In December 20.8, Finch Limited was planning its financial needs for the coming year.

As a first indication, the firms management required a pro forma Statement of Financial Position as at 31 December 20.9 to gauge the financial needs at that time.

Estimated financial condition as at 31 December 20.8 was reflected in this Statement of Financial Position :

ASSETS	R
Non-current assets	451 800
Property, plant and equipment	843 000
Accumulated depreciation	(434 600)
Other non-current assets	43 400
Current assets	2 982 400
Inventories	1 825 400
Accounts receivable	722 400
Cash and cash equivalents	434 600
Total assets	3 434 200
EQUITY AND LIABILITIES
Equity	992 800
Ordinary share capital	624 000
Retained income	368 800
Non-current liabilities	240 000
Mortgage bond	240 000
Current liabilities	2 201 400
Accounts payable	612 300
Other current liabilities	1 589 100
Total equity and liabilities	3 434 200

Additional information

Note : Please show all workings

Operations for the following year were projected using the following working assumptions to plan the financial results:

• Sales (all credit) were forecast at R20 900 000, with a gross margin of 8.2%.

• Purchases (all credit) are expected to total R19 450 000.

• Accounts receivable would be based on a collection period of 12 days, while 24 days accounts payable

  would be outstanding.

• Depreciation is expected to be R62 800 for the year.

• A mortgage loan repayment of R20 000 is expected to be made.

• Other current liabilities will be allowed to fluctuate with seasonal needs.

• Capital expenditures were scheduled at R42 000 for a delivery van and R72 000 for warehouse

  improvements.

• Profit after tax is expected at a level of 0.19% of sales.

• Dividends for the year were scheduled at R25 000.

• Cash balances are desired to be no less than R300 000.