QUESTION $2$

$(20$ Marks$)$

REQUIRED

Use the information given below to prepare the Pro Forma Statement of Comprehensive Income for the period $01$ February to $30$ April $2025.$

INFORMATION

Kia Traders

Pro Forma Statement of Comprehensive Income for the month ended $31$ January $2025$

R

Sales

$1000000$

Cost of sales

$(600000)$

Gross profit

$400000$

Other operating income

$6000$

Rent income

$6000$

$406000$

Operating expenses

$(258000)$

Salaries

$120000$

Stationery

$8000$

Advertising

$12000$

Bad debts

$4000$

Insurance

$10000$

Depreciation

$8000$

Other operating expenses

$96000$

Operating profit

$148000$

Interest income $($on fixed deposit$)$

$400$

Interest expense

$(1200)$

Net profit

$147200$

Additional information

$1.$

Fifty percent $(50\%)$ of the sales each month is expected to be for cash and the balance on credit. Sales for February to April $2025$ have been forecasted as follows:

February

$20\%$ less than the January sales

March

R$1200000$

April

$20\%$ more than the March sales

$2.$

The gross margin ratio for January $2025$ will be maintained during February and March $2025$ but is expected to be $5$ percentage points higher for April $2025.$

$3.$

Rent income increases by $10\%$ on $01$ February each year.

$4.$

Employees are entitled to an increase of $10\%$ in salaries with effect from $01$ March $2025.$ Employees will also receive a bonus equal to $90\%$ of their last monthly salary during April $2025.($Bonus is part of the salary expense.$)$

$5.$

Advertising will be maintained at the existing percentage on sales.

$6.$

Bad debts are calculated at $5\%$ of the credit sales of the previous month.

$7.$

Depreciation is calculated at $20\%$ on cost for all depreciable assets. A vehicle with a cost price of R$240000$ will be purchased on $01$ April $2025.$ Additional insurance of R$19200$ per year will be required for the new vehicle.

$8.$

The fixed deposit matures on $31$ March $2025.$

$9.$

A repayment of R$24000$ will be made towards the loan on $01$ April $2025.$ Interest is levied at $15\%$ per annum.

$10.$

Stationery purchases are expected to remain the same for February $2025$ but will decline by $10\%$ each month from March $2025.$

$11.$

Other operating expenses are expected to increase by $5\%$ per month from February $2025.$