PROJECTED STATEMENT OF FINANCIAL POSITION AS AT 31 OCTOBER 2019
	R
ASSETS
Non-Current assets	1 200 000
Fixed /Tangible assets	1 200 000
Current Assets	700 000
Inventories	500 000
Trade and other receivables	150 000
Cash and cash equivalents	50 000
Total assets	1 900 000
EQUITY AND LIABILITIES
Shareholders equity	640 000
Ordinary share capital	400 000
Retained earnings	240 000
Non- current liabilities	280 000
Long-term loan	280 000
Current Liabilities	980 000
Trade and other payables	980 000
Total equity and liabilities	1900 000

Forecasts, assumptions and additional information for the financial year ending 31 October 2020

• Projected sales are R2 400 000 as compared to the estimated R1 800 000 for the financial year ended 31 October 2019.
• Manufacturing labour will drop to 22% of sales.
• The cost of materials will increase to 16% of sales.
• Overhead costs will rise by 5% over the previous financial year, and additional variable costs will be incurred at a rate of 10% of the incremental sales value.
• New equipment costing R500 000 will be purchased during February 2020, Total depreciation for the year ended 31 October 2020 is estimated at R180 000.
• Selling expenses will rise by R220 000.
• General and administrative expenses as a percentage of sales will be unchanged for the year ended 31 October 2020.
• Interest expense is estimated to be 3% of sales
• Income taxes are estimated at 30% of the pre-tax profits.
• The business maintains a cash balance of R60 000.
• Inventory represents 25% of sales
• Trade and other receivables represent 20% of sales
• Trade and other payables represent 10% of sales
• 60 000 ordinary shares are expected to be issued at R4 each during January 2020
• Dividends of R100 000 are expected to be paid
• Loan repayments totalling R50 000 are expected to be made during the financial year ended 31 October 2020.
• The amount of long-term debt required must be calculated.

QUESTION 2 REQUIRED Use the information given below to prepare the following: 2.1 Projected Income Statement for the year ended 31 October 2020. 2.2 Projected Statement of Financial Position as at 31 October 2020. one of its projects for the 12 mon financial position at the year INFORMATION Stanwick Ltd, a manufacturing concern, is making financial plans for one of its proier commencing 01 November 2019. The estimates of the operating results and financial end 31 October 2019 are shown in the statements below: PROJECTED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 OCTOBER 18000 (1 140 000 450 000 260.000 370000 60 000 660.000 Sales Cost of sales Labour Materials Overheads Depreciation Gross profit Operating expenses Selling expenses General and administrative expenses Operating profit Interest expense Profit before tax Income tax Profit after tax 300000 138000 162.000 360000 14000 32000 (9620 22400