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QUESTION 1 Prepare the following pro forma statements: 1 . 1 Statement of Comprehensive Income for the year ended 3 1 December 2 0 2
QUESTION Prepare the following pro forma statements: Statement of Comprehensive Income for the year ended December using the percentageofsales method. Statement of Financial Position as of December Answer All questions. fos sersit Read the following case study and answer the questions: FINANCIAL PROJECTIONS AND CAPITAL EXPENDTTURE OF ELSIES LIMITED Cleses limited is s nationally recognised supplier of catering equipment. It offers sate and secure shopping via is ontire store and its stateofthe art premises in each of the provinces of South Africa. The company ofters a wide selection of catering equpment and supplies at competifive prices. The target market includes restaurants, hotels, hostels and scaza shops. Their products carry an industryleading warranty that is backed by good aftersales service and availabiny of speres The company was established in with an authorised share capital of ordinary shares of which? were issued at each at the initial public offering in The friancial manager and her team were in the process of forecasting the financial performance for and financial position of the company as of December The starting point was the following figures that were obtained from The financlat statements for the year ended December : The saies amounted to R and the cost price of the goods sold was R Operating expenses totaled R whilst the company lax amounted to R The carrying value of the fixed assets was R whilst the inventones, trade debtors and cash reflected values of R and R respectively. The ordinary share capital balance remained unchanged since the establishment of the company in whilst the undistribuled profits of the company accumulated to R An amount of R was owed to Jip Bank for a iongterm ioan. The amount owed to trade creditors was R and the company tax payable to SARS was R The Totiowing predictions were made for the financial year ended December : Sales are expecled to increase by Seventyfive percent of the total sales is estimated to be on credit. Company tax will be calculated at of the pretax profit and of this amount is expected to be unpaid on December A final dividend of R is expected to be declared on December and is payable during The unsold shares are expected to be issued on March at R each. The amount owed by trade debtors will be based on a collection period of days. The company's closing inventory and the amount owed to trade Gredtors are erpected to change directly with the change in sales in A new machine with a cost price of R will be purchased during January Depreciation for included in the operating expenses is expected to amount is R R will be paid to Jip Bark during and this amount includes R for interest. The cash balance must be calculated balancing figure Elsies Uinited is considering the purchase of a machine fo manufacture some of the spare parts for the catering equipment during The company desires a minimum required rate of return of The machine will cost R plus R for installation and is predicted to have a useftill life of five years. A salvage value of B is estimated. The maching is expected to generate cash inflows of R per year but will requre the employment of two new machine operators at R per year for each operator, and it will require maintenance and repairs averaging R per year. Depreciation will be calculated using the straightline method.
QUESTION
Prepare the following pro forma statements:
Statement of Comprehensive Income for the year ended December using the percentageofsales method.
Statement of Financial Position as of December
Answer All questions.
fos sersit
Read the following case study and answer the questions:
FINANCIAL PROJECTIONS AND CAPITAL EXPENDTTURE OF ELSIES LIMITED
Cleses limited is s nationally recognised supplier of catering equipment. It offers sate and secure shopping via is ontire store and its stateofthe art premises in each of the provinces of South Africa. The company ofters a wide selection of catering equpment and supplies at competifive prices. The target market includes restaurants, hotels, hostels and scaza shops. Their products carry an industryleading warranty that is backed by good aftersales service and availabiny of speres The company was established in with an authorised share capital of ordinary shares of which? were issued at each at the initial public offering in
The friancial manager and her team were in the process of forecasting the financial performance for and financial position of the company as of December The starting point was the following figures that were obtained from The financlat statements for the year ended December :
The saies amounted to R and the cost price of the goods sold was R Operating expenses totaled R whilst the company lax amounted to R The carrying value of the fixed assets was R whilst the inventones, trade debtors and cash reflected values of R and R respectively. The ordinary share capital balance remained unchanged since the establishment of the company in whilst the undistribuled profits of the company accumulated to R An amount of R was owed to Jip Bank for a iongterm ioan. The amount owed to trade creditors was R and the company tax payable to SARS was R
The Totiowing predictions were made for the financial year ended December :
Sales are expecled to increase by Seventyfive percent of the total sales is estimated to be on credit. Company tax will be calculated at of the pretax profit and of this amount is expected to be unpaid on December A final dividend of R is expected to be declared on December and is payable during The unsold shares are expected to be issued on March at R each. The amount owed by trade debtors will be based on a collection period of days. The company's closing inventory and the amount owed to trade Gredtors are erpected to change directly with the change in sales in A new machine with a cost price of R will be purchased during January Depreciation for included in the operating expenses is expected to amount is R R will be paid to Jip Bark during and this amount includes R for interest. The cash balance must be calculated balancing figure
Elsies Uinited is considering the purchase of a machine fo manufacture some of the spare parts for the catering equipment during The company desires a minimum required rate of return of The machine will cost R plus R for installation and is predicted to have a useftill life of five years. A salvage value of B is estimated. The maching is expected to generate cash inflows of R per year but will requre the employment of two new machine operators at R per year for each operator, and it will require maintenance and repairs averaging R per year. Depreciation will be calculated using the straightline method.
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