QUESTION 1 Read the information below and answer the following questions INFORMATION The following statement of comprehensive income for the financial year ended 31 December 2021 and the statement of financial position as at 31 December 2021 have been provided by Midas Enterprises: Statement of comprehensive income for the year ended 31 December 2021 Sales Cost of sales Gross profit Variable selling and administrative expenses Fixed selling and administrative expenses Net profit Statement of financial position as at 31 December 2021 ASSETS Non-current assets Property, plant and equipment Current assets Inventories Accounts receivable Cash EQUITY AND LIABILITIES Equity Current liabilities Accounts payable R 10 000 000 (5 750 000) 4 250 000 (1 500 000) (500 000) 2 250 000 R 800 000 800 000 3 400 000 1 600 000 600 000 1 200 000 4 200 000 3 760 000 440 000 440 000 4 200 000 Additional information: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 1.1 The sales budget for 2022 is as follows: 1.2 First quarter Second quarter Third quarter Fourth quarter 90% of the sales is collected in the quarter of the sale and 10% in the quarter following the sale. Variable selling and administrative expenses will vary in the same ratio to sales as for 2021. R2 625 000 The gross margin ratio for 2022 is expected to be the same as for 2021. Inventory is purchased in the quarter of the expected sale. Eighty (80%) of inventory purchases is paid for in the quarter of purchase and twenty percent (20%) is paid for in the quarter following the purchase. R2 750 000 The inventories balance at the end of each quarter is expected to be the same as the end of the last quarter of 2021 viz. R1 600 000. The proprietor's drawings for 2022 are estimated to be R1 527 000. Use the information provided above to prepare the following for Midas Enterprises: Budgeted Statement of Comprehensive Income for the year ended 31 December 2022. Budgeted Statement of Financial Position as at 31 December 2022. R2 875 000 The cash balance must be calculated (balancing figure). R2 750 000 Fixed selling and administrative expenses will be the same as for 2021 and will include annual depreciation of R160 000 on property, plant and equipment. On 31 December 2022 an old vehicle with a cost price of R180 000 and accumulated depreciation of R150 000 will be traded-in for new vehicle. The new vehicle will cost R400 000 and the trade-in value of the old vehicle is expected to be R50 000. (8 marks) (12 marks)