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Millennium Company - Projected Financial Statement

The document forecasts the projected income statement and statement of financial position for the next period. It projects sales to increase by 20% to ₱2.4 million with corresponding increases to cost of goods sold and operating expenses. It then forecasts the statement of financial position by increasing assets and liabilities based on percentages of projected sales, except for some line items. Additional financing of ₱3,500 is needed to balance the forecasted statement of financial position.

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KathleenCusipag
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675 views2 pages

Millennium Company - Projected Financial Statement

The document forecasts the projected income statement and statement of financial position for the next period. It projects sales to increase by 20% to ₱2.4 million with corresponding increases to cost of goods sold and operating expenses. It then forecasts the statement of financial position by increasing assets and liabilities based on percentages of projected sales, except for some line items. Additional financing of ₱3,500 is needed to balance the forecasted statement of financial position.

Uploaded by

KathleenCusipag
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Step 2. Forecast the Statement of Financial Position.

The Projected statement of financial position will show the following:


Income Statement
Actual Change/ Calculation Forcasted
Sales ₱ 2,000,000.00 2M+(2M*20%) ₱ 2,400,000.00
Cost of sales ₱ 1,200,000.00 Cos+(Cos*20%) ₱ 1,440,000.00
Gross Profit ₱ 800,000.00 ₱ 960,000.00
Operating expenses ₱ 380,000.00 Opex+(Opex*20%) ₱ 456,000.00
Earnings before interest and taxes ₱ 420,000.00 ₱ 504,000.00
Interest expenses ₱ 70,000.00 same ₱ 70,000.00
Earnings before taxes ₱ 350,000.00 ₱ 434,000.00
Taxes (35%) ₱ 122,500.00 434,000*35% ₱ 151,900.00
Earnings after taxes ₱ 227,500.00 ₱ 282,100.00

Dividends ₱ 136,500.00 (36% payment) ₱ 101,600.00


Step 2. Forecast the Statement of Financial Position.
The Projected statement of financial position will show the following:
Statement of Financial Position
Actual Change/Calculation Forecasted
Assets
Cash ₱ 50,000.00 (1) Cash+(Cash*20%) ₱ 60,000.00
Accounts Receivable ₱ 400,000.00 (2) AR+(AR*20%) ₱ 480,000.00
Inventory ₱ 750,000.00 (3) Inv+(Inv*20%) ₱ 900,000.00
Current Assets ₱ 1,200,000.00 ₱ 1,440,000.00
Fixed Assets (net) ₱ 800,000.00 (4) same ₱ 800,000.00
Total Assets ₱ 2,000,000.00 ₱ 2,240,000.00
Liabilities and Equity
Accounts Payable ₱ 250,000.00 (5) AP+(AP*20%) ₱ 300,000.00
Accrued wages ₱ 10,000.00 (6) 10K+(10K*20%) ₱ 12,000.00
Accrued taxes ₱ 20,000.00 (7) 20k+(20k*20%) ₱ 24,000.00
Current Liabilities ₱ 280,000.00 ₱ 336,000.00
Notes Payable - Bank ₱ 70,000.00 (4) same ₱ 70,000.00
Long-term Debt ₱ 150,000.00 (4) same ₱ 150,000.00
Ordinary shares ₱ 1,200,000.00 (4) same ₱ 1,200,000.00
Retained Earnings ₱ 300,000.00 (8) R.E + 282,100 - 101,600 ₱ 480,500.00
Total Liabilities and Equity ₱ 2,000,000.00 ₱ 2,236,500.00
Additional financing required ₱ 3,500.00
Total ₱ 2,240,000.00

Supporting Computations:
(1) Cash = 2.5% x P 2.4M sales
(2) Accounts Receivable = 20% of P 2.4M
(3) Inventory = 37.5% x P 2.4M

(4) No percentage are computed because they are not assumed to maintain a direct relationship
with sales volume. For simplicity, depreciation is not explicitly considered
(5) Accounts Payable = 12.5% of P 2.4M
(6) Accrued Expense = 0.5% of P 2.4M
(7) Accrued taxes = 1% of P 2.4M
(8) Retained Earnings = P300,000 + P282,100 - P101,600

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