September / December 2015 Q3

This topic has 5 replies, 3 voices, and was last updated 8 years ago by John Moffat.

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March 5, 2016 at 6:02 pm #303659
fhamoud
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SFOP
After refincing take place
Directors would subscribed to an addition of 15m and Gupte VC of 20 m at par. = 35m addition.
8.5% loan note would be increased to $65m and current loan is $30m = 35m addition
Based on my understanding these additions should increase the current asset (Cash item).
Examiner answer, the addition is reflected on non current asset and current asset excluding cash.
Kindly advise
March 6, 2016 at 8:22 am #303738
John Moffat
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Note 5 of the question says what the finance is being used for.
March 6, 2016 at 2:23 pm #303840
fhamoud
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Thank you for the answer
March 6, 2016 at 9:13 pm #303907
John Moffat
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You are welcome 🙂
May 29, 2017 at 8:45 am #388731
Anonymous
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Mr.Moffat
Can you explain to me how the Retained earnings reduce to $5m from $2.6m in 2015,after the refinancing takes place.
May 29, 2017 at 9:13 am #388740
John Moffat
Keymaster
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The retained earnings at 30 June 2015 are 2.6M (as per the question).
The forecast retained profits for 2016 are 2.4M, and so the retained earnings on the SOFP for 30 June 2016 will increase by 2.4M to 5M.
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