. The master budget of Levis Limited for 2020 has largely been completed. All that remains is the preparation of the statement of financial position as at 31 December 2020. The management of Levis Limited is also in the process of identifying investment opportunities for 2021. Two projects have been identified and your assistance is required in undertaking capital investment appraisal. R1 100 000 will be paid to Sen Bank during 2020. This includes R400 000 for interest on loan. The amount of external funding (non-current debt) required must be calculated. The Statement of Financial Position of Levis Limited as at 31 December 2019 is as follows: QUESTION 1 (10 Marks) Levis limited Statement of Financial Position as at 31 December 2019 R REQUIRED Use the following information to prepare the Pro Forma Statement of Financial Position of ASSETS 4 000 000 Levis Limited as at 31 December 2020. Where applicable, round off amounts to the nearest Rand. Non-current assets Fixed/Tangible assets Current assets 4 000 000 INFORMATION 5 800 000 Inventories 3 880 000 Accounts receivable 1 600 000 The sales of Levis Limited for 2019 amounted to R6 000 000. The sales for 2020 are expected to increase by R2 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 2020: Cash and cash equivalents 320 000 Total assets 9 9 800 000 EQUITY AND LIABILITIES ID !D001 Shareholders' equity 4 680 000 Ordinary share capital 3 400 000 Gross margin 25% (Net) Profit margin 10% All purchases of inventory are on credit. Purchases for 2020 are projected at R5 000 000. The business expects to show a net increase in cash of R100 000 during 2020. Machinery with a cost price of R800 000 and accumulated depreciation of R800 000 is expected to be scrapped at the end of 2020. Machinery with a cost price of R4 800 000 will be purchased to replace the machinery that will be scrapped. Total depreciation for 2020 is estimated to be R600 000. . 200 000 ordinary shares at R4 each are expected to be sold during January 2020. Dividends of R600 000 are expected to be recommended by the directors at the end of December 2020. The dividends will be paid during 2021. Retained earnings Non-current liabilities 1 280 000 4 400 000 4 400 000 Long-term loan (Sen Bank) Current liabilities 720 000 Accounts payable 720 000 Total equity and liabilities 9 800 000