QUESTION ONE REQUIRED Use the information provided below to prepare the 1.1 Pro Forma Statement of Comprehensive Income for the year ended 31 December 2021 1.2 Pro Forma Statement of Financial Position as at 31 December 2021. (Note: except where otherwise stated, the percentage of sales method is not required) (14 mars INFORMATION TRANSCO LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020 Sales Cost of sales Gross profit Operating expenses (including depreciation) Operating profit Interest on loans Profit before tax Income tax (28%) Profit after tax R 7 125 000 (4 275 000 2850 000 (1 521 000) 1329 000 (116 500) 1 212 500 (339 500) 873 000 QUESTION ONE REQUIRED Use the information provided below to prepare the 1.1 Pro Forma Statement of Comprehensive Income for the year ended 31 December 2021. (6 marks) 1.2 Pro Forma Statement of Financial Position as at 31 December 2021. (Note: except where otherwise stated, the percentage of sales method is not required) (14 marks) INFORMATION TRANSCO LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020 R Sales 7 125 000 Cost of sales (4 275 000) Gross profit 2 850 000 Operating expenses (including depreciation) (1 521 000) Operating profit 1 329 000 Interest on loans (116 500 Profit before tax 1 212 500 Income tax (28%) (339 500) Profit after tax 873 000 TRANSCO LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020 R ASSETS Non-current assets Fixed Assets 2 667 000 2 667 000 Current assets Inventories Trade and other receivables Cash and cash equivalents Total assets 1 876 850 641 250 997 500 238 100 4 543 850 EQUITY AND LIABILITIES Shareholders' equity Ordinary share captal 700 000 shares) Retained earnings 2 445 600 700 000 1 745 600 975 000 975 000 Non-current liabilities Long term loan Current liabilities Trade and other payables Income tax payable Total equity and liabilities 1 123 250 783 750 339 500 4 543 850 Additional information 1. Sales for the year ending 31 December 2021 is expected to increase by 12% 2. The existing gross profit percentage will be maintained in 2021. 3. Operating expenses are expected to increase by 6% in 2021. 4. 200 000 ordinary shares wil be issued in 2021 at a value of R1 each. 5. The company will purchase a property costing R400 000 on 1 March 2021. A long term loan will be taken out to fund the purchase. It is expected that interest will be paid at a rate of 12% on this loan. Monthly loan instalments of R16 000 will be paid on this loan beginning on 30 March 2021. 6. Total depreciation for the year ending 31 December 2021 is expected to amount to R310 000 7. Percentage of sales must be used for the folowing items: a Inventories Trade and other receivables c. Trade and other payables 10% of the current long term loan will be repaid during 2021. Interest on this loan for 2021 wil amount to R97 000. Dividends of R120 000 will be declared and paid by December 2021. 10. Income tax payable is 28% of the tax determined in the Pro Forma Statement of Comprehensive Income. 11. The amount of cash and cash equivalents must be determined (balancing figure) END OF PAPER 8. 9