The following information is provided for Lubners Limited. Consider the information and answer all four questions that follow.

CASE STUDY INFORMATION:

The following information has been extracted from the accounting records of Lubners Limited on 31 December 2020.

	2	020	2019
	Dr	Cr	Dr	Cr
Ordinary share capital		1 728 000		1 728 000
Non-current assets	3 462 964		2910206
inventories	665 856		584 640
Accounts payable		311 328		290 304
Accounts receivable	832 608		800 064
cash	338 688		362 304
Retained earnings ( 1 Jan)				244 276
Long term Loan		932 256		1 090 944
Other Current liabilities		1 057 824		809 568
Total Sales (80% credit sales)		4 816 512		4 535 424
Cost of sales (80% credit purchases)	2 530 656		2 340 288
Interest income		7 776		9 504
taxation	207 009		192 159
Selling and admin expenses	1 141 344		1 069 056
Interest expenses	149 161		174 551
Other expenses	263 808		274 752

REQUIRED:

QUESTION 1 (25) Compile the Statement of Comprehensive Income for the year ended 31 December 2020.

(with 2019 comparative figures)

INFORMATION:

Lubners Limited operates transport division which offers long haul transport. It has a fleet of trucks which are replaced as the maintenance costs become excessive. One of the trucks needs replacing and Lubners Limited is considering the following purchase:

A Volvo F1350 which costs R1 500 000 for the horse and a further R500 000 for a custom made trailer. This truck will have a useful life of five years after which it will be sold for 10% of its total purchase cost.

The first alternative is to use this purchase in normal operations in which customers are charged per kilometre transported and the expected net cash revenue in the first year is expected to be R460 000 and this is expected to increase by 10% every year.

A second alternative is to use this purchase for a long term contract with an established client. This contract is for a period of five years with annual cash revenues of R580 000 for each of the five years.

It is company policy to depreciate vehicles over its useful life on a straight line basis and the cost of capital used to evaluate capital projects is 12%. Internal rate of return is not used in evaluating capital projects.

Question - Compile the Statement of Comprehensive Income for the year ended 31 December 2020.

(with 2019 comparative figures)

Compile the atement of Financial Position as at 31 December 2020.

(with 2019 comparative figures)