QUESTION 1 (20 Marks) 1.1 REQUIRED Use the following financial data to prepare the Pro Forma…

QUESTION 1 (20 Marks) 1.1 REQUIRED Use the following financial
data to prepare the Pro Forma Statement of Financial Position as at
31 December 2021.

INFORMATION

Stylcor Ltd has provided the following financial data needed to
prepare the Pro Forma Statement of Financial Position as at 31
December 2021.

? Sales for 2020 amounted to R3 800 000 and sales for 2021 are
estimated to increase to R4 000 000.

? Plant and equipment costing R300 000 will be purchased during
2021. Total depreciation for 2021 is expected to amount to R225
000.

? The following must be projected using the percentage of
sales:

? Inventory

? Accounts receivable

? Accounts payable

? The business will maintain a cash balance of R120 000 and any
surplus cash will be invested in long term financial
investments.

? 50 000 shares at R5 each are expected to be issued in June
2021.

? The business predicts an 8% net profit margin.

? A final dividend of 20 cents per share is expected to be
proposed in December 2021, payable in January 2022.

? The long term loan will be reduced by capital payments
amounting to R50 000

The Statement of Financial Position as at 31 December 2020 is as
follows

ASSETS
Non-current assets	2 100 000
Fixed/Tangible assets	2 100 000
	1 596 000
Current assets
Inventories	532 000
Accounts receivable	760 000
Cash and cash equivalents	304 000
Total assets	3 696 000
EQUITY AND LIABILITIES
Equity	2 336 000
Ordinary share capital (500 000 shares)	1 500 000
Retained earnings	836 000
Non-current liabilities	410 000
Long-term loan	410 000
Current liabilities	950 000
Accounts payable	950 000
Total equity and liabilities	3 696 000