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1 From The Following Information Prepare A Statement Showing The Working Capital
1 From The Following Information Prepare A Statement Showing The Working Capital
Raw materials are carried in stock for 3 weeks and finished goods for 2
weeks.
Factory processing will take 3 weeks. (Raw material @ 100% & 50% for
labour & overheads
Suppliers will give 5 weeks credit.
Customers will require 8 weeks credit.
Wages & overhead to be accrued evenly throughout the year.
Answer:
Working Capital 44000/-
Explanation:
A. Raw Material = 0.30X260000X(3/52) = 4500/-
B. Work in Progress = (100% of 0.30)X260000X(3/52) = 4500/-
= (50% of (0.40+0.20)X260000X(3/52) = 4500/-
C. Finished Goods = 0.90X260000X(2/52) = 9000/-
D. Debtor = 1X260000X(8/52) = 40000/-
E. Creditor = 0.30X260000X(5/52) = 7500/-
F. Outstanding Wages = 0.40X260000X(1/52) = 2000/-
Therefore, Net Working Capital (A+B+C+D-E-F) = 44000/-
Illustration 2
Find out the working capital requirement from the following information :
Wages 10%
Overheads 20%
Solution:
Work in Process: