Cash management task 8

clara
clara Registered, AATQB Posts: 20 New contributor ?
Could someone please help. Company has invested £60,000 in the shares of which has ordinary share capital of 100,000 £1 shares. Market price of these shares is £4. The company has just declared a dividend of 22p per share. The dividend yield of Poseidon cruises is ....... %??
Many thanks
genesta

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Answers

  • clara
    clara Registered, AATQB Posts: 20 New contributor ?
    Thank you Mike that is so helpful. Could you help me with this too:
    Company pays supplier 25% month after purchase,45% two months after and remaking 30% month after that
    At end month 3 trade payable forecast is made up of:
    Bal month 1. 18200
    Bal month 2. 60,000
    Bal month 3. 105,500

    What is settlement of month 3 trade payables for month 4 and month 5

    Just can't quite work out right. Please help.
    Thank you.
  • mike150185
    mike150185 Registered Posts: 41
    Assuming that's the whole question, I think this is right (I don't trust answers that aren't round numbers). If I've done it wrong, hopefully someone will correct me.

    Month 1: Purchases = 18,200

    Month 2: 25% of M1 paid = 4,550. Balance of M1 purchases = 13,650 so M2 purchases = 46,350 (60,000 - 13,650).

    Month 3: 40% of M1 paid = 8,190, 25% of M2 paid = 11,587.50. Balance of M1 is now 5,460 (18,200-4,550-8,190). Balance of M2 is 34,762.50 (46,350-11587.50) so M3 purchases = 65,277.50 (105,500-34,762.50-5,460)

    Month 4: 30% of M1 (5,460) + 45% of M2 (20,857.50) + 25% of M3 (16,319.38) = £42,636.88 paid
    Month 5: 30% of M2 paid (13,905) + 45% of M3 paid (29,374.88) = £43,279.88 paid
  • zippi
    zippi Registered Posts: 182 Dedicated contributor ? ? ?
    Hey Clara,

    Which book are you using to practice? I have not come across some these Questions, in this much details before.
  • j1994
    j1994 Registered Posts: 106
    Hi can anyone help me wiv aat assessment 1 2014 task 3b and task 1
  • ManiGoldwater
    ManiGoldwater Registered Posts: 11
    A company has supplied information regarding its forecast sales, labour costs and purchases:
    Purchases: The company pays its suppliers on the basis of
    25% one month after the date of purchase, 45% two months after the date of purchase and 30% three months after the date of purchase. At the end of period 3 the balance of trade payables is forecast to be:
    Balance from period 1 =£18,200
    Balance from period 2 =£60,000
    Balance from period 3 =£105,500
    What is settlement of month 3 trade payables for month 4 and month 5

    -----------------------------------------------------------------------------------------------------------------------------------------------

    Solution:
    The question is really asking to calculate payments that will be made in period 4&5.
    To do this we need to find out the original purchase amount which is missing in the question.
    So we will make a simple key of purchase payment as follows:
    Purchase Payments Key:
    one month after: 25%
    two months after: 45%
    three months after: 30%

    So the payments schedule will follow the following pattern:
    For purchases made in PR-1:
    Payments will be 25% in period 2; 45% in period 3; 30% in period 4
    For purchases made in PR-2:
    Payments will be 25% in period 3; 45% in period 4; 30% in period 5
    For purchases made in PR-3:
    Payments will be 25% in period 4; 45% in period 5; 30% in period 6



    The original purchase figure which is missing can now be calculated with the following formula:
    Purchase = (100% / % of Bal left) × Bal left in £'s
    Purchase in PR-1: (100% / 30% Bal left) × £18200 Bal left = £60666.67
    Purchase in PR-2: (100% / 75% Bal left) × £60000 Bal left = £80000 Purchase in PR-3: (100% /100% Bal left) × £105500 Bal left = £105500


    Now, look back at the purchase payment schedule done above.
    So, we can see that in period 4 we will make the following payments:
    From Purchase in PR-1 0.30 × 60666.67 = 18,200
    From Purchase in PR-2 0.45 × 80000 = £36,000
    From Purchase in PR-3 0.25 × 105500 = £26,375
    Total Payments in Period 4 = 80,575
    And, In period 5 we will make the following payments:
    From Purchase in PR-2 0.30 × 80000 = £24000
    From Purchase in PR-3 0.45 × 105500 = £47475
    Total Payments in Period 5 = £71,475



    Additionally, Period 3 T-Accounts will look like as under:









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