Cadbury plc is a global confectionery company.Cadbury is forecasting its financial statements for Year 5.Selected financial information for Year 4 is provided in the table.What is the long term debt,the plug variable,amount for the forecasted year? To forecast accounts payable use the percentage of sales method based on Year 4 figures.Assume that no dividends are paid in Year 5.
Selected Financial Information
Cadbury plc Year 4 (£ millions)

Question

Quizplus · Accepted Answer

Calculate Accounts Payable % of sales from Year 4: 38.56% A/P = (5,802) × (0.3856) = $2,237 Long Term Debt₅ = Total Assets - Total Shareholders' Equity - Total Current Liabilities - Other Liabilities Total Shareholders' Equity₅ = Common Stock₅ + Retained Earnings₅ Retained Earnings₅ = Retained Earnings₄ + Net Income₅ - Dividends₅ Retained Earnings₅ = 2,498 + 528 - 0 = $3,026 Total Shareholders' Equity₅ = 1,036 + 3,026 = $4,062 Long Term Debt₅ = £10,275 -4,062 - £3,426 - £648 = £2,138

Cadbury Plc Is a Global Confectionery Company