SECTION A Answer ALL the questions in this section. QUESTION 1 Use the information provided below to answer the following questions: [100 MARKS] 225 1.1 Is the company solvent? Motivate your answer. 1.2 Calculate the earnings per share (expressed to the nearest cent). (3 marks) (3 marks) 1.3 Comment on the financial result of the company. (2 marks) 1.4 Provide an interpretation of the extract of the cash flow statement. (6 marks) 1.5 From the information provided in all three financial statements, is the company likely to experience financial problems in the future? Motivate your answer by referring to each statement. (6 marks) INFORMATION The following information extracted from the accounting records of Supreme Limited, a company with an issued share capital of 500 000 ordinary shares: Statement of Comprehensive Income for the year ended 31 December 2021 Sales (all credit) Cost of sales Gross profit Operating expenses Operating profit R 5 800 000 (3 700 000) 2 100 000 (1 200 000) 900 000 Interest expense (60 000) 840 000 Profit before tax (235 200) Company tax 604 800 Profit after tax