1.1 REQUIRED Use the following information to prepare the Pro Forma Statement of Financial Position of Simbithi Limited as at 31 December 2018. Where applicable, round off amounts to the nearest Rand. (17 marks) INFORMATION 1 Sales of Simbithi Limited for 2017 amounted to R6 000 000. The sales for 2018 are expected to increase by R2 000 000. All sales are on credit. Accounts payable must be calculated using the percentage-of-sales method: Accounts receivable is based on a collection period of 36.5 days. The following ratios are forecast for 2018: Gross margin 25% (Net) Profit margin 10% All purchases of inventory are on credit. Purchases for 2018 are projected at R5 000 000. The business expects to show a net increase in cash of R100 000 at the end of 2018. Machinery with a cost price of R800 000 and accumulated depreciation of R800 000 is expected to be scrapped at the end of 2018. Machinery costing R4 800 000 will be purchased to replace the machinery that will be scrapped. Total depreciation for 2018 is forecasted at R600 000. 200 000 ordinary shares are expected to be sold at R4 each during January 2018. Dividends of R600 000 are expected to be recommended by the directors during December 2018. These dividends will be paid during 2019. R1 100 000 will be paid to Neb Bank during 2018. This includes R400 000 for interest on loan. The amount of external funding (non-current debt) required must be calculated. SIMBITHI LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017 R ASSETS Non-current assets 6 000 000 Fixed/Tangible assets 6 000 000 3 800 000 Current assets Inventories 1 880 000 Accounts receivable 1 600 000 Cash and cash equivalents 320 000 Total assets 9 800 000 EQUITY AND LIABILITIES Shareholders' equity 4680 000 Ordinary share capital 3 400 000 Retained earnings 1 280 000 Non-current liabilities 4 400 000 Long-term loan (Neb Bank) 4 400 000 Current liabilities 720 000 Accounts payable 720 000 Total equity and liabilities 9 800 000