Prepare the Pro Forma Statement of Financial Position as at 31 December 2023 from the Statement of Financial Position and additional information provided below: 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 R ASSETS Non-current assets 1 400 000 Property, plant and equipment 1 200 000 Fixed deposits 200 000 Current assets 5 800 000 Inventories 3 400 000 Accounts receivable 2 000 000 Cash and cash equivalents 400 000 Total assets 7 200 000 EQUITY AND LIABILITIES Equity 4 680 000 Ordinary share capital 3 600 000 Retained earnings 1 080 000 Non-current liabilities 720 000 Long-term loan 720 000 Current liabilities 1 800 000 Accounts payable 1 800 000 Total equity and liabilities 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).
Prepare the Pro Forma
Financial Position and additional information provided below:
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
R
ASSETS
Non-current assets 1 400 000
Property, plant and equipment 1 200 000
Fixed deposits 200 000
Current assets 5 800 000
Inventories 3 400 000
Accounts receivable 2 000 000
Cash and cash equivalents 400 000
Total assets 7 200 000
EQUITY AND LIABILITIES
Equity 4 680 000
Ordinary share capital 3 600 000
Retained earnings 1 080 000
Non-current liabilities 720 000
Long-term loan 720 000
Current liabilities 1 800 000
Accounts payable 1 800 000
Total equity and liabilities 7 200 000
Additional information
The following must be taken into account for 2023:
■ Sales are
(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).
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