This refers to the projected balance sheet at the end of forecasting period. The items in the proforma balance which vary with sales would be determined in any of the following two ways:

 i) % of sales x sales at last year of forecasting (2004); or

ii) Balance sheet item before forecasting plus increase in balance sheet item as a result of increase in sales.

 Proforma balance sheet as at 31st December 2004

Net fixed assets 60% x 632.5 or 300 + 79.5 Current Assets 20% x 632.5 or 100 + 26.5   Ordinary shares (will remain constant) Retained earning 70 + 13.8 + 15.18 10% debenture (remain constant) Trade creditor 10% x 632.5 or 50 + 13.25 Accrued expenses 6% x 632.5 or 30 + 7.95 External borrowing – commercial

Shs. 379.50 126.50 506.00 100.00 98.98 150.00 63.25 37.95 55.82 506.00