$m EdaoO ~¡b|g 1,20,000
Average Daily Sales / X¡{ZH$ EdaoO goëg 2,000