INFORMATION PREMIER LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2021 R Sales 7 200 000 Cost of sales (5 040 000) Gross profit 2 160 000 Operating expenses (including depreciation) (880 000) Operating profit 1 280 000 Interest on loans (192 500) Profit before tax 1 087 500 Income tax (28%) (304 500) Profit after tax 783 000 PREMIER LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 R ASSETS Non-current assets 4 200 000 Fixed Assets 4 200 000 Current assets 2 880 000 Inventories 1 440 000 Trade and other receivables 1 080 000 Cash and cash equivalents 360 000 Total assets 7 080 000 EQUITY AND LIABILITIES Shareholders equity 3 771 000 Ordinary share capital (1 500 000 shares) 1 500 000 Retained earnings 2 271 000 Non-current liabilities 2 200 000 Long term loan 2 200 000 Current liabilities 1 109 000 Trade and other payables 864 000 Income tax payable 245 000 Total equity and liabilities 7 080 000 Additional information 1. Sales for the year ending 31 December 2022 is expected to increase by 12%. 2. The existing gross profit percentage will be maintained in 2022. 3. Operating expenses (excluding depreciation) are expected to increase by 10% in 2022. 4. 500 000 ordinary shares will be issued in 2022 at a value of R1 each. 5. The company will purchase a property costing R900 000 on 1 June 2022. A long-term loan will be taken out to fund the purchase. Monthly instalments of R7 668 will be payable on this loan. Interest of R43 300 will be paid on this loan for the period 1 June 2022 to 31 December 2022. 6. New plant and equipment costing R420 000 will be purchased for cash during April 2022. 7. Total depreciation for the year ending 31 December 2022 is expected to amount to R462 000. Depreciation for the year ended 31 December 2021 amounted to R420 000. 8. Percentage of sales must be used for the following items: Inventories Trade and other receivables Trade and other payables 9. 10% of the current long-term loan will be repaid during 2022. Interest paid on this loan will amount to R181 500. 10.Dividends of 10 cents per share will be declared in November 2022 and will be paid in March 2023. 11.An income tax rate of 28% will be applicable in 2022. Amounts owing to the South African Revenue Services for balances outstanding on 31 December 2021 will be paid in January 2022. Taxes due for 2022 will be paid in January 2023. 12. Any excess cash will be invested in long-term financial assets. QUESTION 1 [18 MARKS] 1.1 Compile the Pro Forma Statement of Comprehensive Income for the year ended 31 December 2022. (6) 1.2 Compile the Pro Forma Statement of Financial Position as at 31 December 2022. (12) QUESTION 2 (12 Marks) REQUIRED Use the information provided below to prepare the Performance report indicating original budget, actual budget, flexible budget and variances. INFORMATION Robex Ltd manufactures a single product. It originally planned to produce and sell 8 000 units during the year, but the actual activity level was 11 000 units. The budgeted and actual income and costs for the year are as follows: Original Budget Actual results Volume 8 000 units 11 000 units R R Sales 1 280 000 1 815 000 Cost of sales (1 028 000) (1 450 000) Direct Materials 360 000 528 000 Direct labour 304 000 440 000 Variable overheads 144 000 242 000 Fixed overheads 220 000 240 000 Gross Profit 252 000 365 000