Wurrall Inc (June 2004)

Hello!

In part (a) I’m getting small problems in arriving at the answers of the examiner such as: Tax allowable depreciation, net interest payable, plant & machinery, reserves and finally short term loans & overdraft.

I would like you to please help me with year 1 figures, and the rest I can continue on my own.

I worked on them like this:
Tax allowable depreciation= 15% * (1012-152) = 129 for year 1

net interest payable = 580*7% = 41 for year 1

plant & machinery = taking the NBV: 860-129= 731

reserves = I took from the question as it was before i.e 864

short term loans & overdrafts = again I took from the question i.e 230

Is there anywhere I could be wrong?

Thank you.