Guidelines: All answers must be typed out and workings must be showing.

QUESTION 2 2.1 REQUIRED Use the following information to prepare the Pro Forma Statement of Financial Position of Umhlali Limited as at 31 December 2021. Where applicable, round off amounts to the nearest Rand. INFORMATION Sales of Umhlali Limited for 2020 amounted to R3 000 000. The sales for 2021 are expected to increase by R1 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 30 days. The following ratios are forecast for 2021: Gross margin 25% (Net) Profit margin 10% All purchases of inventory are on credit. Purchases for 2021 are projected at R2 500 000 The business expects to show a net increase in cash of R50 000 during 2021. Machinery with a cost price of R400 000 and accumulated depreciation of R400 000 is expected to be scrapped at the end of 2021. Machinery costing R2 400 000 will be purchased to replace the machinery that will be scrapped. Total depreciation for 2021 is forecasted at R300 000. 100 000 ordinary shares at R4 each are expected to be sold during January 2021. Dividends of R300 000 are expected to be recommended by the directors during December 2021. The dividends will be paid during 2022. R550 000 will be paid to Zap Bank during 2021. This includes R200 000 for interest on loan. The amount of external funding (non-current debt) required must calculated Umhlali limited Statement of Financial Position as at 31 December 2020 R ASSETS Non-current assets 3 200 000 Fixed/Tangible assets 3 200 000 Current assets 1 700 000 Inventories 940 000 Accounts receivable 600 000 Cash and cash equivalents 160 000 Total assets 4 900 000 EQUITY AND LIABILITIES Shareholders' equity 2 340 000 Ordinary share capital Retained earnings Non-current liabilities Long-term loan (Zap Bank) Current liabilities Accounts payable Total equity and liabilities 1 700 000 640 000 2 200 000 2 200 000 360 000 360 000 4 900 000 2.3 REQUIRED Use the information provided below to calculate the total value of issues to production during May 2020 and value of closing inventory as at 31 May 2020 using the: 2.3.1 First-in-first-out (FIFO) method 2.3.2 Weighted average cost method (with the weighted average cost per unit expressed to the nearest cent). INFORMATION The following transactions of Tabac Manufacturers took place during May 2020 in respect of a component used in production: May 01 Opening inventory (including import duty) 200 units @ R20 per unit 15 Purchased from a supplier 3 800 units @ R19 per unit Import duties on purchases 3 800 units @ R2 per unit 16 Returned to the supplier (purchased on 15 May 2020) 300 units A refund was received for the import duties. 21 Purchased from a supplier 1 300 units @ R20 per unit Import duties on purchases 1 300 units @ R2 per unit 31 Issued to production during May 3 600 units