REQUIRED: Projected Statement of Financial Position

As of December 31, 2020, there are two long-term loans. Both have an annual interest rate of 7%.

A.The first loan will mature on June 30, 2020 and the remaining principal balance to be paid on June 30, 2020 is 400,000.

B.The second loan which was incurred on December 31, 2020 worth 1,350,000 is paid at the rate of 225,000 principal balance every June 30 and December 31.

New loans of 1,500,000 will be incurred on December 31, 2021 payable at the rate of 250,000 every June 30 and December 31. Annual interest rate is expected at 7%

• For January 2021, 500,000 new PPE will be acquired. It is the policy of the company that PPE acquired in the first half of the year will be depreciated for one full year.
• As of December 31, 2020, the gross balance of Property, Plant, and Equipment (PPE) is 1,200,000.

Depreciation expense is 5% of the gross beginning balance of property, plant and equipment.

Capital Stock remain unchanged

Retained Earnings - arrived at by adding projected net income to beginning retained earnings then deducting dividends to be declared during the year.

Cash dividends of 110,000 will be paid for 2021