Please help. Use the following information to prepare the Pro Forma Statement of Financial Position of Govan Limited

as at 31 December 2021.

INFORMATION

■ Sales for 2020 amounted to R4 000 000. Seventy percent (70%) of the sales were for cash and the

balance on credit. The cash sales for 2021 are expected to increase by 30% whilst the credit sales

are expected to increase by 40%.

■ Total purchases (all credit) are expected to amount to R3 000 000.

■ Trade and other receivables must be calculated using the percentage-of-sales method.

■ Accounts payable is based on a payment period of 73 days.

■ The company maintains a fixed inventory level of R2 000 000 at the end of each month.

■ Govan Limited expects to show a net decrease in cash of R200 000 during 2021.

■ Equipment with a cost price of R800 000 and accumulated depreciation of R600 000 is expected to

be sold at the end of 2021 for R300 000. Additional property with a cost of R4 000 000 will be

purchased during 2021. Total depreciation for 2021 is estimated at R800 000.

■ 200 000 ordinary shares are expected to be sold at R3 each during January 2021.

■ The company predicts a 20% profit margin (net profit margin).

■ Dividends of R500 000 are expected to be paid by the company during 2021.

■ R1 000 000 will be paid to Jip Bank during 2021. This includes R300 000 for interest on loan.

■ The amount of external non-current funding required must be calculated.​