HELP!!! IMPORTANT!!!

guys, sino accounting student or accounting graduate dyan??? need your help badly. message nyo ko dito or pm nyo ko. pls pls pls. need your assistance talaga. as in. thanks in advance guys.

sino kaya accounting course nya dito? hay.

ehem....

ano ba problema lassallee?

may need kasi cousin ko na isolve na problem. actually finals nila to. eh ala naman akong accounting subject before. engineer kasi ako. hehe. medyo need nya to by saturday morning.

matutulungan mo ba ako coco?

suggestion ko lang la salle 09..ilagay mo nlng yung problem na gusto mo ipa solve malay mo may alam nun..hehehe

oo nga.... post mo dito!

pano ko ipopost? eh attachment kasi un?

ano be yung prob?

finals xa ng cousin ko. post ko.

FINALS

CASE: YOU’VE GOT A FRIEND

You recently learned that a long-lost relative died
and left your friend a large sum of money. She know little about financial
matters, so she consulted you asked you to be his financial advisor to help him
decide what to do with the funds.

Through a mutual friend, he heard of his friend’s
company. He claims that he manages a
very successful research company, owned by a group of European investors. In
its short history, the company has earned a reputation for innovation in
software development. As he describes it, the company’s research staff is on
the verge of designing a voice-activated word-processing system that will
revolutionize word-processing in the future and
has come to him for additional capital—P1 million, to be exact. The company’s research and development
efforts have run short of funds, and money is still needed to complete the
design. Although he shared with you that there was recent fraud where Some
managers, claim that required methods for computing manager pay overstate the
company’s costs and unfairly understate net income.

Your first thought is that you simply cannot accept
his word without some documented evidence. How do you really know that they
have successfully managed this business for the past two years and that P1
million will enable the company to turn this design into a fortune in the
future? After careful consideration, you decide that you need to see some proof
before making a final decision.

So you ask for specific documents and he agrees to
provide you with such documentation. Several days later, he returns with a set
of financial statements prepared by the accountants. He explains the meanings
of the numbers on the statements and further claims that the records at his
office can be used to verify them.

Taken at face value, the figures look promising,
but somehow his explanation is not convincing.
It occurs to you that they might fabricate or at least influence the
figures. After all, they need money, and who would blame them for showing you
only the figures that make the situation look attractive to a potential
investor?

As you realize, however, that you know very little
about either generally accepted auditing standards or generally accepted
accounting principles and that the management made a number of significant
estimates when preparing the statements. This discovery is somewhat troubling
because, even with the audit, it seems that the management may have had some
subjective influence on the financial statements.

You and your friend decided that should you embark
on this investment, it should be a long term plan. Thus a plan was drawn, if
ever and an expansion was seen after 1
year of operation. Based on the computations of the engineer, total costs of
construction will amount to P 4M. Part of the objective was if they can settle by the end of the year the P
4M they are planning to borrow to
finance the construction.


Based on the financial budget. below are the
assumptions used for preparation of the cash budget:


a. Projected sales from
June 2010 to January 2011 are as follows(in Millions)

MONTH	Sales
June	4
July	4.5
August	4
September	4.5
October	5
November	6
December	7.5
January	5

Sales in May _ P 4M


b.
Sales are collected as
follows:


a. 1. Month
of sales -30% These collections are entitled to a 2% discount


b. A month
after sales-50%


c. 2 months
after sale – 20%


c.
Purchases are made a month
before sale and will equivalent to 75% of gross sales. You will try to
negotiate a 30day credit term from the suppliers;


d.
Fixed operating expenses
(composed of salaries, rent, utilities) amount to P 300,000 a month. Variable
expenses account 6% of gross sales;


e.
Monthly interest payment on
the loan will be P 100,000;


f.
2 payments of P 2.5M for the
constructions are expected to be paid in Sept and Dec 2010;


g.
Cash balance as of the end of
June is expected to be P 750,000. target cash balance s P 500,000;


h.
The company is subject to 30%
tax rate. The following quarter tax payments are expected to be made in August
and November amounting to P 350,000 and P 441,600. respectively;





You realize, however, that the future is uncertain
and that your investment involves risks. You have listened to your friend’s
story and now must decide what to do.


With the figures above, prepare the ff. based on
the 3 financial statements (Schedule 1) as follows:





1.
Analysis of the Financial
ratios of the financial statements given as to the liquidity, profitability ,
etc. (as discussed).


2.
Analysis of the statement of cash flows. You should point
out the details of the company’s cash position as far as operating, investing
and financing activities are concerned.


3.
Prepare the cash budget and
answer if they can settle by the end of the year the P 4M they are planning to
borrow to finance the construction.


4.
Draw up an investment
portfolio for any remaining cash on hand at the end of the 8 months of
operations. The investment should be a diversified portfolio which should
include at least 3 kinds of investments we have discussed. Rates and other
pertinent data should be updated.






Schedule 1 FINANCIAL
STATEMENTS

2005 2004

BALANCE SHEET

ASSETS

Cash 100,000 60,000

Accounts Receivables 80,000 90,000

Equipment 330,000 300,000

Land 500,000 500,000

Total Assets 1,010,000 950,000

LIABILITIES AND STOCKHOLDERS’ EQUITY

Short Term payables 50,000 30,000

Long term payables 420,000 450,000

Retained Earnings

Beg Balance 470,000 400,000

Add Net Income 200,000 150,000

Less Dividends 130,000 80,000

Total Liabilities and Stockholders’ Equity 1,010,000 950,000

INCOME STATEMENT

Revenue 1,650,000 1,500,000

Expenses 1,450,000 1,350,000

Net Income 200,000 150,000

STATEMENT OF CASH FLOWS

Net Cash from Operating Activities 250,000 120,000

Net Cash from Investing Activities (50,000) (340,000)

Net Cash Flow from Financing Activities (160,000) 280,000

Net Decrease/(Increase in Cash 40,000 60,000

Beginning Cash Balance 60,000 0

Ending Cash Balance 100,000 60,000

ayan po. sana matulungan nyo ko. huhuhu.

sayo 'tp noh?

la salle..ang hirap naman pala..hehehee...sana may makatulog kay la salle..heheee

anong subject ba 'to lasallee, Financial Accounting?

hindi sakin yan. sa cousin ko. desperado na xa. hahaha. eh naaawa naman kasi ako sa kanya. di ko kasi xa matulungan kasi nga engineering course ko. hindi accountancy. hehe. may makakatulong kaya sakin?

un ang hindi ko alam coco. wait ask ko xa.

financial accounting daw coco.

naku hinuram book ko sa Financial...

waaaahhhh. sayang. pano kaya to? hay. di ko kasi talaga kaya gawin. ala ko alam sa accounting.

lol sino ba nagpaturo jan??heheh accounting student ba siya?heheee

lol project mo ba ito lasalle?

cge na nga. aminin ko na. di sakin yang finals na yan. nagpapatulong kasi sakin si jed. need na nya yan.

accounting major ba sya?