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Can you please kindly explain that how the net interest payable for income statement has been calculated?
I calculated figure for yr.1, but cant calculate for the rest of 3 years.The interest is 8% x 580 = 46.4, plus 7% of the previous years balance on short term loans. So for 20×6, the short-term loan as 20×5 was 266, and so the interest is 7% x 266 = 18.6.
So the total interest for 20×6 is 46.4 + 18.6 = 65.
It is the same calculation for each of the later years.
@johnmoffat said:
So for 20×6, the short-term loan as 20×5 was 266, and so the interest is 7% x 266 = 18.6.So the total interest for 20×6 is 46.4 + 18.6 = 65.
It is the same calculation for each of the later years.
Fair enough . Cant get how you got the closing figure for 20×6 figure which is 266. Explain this and also for the rest of years. In Fact explain this figure for all the 4 years.
Will be really thankful.
Sorry, but since the closing figures are the balancing figures, it would mean me writing out a complete answer here (and I am not going to do that!).
You need to fill in all the figures that change according to the percentages. Then complete the Statements of profit or loss, so you then know the amount transferred to reserves.
Then you can complete the Statements of financial position with the short-term borrowings being the missing figure. It is a financial accounting exercise rather than a financial management problem.
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