Required:

Use the information provided to prepare the pro forma Statement of Financial Position as at 31 December 2018.

INFORMATION

In December 2017, Finch Limited was planning its financial needs for the coming year. As a first indication, the firms management required a pro forma Statement of Financial Position as at 31 December 2018 to gauge the financial needs at that time. The financial condition as at 31 December 2017 was reflected in this Statement of Financial Position:

Statement of Financial Position as at 31 December 2017

R

ASSETS

Non-current assets

451 800

Property, plant and equipment

843 000

Accumulated depreciation (434 600)

Other non- current assets 43 400

Current assets

2 982 400

Inventories

1 825 400

Accounts receivable

722 400

Cash and cash equivalents

434 600

Total assets

3 434 200

EQUITY AND LIABILITIES	R
Equity
992 800
Ordinary share capital 624 000 Retained income 368 800
Non-current liabilities
240 000
Mortgage bond
240 000
Current liabilities
2 201 400
Accounts payable
612 300 Other current liabilities1 589 100
Total equity and liabilities
3 434 200

Additional information

Operations for the following year were projected using the following working assumptions to plan the financial results:

? Sales were forecast at R20 900 000.

? Capital expenditures were scheduled at R42 000 for a delivery van and R72 000 for warehouse improvements.

? Depreciation is expected to be R62 800 for the year.

? Inventories, Accounts receivable and Accounts payable are estimated to be 10%, 4% and 6% of sales respectively.

? Cash balances are desired to be no less than R300 000.

? Net profit after tax is expected at a level of 0.19% of sales.

? Dividends for the year were estimated at R25 000.

? A mortgage loan repayment of R20 000 is expected to be made.

? Other current liabilities will be allowed to fluctuate with seasonal needs.