Question

Profiteer ltd reported retained earnings of r100000 and r80000 in therir statement of financial positionn for the years 2011 and 2010 respectively theb firms only debt capital is in the form of long term debentures with a face value of r200000 and an annual coupon of 6%

Answer 1

The profit-after-tax is R70,000

The profit before tax R100,000

The operating profit is R112,000

What is profit after-tax?

It is the profit before tax deduction of ordinary and preferred dividends, bearing in  mind that the profit after-tax is the sum of all dividends paid and the change, increase in retained earnings in this case as well as the share of non-controlling interest in the profits of the company

profit-after-tax=ordinary dividends+ preferred dividends+ increase in retained earnings+ profits to non-controlling interest

ordinary dividends=R30000

preferred dividends=R5000

increase in retained earnings=R100000-R80000

increase in retained earnings=R20,000

profits to non-controlling interest=R15000

profit-after-tax=R30000+R5000+R20,000+R15000

profit-after-tax=R70,000

profit after-tax=profit before tax*(1-tax rate)

tax rate=305

R70,000=profit before tax*(1-30%)

profit before tax=R70,000/(1-30%)

profit before tax=R100,000

profit before tax=operating profit-interest

operating profit=unknown'

interest=R200000*6%

interest=R12,000

R100,000=operating profit-R12,000

operating profit=R100,000+R12,000

operating profit=R112,000

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Full question with all missing parts:

profiteer Ltd reported retained earnings of R100000 and R80000 in their statement of financial position for the years 2011 and 2010 respectively. The firm's only debt capital is in the form of long-term debentures with a face value of R100000 and an annual coupon rate of 6%.The firm reported an ordinary share dividend of R30000, preference share dividend of R5000 and non-controlling interest of R15000 in their 2011 Statement of Comprehensive Income, the effective tax rate amounts to 30%. based on this information, you are required to indicate what the values of the following items were in the 2011 statement of comprehensive income: Operating profit, profit after tax, profit before tax.