Sprat Morrison plc has provided the following data for the year $2022$ :

DETAILS Dr Cr

Office Supplies $40,000$

Wages and Salaries $210,000$

Utilities $65,000$

Insurance $80,000$

Share Premium $40,000$

General Reserves $120,000$

Debenture Interest $40,000$

Loan Interest $55,000$

Retained Earning at January $1,202260,000$

Management Fees $80,000$

Directors Fees $110,000$

$10\%$ Preference Shares @ $2.400,000$

Ordinary Share Capital @ $$0\mathrm{.}50800,000$

$10\%$ Debenture $550,000$

$10\%$ Loan $800,000$

Property Plant and Equipment $1,800,000$

Motor Vehicle $800,000$

Prov for Depreciation PPE $210,000$

Prov for Depreciation Motor Vehicle $68,000$

Debtors $120,200$

Creditors $155,500$

Commission Income $80,000$

Rent Income $120,000$

Goodwill $400,000$

Bank $65700$

Cash $95500$

Interim Ordinary Shares Premium $2000$

Interim Preference Shares Dividends $10,000$

Stock at December $31.2022580,000$

Sales Turnover $2,000,000$

Cost of Sales $861,500$

$5,409,2005,409,200$

The following additional information was also available :

$1.$ Wages is owing by $$40,000$ while insurance is prepaid by $$25,000$

$2.$ The commission income is prepaid by $$20,000$ while the rent income of $$30,000$ is owing

$3.$ Provide for depreciation as follows : Property Plant and Equipment $10\%$ on the straight line; motor vehicle $5\%$ on the reducing balance.

$4.$ Transfer $$40,000$ for the profits to the general reserves

$5.$ Corporation tax is estimated to be $$50,000$

$6.$ The directors have approved the following : the settlement of the preference share dividends; a new issue of $600,000$ ordinary shares for which $$480,000$ was received by cheque from the broker. No further ordinary shares dividends was declared.

$7.$ The Expenses should be appropriated as follows

Expense Admin S & D

Office Supplies $50\%50\%$

Wages and Salaries $70\%30\%$

Utilities $80\%20\%$

Insurance $40\%60\%$

Management Fees $80\%20\%$

Directors Fees $50\%50\%$

Depreciation $60\%40\%$

$8.$ Write off $25\%$ of the goodwill

Required

$1.$ Prepare the Statement of Profit and Loss and the Statement of Change in Equity for the year ending December $31,2022$; as well as the Statement of Financial Position as at December $31,2022(70$ marks$)$

$2.$ Explain five factors that may influence a company$$s decision to pay dividends. $(10$ marks $)$

$3.$ Explain four non cash dividends options that a company may pursue $(10$ marks $)$

$4.$ A company may leverage its financing by way of grants and subsidies. Briefly explain $($a$)$ grants; and $($b$)$ subsidies. Give two appropriate examples for each term

$(10$ marks $)$