a) Prepare a projected cash flow statement for the six months ending 30 November that shows the cash balance at the end of each monthb) Compute the projected inventories levels at the end of each month for the six months to 30 Novemberc) Prepare a projected income statement for the six months ending30 November. d) What problems is Newtake Records Ltd likely to face in the nextsix months? Can you suggest how the business might deal with these problems Newtake Records LtdForecast InformationAugust£ 180,000.00 £ 230,000.00 £ 320,000.00 £ 250,000.00 £ 140,000.00 £ 120,000.00 £ 110,000.00£ 135,000.00 £180,000.00 £142,000.00 £ 94,000.00 £ 75,000.00 £ 66,000.00 £ 57,000.00£ 52,000.00 £ 55,000.00 £ 56,000.00 £ 53,000.00 £ 48,000.00 £ 46,000.00 £ 45,000.00£ 22,000.00 £ 24,000.00 £ 28,000.00 £ 26,000.00 £ 21,000.00 £ 19,000.00 £ 18,000.00£ 22,000.00£ 5,000.00 £ 5,000.00 £ 5,000.00 £ 5,000.00 £ 5,000.00 £ 5,000.00 £ 5,000.00£ 14,000.00 £ 18,000.00 £ 6,000.00MayJuneJulySeptemberOctoberNovemberExpected SalesPurchasesAdmin ExpensesSelling Expenses|Таx PaymentFinance PaymentsShop Refurbishment Notes:1 Inventories held at 1 June were £112,000. The business believes itis necessary to maintain a minimum inventories level of £40,000over the period to 30 November of the same year.2 Suppliers allow one month's credit. The first three months'purchases are subject to a contractual agreement that must behonoured.3 The gross profit margin is 40 per cent.4 All sales income is received in the month of sale. However, 50 percent of customers pay with a credit card. The charge made by thecredit card business to Newtake Records Ltd is 3 per cent of thesales value. These charges are in addition to the selling expensesidentified above. The credit card business pays Newtake RecordsLtd in the month of sale.5 The business has a bank loan that it is paying off in instalments of£5,000 per month. The interest element represents 20 per cent ofeach instalment.6 Administration expenses are paid when incurred. This item includesa charge of £15,000 each month in respect of depreciation.7 Selling expenses are payable in the following month.

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a) Prepare a projected cash flow statement for the six months ending 30 November that shows the cash balance at the end of each month b) Compute the projected inventories levels at the end of each month for the six months to 30 November c) Prepare a projected income statement for the six months ending 30 November. d) What problems is Newtake Records Ltd likely to face in the next six months? Can you suggest how the business might deal with these problems

a) Prepare a projected cash flow statement for the six months ending 30 November that shows the cash balance at the end of each month b) Compute the projected inventories levels at the end of each month for the six months to 30 November c) Prepare a projected income statement for the six months ending 30 November. d) What problems is Newtake Records Ltd likely to face in the next six months? Can you suggest how the business might deal with these problems

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 9P: Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year were 4,562,500 and...

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