REQUIRED

Use the information provided below to prepare the following:

$2\mathrm{.}1$ Pro Forma Statement of Comprehensive Income for the year ended $31$ December $2024$

using the percentage$-$of$-$sales method.

$(6$ marks$)$

$2\mathrm{.}2$ Pro Forma Statement of Financial Position as at $31$ December $2024.(14$ marks$)$

INFORMATION

The following information was provided by Sharpe Ltd to ass ist with the preparation of the pro forma financial

statements for the financial year ended $31$ December $2024$

SHARPE LTD

STATEMENT OF FINANCIAL POSITION AS AT $31$ DECEMBER $2023$

Additional information

Sales for the year ended $31$ December $2024$ are expected to be R$8000000$

Company tax is calculated at $27\%$ of the pre$-$tax profit. Company tax payable $($owing$)$ on $31$ December

$2024$ will equal to $10\%$ of the tax calculated in the $2024$ Pro Forma Statement of Comprehensive

Income.

An old machine $($Cost price R$400000$; Accumulated depreciation R$136000)$ is expected to be sold at

carrying value $($book value$)$ on $31$ December $2024$ and a new machine with a cost price of R$600000$

will be purchased on the same date to replace it$.$ Total depreciation for the year ended $31$ December

$2024$ is expected to be R$560000.$

The company's closing inventory willchange directly with changes in sales for the financial yearended

$31$ December $2024.$

Accounts receivable represent approximately $18\%$ of the annual sales.

The cash balance is expected to remain unchanged.

The authorized share capital consists of $500000$ shares of which $300000$ have been issued up to $31$

December $2023.$ Forty percent $(40\%)$ of the unissued shares will be sold at R$3$ each during July $2024.$

A final dividend of $80$ cents per share is expected to be recommended on $31$ December $2024$ on all the

issued shares and is payable during $2025.$

R$200000$ of the loan will be repaid to VIP bank during the financial year ended $31$ December $2024.$

Accounts payable will be based on a payment period of $54\mathrm{.}75$ days. Credit purchases for $2024$ are

expected to amount to R$5700000.$

The cash balance must be calculated $($balancing figure$).$