Retained earnings 1 400 000 Non-current liabilities 1 600 000 Long-term loan 1 600 000 Current liabilities 1 000 000 Trade and other payables 976 000 Income tax payable 24 000 Total equity and liabilities 5 200 000
Retained earnings 1 400 000 Non-current liabilities 1 600 000 Long-term loan 1 600 000 Current liabilities 1 000 000 Trade and other payables 976 000 Income tax payable 24 000 Total equity and liabilities 5 200 000
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter12: Valuation: Cash-flow Based Approaches
Section: Chapter Questions
Problem 2BIC
Related questions
Question
Additional information
1) Sales for the year ended 31 December 2021 are expected to total R7 200 000, an increase of R800 000 over the previous year ended 31 December 2020. A profit margin (net profit margin) of 10% is expected.
2) A final dividend of 80 cents per share is expected to be recommended on 31 December 2021. These dividends will be paid during 2022.
3) Cash and cash equivalents and Ordinary share capital are expected to remain unchanged.
4) Trade and other receivables represent approximately 20% of the annual sales.
5) The company’s closing inventory will change directly with changes in sales for the financial
year ended 31 December 2021.
6) An old machine (Cost price R400 000; Accumulated depreciation R360 000) is expected to
be sold at carrying value on 31 December 2021 and a new machine with a cost price of R500 000 will be purchased on the same date to replace it. Total depreciation for the year ended 31 December 2021 is estimated at R240 000.
7) Trade and other payables will change directly in response to changes in sales for the financial year ended 31 December 2021.
8) Income tax payable is likely to equal 10% of the estimated tax of R342 000.
9) R400 000 of the long-term loan will be repaid during the financial year ended
31 December 2021.
Transcribed Image Text:QUESTION 1
REQUIRED
Use the information provided below to prepare the Pro Forma Statement of Financial Position
as at 31 December 2021.
The amount of external non-current funding required must be
calculated.
INFORMATION
HEIDI (PTY) LIMITED
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020
ASSETS
Non-current assets
2 800 000
Fixed/Tangible assets
2 800 000
Current assets
2 400 000
Inventories
800 000
Trade and other receivables
1 200 000
Cash and cash equivalents
400 000
Total assets
5 200 000
EQUITY AND LIABILITIES
Equity
2 600 000
Ordinary share capital (600 000 shares)
1 200 000
Retained earnings
1 400 000
Non-current liabilities
1 600 000
Long-term loan
1 600 000
Current liabilities
1 000 000
Trade and other payables
976 000
Income tax payable
24 000
Total equity and liabilities
5 200 000
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