MAC3702
Assignment 2 (COMPLETE
ANSWERS) Semester 2 2024 -
DUE 12 September 2024
, MAC3702 Assignment 2 Semester 2 2024
QUESTION 1
a) Complete the Table
Forecast Calculation
To complete the table, we need to forecast the revenue, cost of sales, gross profit, other
operating expenses, profit from operations, finance costs, profit before tax, and profit
after tax from 2024 to 2026.
1. Revenue Forecast:
o 2024: R291,200 (Given) o 2025:
R291,200×(1+0.07)=R311,784 o 2026:
R311,784×(1+0.07)=R333,079.68
2. Gross Profit Forecast:
o Gross profit percentage is expected to
decrease in 2024 and then return to
2023 levels. So:
2024 Gross Profit = Revenue ×\times× 2024 Gross Profit Margin
2024 GP Margin =
116,480291,200≈0.4000\frac{116,480}{291,200} \approx
0.4000291,200116,480≈0.4000 (40%)
2024 Gross Profit = R291,200×0.4000=R116,480R291,200
\times 0.4000 = R116,480R291,200×0.4000=R116,480
2025 Gross Profit Margin = 0.4000+0.0500=0.45000.4000 + 0.0500
= 0.45000.4000+0.0500=0.4500 (45%)
2025 Gross Profit = R311,784×0.4500=R140,303R311,784
\times 0.4500 = R140,303R311,784×0.4500=R140,303
2026 Gross Profit Margin = 0.5000 (50%)
2026 Gross Profit =
, R333,079.68×0.5000=R166,539.84R333,079.68 \times
0.5000 = R166,539.84R333,079.68×0.5000=R166,539.84
3. Other Operating Expenses Forecast:
o 2024: R46,000 (Given)
o 2025: R46,000×(1+0.05)=R48,300R46,000 \times (1 + 0.05) =
R48,300R46,000×(1+0.05)=R48,300 o 2026:
R48,300×(1+0.05)=R50,715R48,300 \times (1 + 0.05) =
R50,715R48,300×(1+0.05)=R50,715
4. Profit from Operations:
o Profit from Operations = Gross Profit - Other Operating Expenses -
Depreciation o 2024:
R116,480−R46,000−R23,000=R47,480R116,480 - R46,000 -
R23,000 = R47,480R116,480−R46,000−R23,000=R47,480 o 2025:
R140,303−R48,300−R23,000=R69,003R140,303 - R48,300 -
R23,000 = R69,003R140,303−R48,300−R23,000=R69,003 o 2026:
R166,539.84−R50,715−R23,000=R92,824.84R166,539.84 -
R50,715 - R23,000 =
R92,824.84R166,539.84−R50,715−R23,000=R92,824.84
5. Finance Costs:
o Finance Costs are R24,000 for 2023, and the loan interest will be
10%×R100,000=R10,00010\% \times R100,000 =
R10,00010%×R100,000=R10,000 for 2024. The remaining balance after
2024 is R100,000−R10,000=R90,000R100,000 - R10,000 =
R90,000R100,000−R10,000=R90,000, so:
2024: R10,000
2025: R10,000 (as the loan principal is repaid in 2025, there will be
no finance costs in 2026)
6. Profit Before Tax:
o Profit Before Tax = Profit from Operations - Finance Costs o
2024: R47,480−R10,000=R37,480R47,480 - R10,000 =
