Question

Study the following Pro-Forma Statement of Comprehensive Income of Dhikim Ltd for the
month ending 28 February 2019.

You will be required to use the information provided to:
2.1 Calculate the following for February 2019.
2.1.1 Cost of Sales (1 mark)
2.1.2 Taxation (1 mark)
2.1.3 Profit after Taxation (1 mark)


2.2 Prepare the Pro-Forma Statement of Comprehensive Income for the month ending March
2019.

Note: use the format provided for February 2019
Information

Pro-Forma Statement of Comprehensive income of Dhikim Ltd for the month ending 28
February 2019

	R
Sales	400 000
Cost of sales	2.1.1
Gross Profit (25% of sales)	?
Operating Income	50 000
Operating expenses	(120 000)
Operating profit	?
Interest Income	27 000
Interest Expense	(14 000)
Profit before tax	?
Taxation (30%)	2.1.2
Profit after tax	2.1.3

Additional information
- Sales is forecasted to increase by 10% in March 2019
- The Gross Margin for March 2019 remains unchanged from February 2019
- Operating Income and Operating Expenses for March 2019 will vary in proportion to sales
from February 2019 (percentage of sales).
- There was no change to interest receipts and payments for March 2019 from February
2019
- The tax rate remains the same for March 2019

Answer 1

	FEBRUARY.2019	R
a	Sales	400000
b=a-c	Cost of sales	300000	(400000-100000)
c=a*25%	Gross Profit (25% of sales)	100000	(400000*25%)
d	Operating Income	50000
e	Operating expenses	-120000
f=c+d+e	Operating profit	30000	(100000+50000-120000)
g	Interest Income	27000
h	Interest Expense	-14000
i=f+g+h	Profit before tax	43000	(30000+27000-14000)
j=i*30%	Taxation (30%)	12900	(43000*30%)
k=i-j	Profit after tax	30100	(43000-12900)
	MARCH.2019	R
a	Sales	440000	(400000*(1+0.1))
b=a-c	Cost of sales	330000
c=a*25%	Gross Profit (25% of sales)	110000	(440000*25%)
d	Operating Income	55000	(50000*(1+0.1)
e	Operating expenses	-132000	(120000*(1+0.1)
f=c+d+e	Operating profit	33000
g	Interest Income	27000
h	Interest Expense	-14000
i=f+g+h	Profit before tax	46000
j=i*30%	Taxation (30%)	13800	(46000*30%)
k=i-j	Profit after tax	32200	(46000-13800)