Prepare the Pro Forma Statement of Financial Position as at 31 December 2023 from the Statement ofFinancial Position and additional information provided attached? INFORMATIONThe financial position of Gatti Limited as at 31 December 2022 is reflected the following statement:Statement of Financial Position as at 31 December 2022ASSETSNon-current assetsProperty, plant and equipmentFixed depositsCurrent assetsInventoriesAccounts receivableCash and cash equivalentsTotal assetsEQUITY AND LIABILITIESEquityOrdinary share capitalRetained earningsNon-current liabilitiesLong-term loanCurrent liabilitiesAccounts payableTotal equity and liabilitiesR1 400 0001 200 0002000005 800 0003 400 0002 000 000400 0007 200 0004 680 0003 600 0001 080 000720 000720 0001 800 0001 800 0007 200 000 Additional informationThe following must be taken into account for 2023:■ Sales are forecast at R60 000 000, with a profit margin of 10% and a gross margin of 30%. Fifty percent(50%) of the sales is expected to be for cash and the balance is on credit.■The debtor collection period is expected to be 36.5 days.■ All purchases of inventories are expected to be on credit and are estimated to total R48 000 000. Thecreditor payment period is estimated to be 73 days.Equipment with a cost price of R8 000 000 is expected to be purchased on 01 July 2023. Total■■depreciation is expected to be R800 000 for the year.The maturity dates of the fixed deposits are as follows:R80 000 01 May 2023R120 000 31 May 2025The loan balance is expected to be reduced by R60 000.The directors are expected to recommend a final dividend of R4 000 000, payable during 2024.A bank balance of 1% of sales is desired.Ordinary share capital will remain unchanged.The amount of external non-current funding required must be calculated (balancing figure).|

A statement of financial position is one of the basic financial statements that represents the…

Answered: INFORMATION The financial position of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Prepare the Pro Forma Statement of Financial Position as at 31 December 2023 from the Statement of
Financial Position and additional information provided attached?

INFORMATION
The financial position of Gatti Limited as at 31 December 2022 is reflected the following statement:
Statement of Financial Position as at 31 December 2022
ASSETS
Non-current assets
Property, plant and equipment
Fixed deposits
Current assets
Inventories
Accounts receivable
Cash and cash equivalents
Total assets
EQUITY AND LIABILITIES
Equity
Ordinary share capital
Retained earnings
Non-current liabilities
Long-term loan
Current liabilities
Accounts payable
Total equity and liabilities
R
1 400 000
1 200 000
200
000
5 800 000
3 400 000
2 000 000
400 000
7 200 000
4 680 000
3 600 000
1 080 000
720 000
720 000
1 800 000
1 800 000
7 200 000

Additional information
The following must be taken into account for 2023:
■ Sales are forecast at R60 000 000, with a profit margin of 10% and a gross margin of 30%. Fifty percent
(50%) of the sales is expected to be for cash and the balance is on credit.
■
The debtor collection period is expected to be 36.5 days.
■ All purchases of inventories are expected to be on credit and are estimated to total R48 000 000. The
creditor payment period is estimated to be 73 days.
Equipment with a cost price of R8 000 000 is expected to be purchased on 01 July 2023. Total
■
■
depreciation is expected to be R800 000 for the year.
The maturity dates of the fixed deposits are as follows:
R80 000 01 May 2023
R120 000 31 May 2025
The loan balance is expected to be reduced by R60 000.
The directors are expected to recommend a final dividend of R4 000 000, payable during 2024.
A bank balance of 1% of sales is desired.
Ordinary share capital will remain unchanged.
The amount of external non-current funding required must be calculated (balancing figure).
|

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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