Answer Happy

The following statement of comprehensive income for thefinancial year ended 31 December 2021 and the statement offinancial position as at 31 December 2021 have been provided byMidas Enterprises: Statement of comprehensive income for the yearended 31 December 2021 R 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) Netprofit 2 250 000 Statement of financial position as at 31 December2021 R ASSETS Non-current assets 800 000 Property, plant andequipment 800 000 Current assets 3 400 000 Inventories 1 600 000Accounts receivable 600 000 Cash 1 200 000 4 200 000 EQUITY ANDLIABILITIES Equity 3 760 000 Current liabilities 440 000 Accountspayable 440 000 4 200 000 Additional information: 1. The salesbudget for 2022 is as follows: First quarter R2 625 000 Secondquarter R2 750 000 Third quarter R2 875 000 Fourth quarter R2 750000 2. 90% of the sales is collected in the quarter of the sale and10% in the quarter following the sale. 3. The gross margin ratiofor 2022 is expected to be the same as for 2021. 4. Inventory ispurchased in the quarter of the expected sale. Eighty (80%) ofinventory purchases is paid for in the quarter of purchase andtwenty percent (20%) is paid for in the quarter following thepurchase. 5. The inventories balance at the end of each quarter isexpected to be the same as the end of the last quarter of 2021 viz.R1 600 000. 6. Variable selling and administrative expenses willvary in the same ratio to sales as for 2021. 7. Fixed selling andadministrative expenses will be the same as for 2021 and willinclude annual depreciation of R160 000 on property, plant andequipment. 8. On 31 December 2022 an old vehicle with a cost priceof R180 000 and accumulated depreciation of R150 000 will betraded-in for new vehicle. The new vehicle will cost R400 000 andthe 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). Use theinformation provided above to prepare the following for MidasEnterprises: 1.1 Budgeted Statement of Comprehensive Income for theyear ended 31 December 2022. (8 marks) 1.2 Budgeted Statement ofFinancial Position as at 31 December 2022. (12 marks)