STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED $31$ DECEMBER $2022$

ADDITIONAL INFORMATION

Depreciation for the year amounted to:

$2022$: R$720000$

$2021$: R$1080000.$

Company tax is calculated as a percentage of the pre$-$tax profit. Answer ALL questions.

QUESTION $1$

$[100$ MARKS$]$

$(20$ Marks$)$

REQUIRED

Study the information provided below and answer the following questions:

$1\mathrm{.}1$ Explain the change that possibly took place during $2022$ in respect of:

$1\mathrm{.}1\mathrm{.}1$ Long$-$term borrowings

$(2$ marks$)$

$1\mathrm{.}1\mathrm{.}2$ Property, plant and equipment.

$(2$ marks$)$

$1\mathrm{.}2$ Calculate the administrative expenses for $2022.$

$(2$ marks$)$

$1\mathrm{.}3$ Was there a change to the company tax rate of Afrox Ltd during $2022?$ Explain.

$(2$ marks$)$

$1\mathrm{.}4$ Critically assess the performance of the company from the information provided without making use of any ratios.

$(8$ marks$)$

$1\mathrm{.}5$ Recommend FOUR $(4)$ ways in which the company can improve its profitability.

$(4$ marks$)$

INFORMATION

The Statement of Comprehensive Income and simplified extract of the Statement of Changes in Equity for Afrox Ltd are provided below:

$\backslash$table$[[$STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED $31$ DECEMBER:$],[],[$Sales$,R,R,],[$Cost of sales,$16200000,14400000,],[$Gross profit,$(7020000),(6120000),],[$Other operating income,$9180000,8280000,],[$Distribution expenses,$540000,504000,],[$Administrative expenses,$(5400000),(4860000),],[$Operating profit,?,?,$],[$Finance income,$2160000,1944000,],[$Finance expenses,$19800,9720,],[$Profit before tax,$(15660),(31680),],[$Company tax,$2164140,1922040,],[$Profit after tax,$(649242),(576612),]]$