You need to calculate an estimate of working capital and projected Balance Sheet for the year ended on 31.12.20x7 from the following information.

(i) Share capital 500,000 €, Long-term loan (with fixed 15% p.a. interest) of 200,000 €., Fixed assets at cost of 300,000 €.

(ii) The expected ratios of cost to selling price are: Raw materials 60%,

Labour 10%,

Overheads 20%.

(iii) Raw materials are in stores for an average of 2 months.

(iv) Finished goods are kept in warehouse for 3 months.

(v) Expected level of production 120,000 units per year.

(vi) Each unit of production is expected to be in process for 1 month. (vii) Credit given by suppliers is 2 months.

(viii) 20% of the output is sold for cash payment. Time lag in payment from debtors is 3 months.

(ix) Selling price is 5 € per unit

(x) Labour and overheads will accrue evenly during the year.