The financial statements of Builders plc (BUP) for the year that has just ended are as follows:

Income statement for Year 2022 £000

Credit sales revenue 800

Cost of sales (600)

Gross profit 200

Selling expenses (80)

Distribution expenses (20)

Other expenses (20)

Profit before taxation 80

Tax (25%) (20)

Profit for the year 60

Statement of financial position as at the end of Year 2022 £000

ASSETS

Non-current assets 160

Current assets

Inventories 320

Trade receivables 200

Cash 20

540

Total assets 700

EQUITY AND LIABILITIES

Equity

Share capital – 25p ordinary shares 60

Retained earnings 380

440

Current liabilities

Trade payables 240

Tax due 20

260

Total equity and liabilities 700

A dividend of 50% of the profit t for the year was proposed and paid during

The following information is relevant for Year 2022:

Sales revenue is expected to be 10 per cent higher than in Year 2022

The non-current assets of the business are currently operating at full capacity.

The tax rate will be the same as in 2019 and 50% of the tax due will be outstanding at the year end.

The business intends to maintain the same dividend policy as for 2022

Half of the tax relating to Year 2023 will be outstanding at the year end. Tax due at the end of Year 2020 will be paid during Year 2023.

Any financing gap will be filled by an issue of long-term loan notes.

Required:

Giving examples, describe projected financial statements relevant to you as finance manager

Prepare a projected income statement and statement of financial position for the year 2023 using the per-cent-of-sales method (assuming that Year 2022 provides a useful guide to past experience).