DRILLS Business finance

The statement of financial position and statement

of comprehensive income for the year ending
December 31, 2019 are shown below. Find out if the
company will have excess cash or need additional
funds. Prepare the projected financial statements
(Projected Statement of Financial Position and
Projected Statement of Comprehensive Income).
a. Sales are expected to increase by 10% in 2020 from the 2019 sales level. The sales of the
company increased by 10% annually from 2015 to 2019.
b. The cost of sales, cash, receivable, inventories, other current assets, and trade payable are
expected to change with sales based on the financial statements in 2019. The variable
operating expenses is 9% of sales. The depreciation expense is 10% of the gross beginning
balance of property, plant, and equipment. The gross balance of PPE was Php 32,000,000.00
(December 31, 2019). The new PPE for 2020 is Php 5,000,000.00. The PPE acquired in the first
half of the year will depreciate for one full year.
c. There are two-long term loans as of December 31, 2019. Both have an annual interest rate of
10%. The first loan will mature on June 30, 2020. Thus, the loan amounting to Php 1,250,000.00
has to be paid on or before June 30, 2020. The second loan amounting to Php 3,000,000.00
which was incurred on December 31, 2019 is paid at the rate of Php 1,000,000.00 principal
balance every December 31. New loans of Php 3,000,000 will be incurred on December 31,
2020 payable at the rate of Php 1,000,000.00 every December 31. Annual interest rate is
expected at 8%
d. The income tax rate is 30%. Seventy-five percent (75%) of the income tax payable will be
paid in 2020 while the balance will be paid in 2021.
e. Other noncurrent assets and other current liabilities will remain unchanged.
f. Cash dividends of Php 3,000,000.00 will be paid in 2020.