please assist with question 1
In addition to the above, the following information is available: All sales and purchases of inventory are on credit. Inventories on 31 December 2020 amounted to \\( R 1 \\) 500000 . Credit terms of \\( 5 / 10 \\) not 90 days are granted by creditors. Credit terms of 60 days are granted to debtors. Dividends declared for the years ended 31 December 2021 and 2022 amounted to R1 169.280 and R1 422000 respectively. The financial manager of Orbit Limled provided the following forecasts for 2023 : Sales are estimated at 8000 units with a selling price of R1 800 each. The manufacturing costs include direct materials of R460 per unit, direct labour of R315 per unit, variable overheads of R170 per unit and fixed overheads of R880 0000. Fixed selling and administration costs are estimated at R2.000 000 and the variable selling cosis are estinaled to be \7.5 of sales. The directors are conternplating diversitication in 2024 by entering the passenger transport market. This could be achieved through the purchase of a fleet of midi buses that are expected to cost R9 500 000. An additional R500 000 will be spont on import duties. The cost of operating the buses each year is expected to be R4 100000 and the annual ravenues from transporting the passengers are estimated at R7 000000 . The buses [100 MARKS] FORMATNE ASSESSMENT 1 Read the case study and answer the questions that follow: OREIT LUMITED: FINANCIAL PERFOAMANCE AND FORECASTING The mission of Orbat Limied is to achieve its vision by providing an innovativo product and creative customer axperiences. Ifs talented staff are guided by the vakes, social conscience and customer-centric mindset espoused by the board of drectors. \\( N \\) the core of Orta Limitad is as customarn. The company is oommitied to successfut growth by delvering excellent service to its customers to whorn it oflers quality and value. It is for these reasons that Orbit Limled was able to achieve success in the marketplace. Howover, the management has identifled the need to improve in certain respects. The following are the financial statements for the past Mo yoars: afe expected to have a total salvage value of \\( R 1000000 \\) and the estimated useful life of the buses is five years. The company's cost of capilal is expected to reduce to \15. Depreciation is calculated using the straight-line method. QUESTION 1 (25 Marks) REQUIRED 1.1 Calculate the increase in the retained earnings over the two-year period. (2 marks) 1.2 By how much did the interest income increase or decrease from 2021 to 2022 ? Provide a possible reason for the change. (3 marks) 1.3 Comment on the investing activities of the company. (4 marks) 1.4 Calculate the amount that would be reflected as \"Changes in working capitar' in the Statement of Cash Flows for the year ended 31 December 2022. (4 marks) 1.5 Without making use of any ratios, provide an interpretation of the following over the twoyear period: 1.5.1 Inventories 1.5.2 Accounts receivable (4 marks) (4 marks) 1.6. Calculate the cost (as a percentage) of not accepting discounts from creditors in seltlement of accounts. (4 marks) [100 MARKS] FORMATNE ASSESSMENT 1 Read the case study and answer the questions that follow: OREIT LMMTED; FINANCIAL PERFORMANCE AND FORECASTING The mission of Orbat timbed is to achieve its vision by providing an innovatwo product and creative cusiomer experiences. irs talented staff are guided by the values, social consciance and customet-cantric mindset espoused by the board of droctens. \\( N \\) the core of Ortat Limited is as castomern. The company is comenitied to successfut growth by delvering excollent service to its customers to whom it ofiers quality and value. It is for these reasons that Orbit Limiled was able to achieve success in the marketplace. Howover, the management has identifled the neod to improve in onrtain respects. The following are the financial statements for the past Moyoars
