QUESTION 1 Balance Sheet for Basil Ltd as at 31 December 2010 (R'000) Assets 2010 2009 Non - current assets at book value 106 000 84 000 Current assets 349 000 298 000 Inventory 200 000 150 000 Accounts receivable (debtors) 120 000 100 000 Bank 29 000 48 000 Total assets 455 000 382 000 Equity 163 000 138 000 Ordinary shares 70 000 70 000 Retained income 93 000 68 000 Non - current liabilities 101 000 101 000 Long-term loan 101 000 101 000 Current liabilities 191 000 143 000 Accounts payable (creditors) 49 000 53 000 Short-term loan 115 000 63 000 Taxation 20 000 20 000 Dividends payable 7000 7 000 Total equity and liabilities 455 000 382 000Income Statement for the years ended 31 December (R'000) 2010 2009 Sales 853 000 743 000 Cost of sales 640 000 550 000 Gross profit 213 000 193 000 Operating expenses 134 000 117 000 Net profit before interest and tax 79 000 76 000 Interest paid 26 000 18 000 Taxation 24 000 22 000 Net profit after tax 29 000 36 000 Dividend 4 000 4 000 Retained income 25 000 32 000