QUESTION 6 20 Marks) INFORMATION You are the loan applications assistant at ABSA Bank. Amcs Ltd has applied for a loan of R200 000 and has provided the information below to support their application. Your duties involve preparing a submission to the loan approval manager in which you provide a financial analysis of the financial statements of loan applicant. Amco Lid has been operating for 10 years and for the year ended 31 December 2019 achieved total sales of Rs 200 000 al of which were on credit Amco Lod stained a gross proft percentage of 30%. Operating expenses for this period amounted to R890 000 and the interest paid on lisbles was R240 000. Taxation is payable at 28%. The company has 1 milion ordinary share issued at R1 each and this remained unchanged in the 2019 financial year. Retained income on 31 December 2018 amounted to R322 400. The company had long term loans on 1 January 2019 totaling R1 300 000. During the 2019 fnancial year, R100 000 capital was repaid on these long term loans. The company had non-cument assets totalling R3 100 000 on 31 December 2019. On 31 December 2019 accounts payable amounted to R880 000 and other cument liabilities totalled R740 000. The company had a favourable bank balance at year end amourng to R250 000 The value of inventory on 31 December 2019 amounted to R$20 000 and debtors at year end istalled R820 000. Abse will charge interest at 12% per annum if the loan is granted Some of the industry averages for the sector in which Amco Ltd operates are as follows: Gross proft % -25% Current ratio - 3:1 Acid test ratio - 1.2:1 Interest cover -4 times Debt to assebe -70% Debt to equity -60% Retum on equity - 22% REQUIRED Use the information provided above to: 6.1 Compile the Statement of Comprehensive Income for the year ended 31 December 2019 15 marks) 6.2 Compile the Statement of Financial Position on 31 December 2019 15 marks) 6.3 Calculate three relevant retios to determine the bank should approve the loan of R800 000 t Amco Lid. Assume interest on existing debt will remain unchanged. Provide a recommendation to the loan approval manager. [10 marks)