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for part i) how come the retained earnings increase to 5 and cash be nil?
part ii) Why the cash has increased to 5?(i) The retained earnings were 2.6, they are forecast to be 2.4 for next year. 2.6 + 2.4 = 5
Since every other figure on the SOFP is given in the question, cash is the balancing figure and is zero. (or if you prefer it is 7.6 – 10 (repay shares) + 2.4 (earnings for the year) = 0 )
(ii) because of the refinancing! As the answers says, it is the balancing figure after arriving at all the other figures on the statement
Thnks alot, small things makes me confusing, just under 20 days more my second attempt.
Doing alot pp now…
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