QUESTION 2 (20 Ma IIU Iuluwiriy adjusunents stII need to be taken into account in the preparation of the financial statements: 1. Only 10 months' rent was received and included in the trial balance above 2. Stationery unused on 31 December 2022 was valued at R200 3. Commission amounting to R1600 was received in advance 4. An additional amount of R400 must be written off as irrecoverable due to a debtor being declared insolvent The following adjustments still need to be taken into account in the preparation of the financial statements: 1. Only 10 months' rent was received and included in the trial balance above 2. Stationery unused on 31 December 2022 was valued at R200 3. Commission amounting to R1600 was received in advance 4. An additional amount of R400 must be written off as irrecoverable due to a debtor being declared insolvent 5. An amount of R12 500 must be raised as a provision for doubtful debts 6. Depreciation on machinery that cost R200 000 has been correctly calculated for the year as R50 000. No entries have been processed for this amount as yet 7. The January invoice for water and electricity of R550 has still not been paid. 8. Interest expense on bank loans is calculated at 15% per annum. The loan was received on 31 December 2018 for an amount of R10 000. The interest was paid monthly. The capital repayment is only due on 31 December 2022. 2.1 Prepare the Statement of Comprehensive Income (Profit or Loss Statement) for the year ended 31 December 2022. (Show all workings (where necessary) and present the answer in the correct and legible format) (10 marks) 2.2 Indicate the balance (amount) for each of the following accounts as they would appear in the Statement of Financial Position) as at 31 December 2022. (Show ALL calculations performed to arrive at your final answer) 2.2.1 Debtors (2 2.2.2 Stationery on hand marks) 2.2.3 Accrued income (2 marks) 2.2.4 Machinery (2 marks) (2 marks) 2.2.5 Accrued expenses (1 marks) 2.2.6 Income received in advance (1 marks) QUESTION 3 (20 Marks) Statement of Financial Position as at 31 December 2022 John \& Sons Spencer's R'000 R000 Fixed Assets Buildings Equipment Current assets Inventory Debtors Bank \begin{tabular}{rr} 120 & 200 \\ 50 & 100 \\ \hline 170 & 300 \end{tabular} Net current asset Fixed assets plus net current assets Loans (@10\%) Net asset \begin{tabular}{rr} 530 & 500 \\ 200 & 70 \\ \hline 330 & 430 \\ & \\ 230 & \\ 100 & 180 \\ \hline 330 & 250 \\ \hline \end{tabular} Required Calculate and briefly report on the ratios for the two companies above: 1. Current ratio (2 marks) 2. Acid test ratio (2 marks) 3. Debtors collection period (in days) (2 marks) 4. Creditors payment period - (Use the cost of sales figure) (2 marks) 5. Stock turnover (2 marks) 6. Return on equity (ROCE) (2 marks) 7. Asset turnover (Total assets) (2 marks) 8. Which company would you prefer to invest in, and give a reason? (6 marks) QUESTION 4 (20 MA Halmart manufactures two oroducts - Product A and Product B. The following details relate to the two products. A firm is considering two capital projects: Project Zeta and Project Omega. The firm's required rate of retum is 12 percent. Projects Required a) Compute the Net Present Value (NPV) for i. Project Zeta (4 marks) ii. Project Omega (4 marks) b) Which project should be purchased if the projects are mutually exclusive? Explain why. (4 marks) c) What are the advantages and disadvantages of using NPV as a capital appraisal technique (8 marks)