INFORMATION Use the information provided to prepare the following for Midas Enterprises: 1.1 Budgeted Statement of Compr

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INFORMATION
Use the information provided to prepare the following for Midas Enterprises:
1.1 Budgeted Statement of Comprehensive Income for the year ended 31 December 2022. (8 marks)
1.2 Budgeted Statement of Financial Position as at 31 December 2022. (12 marks)
The following statement of comprehensive income for the financial year ended 31 December 2021 and the statement of financial position as at 31 December 2021 have been provided by Midas Enterprises:
Statement of comprehensive income for the year ended 31 December 2021
Sales 10 000 000
Cost of sales (5 750 000)
Gross profit 4 250 000
Variable selling and administrative expenses (1 500 000)
Fixed selling and administrative expenses (500 000)
Net profit 2 250 000
Statement of financial position as at 31 December 2021
ASSETS
Non-current assets 800 000
Property, plant and equipment 800 000
Current assets 3 400 000
Inventories 1 600 000
Accounts receivable 600 000
Cash 1 200 000
TOTAL 4 200 000
EQUITY AND LIABILITIES
Equity 3 760 000
Current liabilities 440 000
Accounts payable 440 000
TOTAL 4 200 000
Additional information:
1. The sales budget for 2022 is as follows:
First quarter R2 625 000
Second quarter R2 750 000
Third quarter R2 875 000
Fourth quarter R2 750 000
2. 90% of the sales is collected in the quarter of the sale and 10% in the quarter following the sale.
3. The gross margin ratio for 2022 is expected to be the same as for 2021.
4. Inventory is purchased in the quarter of the expected sale. Eighty (80%) of inventory purchases is paid for in the quarter of purchase and twenty percent (20%) is paid for in the quarter following the purchase.
5. The inventories balance at the end of each quarter is expected to be the same as the end of the last quarter of 2021 viz. R1 600 000.
6. Variable selling and administrative expenses will vary in the same ratio to sales as for 2021.
7. Fixed selling and administrative expenses will be the same as for 2021 and will include annual depreciation of R160 000 on property, plant and equipment.
8. On 31 December 2022 an old vehicle with a cost price of R180 000 and accumulated depreciation of R150 000 will be traded-in for new vehicle. The new vehicle will cost R400 000 and the trade-in value of the old vehicle is expected to be R50 000.
9. The proprietor’s drawings for 2022 are estimated to be R1 527 000.
10. The cash balance must be calculated (balancing figure).
Question 1
QUESTION 1
(20 MARKS)
1.1
MIDAS ENTERPRISES
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2022
Workings (if any)
R
Sales
Cost of sales
Gross profit
Variable selling and administrative expenses
Fixed selling and administrative expenses
Net profit
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022
Workings (if any)
R
ASSETS
Non-current assets
Property, plant and equipment
Current assets
Inventories
Accounts receivable
Cash
EQUITY AND LIABILITIES
Equity
Current liabilities
Accounts payable