Sentra Limited is a public company whose headquarters is in Johannesburg, South Africa. It is a manufacturer of automotive products, with a promise to its customers of high quality at affordable prices. It commenced operations on $02$ January $2022$ with authorised share capital of $600000$ ordinary shares of which $400000$ have been issued at R$10$ per share.

At the end of $2022$ the fixed assets $($at carrying value$)$ totalled R$2000000,$ inventories amounted to R$1280000,$ R$2000000$ was owed by trade debtors, cash in the bank amounted to R$320000,$ the accumulated undistributed profits amounted to R$400000$ and R$1200000$ was owed to the trade creditors. The sales of Sentra Limited for $2022$ amounted to R$8000000.$

The following projections and proposals were made for $2023$:

The sales revenue is expected to increase to R$10000000.$ The after$-$tax return on sales is estimated at $20\%.$ The directors are expected to propose dividends of $200$ cents per share at the end of the year $($payable during $2024).$ A vehicle with a cost price of R$300000,$ which was damaged in an accident during December $2022$ and subsequently repaired, is expected to be traded in at a loss of R$20000$ during the last quarter of $2023$ for a new vehicle with a cost price of R$350000.$ The accumulated depreciation of the previously damaged vehicle on the date of the trade$-$in is expected to be R$80000.$ Depreciation for the year is estimated at R$300000.50000$ ordinary shares are expected to be issued during March $2023$ at R$15$ per share. Inventories, accounts receivable and accounts payable are to be calculated using the percentage$-$of$-$sales method. The amount of cash and cash equivalents must be determined $($balancing figure$).$

Sentra Limited has identified a new machine that it is considering for purchase during $2024.$ The machine would cost R$1000000,$ excluding installation costs of R$200000.$ The machine is expected to have a useful life of five years and depreciation per year is estimated at R$220000.$ It is expected that the new machine would generate cash receipts of R$540000$ per year and its annual cash outflows would total R$220000.$ At the end of year $3,$ the machine would require a major overhaul costing R$200000$ cash $($not included in the figures above$).$ A scrap value of R$100000($not included in the figures above$)$ is anticipated. The cost of capital is $15\%.$

Question $1$:

Prepare the Pro Forma Statement of Financial Position as at $31$ December $2023.($Ignore the investment opportunity $15$ marks

Notes:

Fixed assets: The changes $($trade$-$in$,$ purchase and depreciation$)$ must be used to adjust the carrying value of $2022.$ Show only one entry $($i$.$e$.$ the carrying value of the fixed assets at the end of the year$).$ Show the workings in brackets next to the detail. Inventories, Accounts receivable and Accounts payable: Apply the percentage$-$of$-$sales of $2022$ to the $2023$ sales. Cash: will reflect the amount that will enable the assets to equal the equity and liabilities. This is the last figure to enter in the statement. Ordinary share capital: Two issues of shares must be included. Retained earnings: The balance will change because of the net profit and dividends. Dividends payable was omitted by most students. All the issued shares qualify for the dividend.

Be advised to use the right format of the statement which must include all the headings and sub$-$headings.