Projected Income Statement

20x4 Basis

Sales 6,000 1.1

Operating Cost (including 200 depreciation) 5,432 1.1
Earning before interest and taxes 568 1.1
Less: Interest Expense 176
Earnings before taxes 392
Taxes- 40% 157
Net Income before preference dividend 235
Dividend- Preference 8
Net Income- Ordinary dividend 227
Dividend- Ordinary 114
Addition to retained earnings

Prejected Statement of Financial Position

20x4 Basis

ASSETS
Cash 20 1.1
Accounts Receivable 750 1.1
Inventory 1,230 1.1
Current Assets 2,000
Net Plant and Equipment 2,000 1.1
Total Assets 4,000

LIABILITIES AND EQUITY

Accounts Payable 120 1.1
Notes Payable 220
Accrued Taxes 280 1.1
Total Current Liabilities 620
Long-term Bonds 1,508
Total Liabilities 2,128

Preference Shares 80
Ordinary Shares (50,000 shares) 260
Retained Earnings 1,532 + 136
Total Equity 1,872
Total Liabilities and Equity 4,000

Additional Funds Needed (AFN) 224

Cumulative AFN 224
 First Pass Feedback Second Pass

6,600 6,600
5,975 5,975
625 625
176 10 186
449 439
180 4 176
269 263
8 8
261 255
125 6 131
136 124

First Pass Feedback Second Pass

22 22
825 825
1,353 1,353
2,200 2,200
2,200 2,200
4,400 4,400

132 132
220 56 276
308 308
660 716
1,508 56 1,564
2,168 2,280

80 80
260 112 372
1,668 1,656
2,008 2,108
4,176 4,388

AFN= 4,400,000- 4,388,000

AFN= 12,000

AFN 12
Cumulative AFN 236