1. Extract from ledger account balances as at 28 February: 20.20 R 251 200 239 100 41 200 121 000 375 100 219 700 74 100 95 000 Share capital: Ordinary shares Share capital: Preference shares Retained earnings Long-term loan - ABC Bank Land and buildings at cost Machinery and equipment at carrying amount Inventory Trade receivables control Listed investments Bank Trade payables control SARS (income tax) Dividends payable Dividends receivable Accrued expenses (wages) Prepaid expenses Revenue Cost of sales Administrative, distribution and other expenses Fair value gain on listed investments Dividends income Loss on sale of machinery and equipment Income tax expense Depreciation Wages Insurance expense 20.21 R 308 600 254 100 50 900 84 700 399 300 228 600 83 100 104 800 146 900 17 200 63 900 62 700 41 000 30 000 18 000 10 300 887 600 416 600 157 100 7500 18 900 7 800 48 700 13 600 82 300 11 400 30 000 61 200 43 000 36 500 25 500 13 000 3 700 2. Additional information 2.1 The following pertains to property, plant and equipment 2.1.1 During the year machinery and equipment with a carrying amount of R35 000 was sold. This transaction has been correctly recorded. 2.1.2 Land and buildings with a cost price of R50 000 were sold for cash at the same amount. Land and buildings are not depreciated. 2.1.3 All purchases of property, plant and equipment pertained to replacements and were paid in full. 2.2 On 29 February 20.21 Dolly Limited declared ordinary shares dividend of 38 cents per share whilst the preference share dividends amounted to R20 800. 2.3 The interest expense on the long-term loan amounted to R8 500 and was added in the administrative, distribution and other expenses amount above. 2.4 On 31 August 20.20, when the total number of ordinary shares issued were 120 000 shares, the shareholders approved the capitalisation issue of one (1) ordinary share for every four (4) ordinary shares held. The capitalisation issue was done from retained earnings at R0,50 per share. All other issued shares were paid for in cash. QUESTION 1 Which of the following alternatives represents the correct amount that must be disclosed as cash receipts from customers in the cash generated from operations section according to direct method in the statement cash flows of Dolly Limited for the year ended 28 February 20.21? . . A. 686 000 B. 695 000 C. 887 600 . D. 785 400 E. 776 000 F. 877 800 QUESTION 2 Assume the correct cash receipts from customers is R800 000. Which of the following alternatives represents the correct amount that must be disclosed as cash generated from operations in the cash flows from operating activities section according to direct method in the statement of cash flows of Dolly Limited for the year ended 28 February 20.21? A. 333 900 . B. 218 400 C. 205 900 . . D. 133 200 E. 267 900 . F. 280 900 QUESTION 3 Which of the following alternatives represents the correct amount that must be disclosed as interest paid in the cash generated from operations section according to direct method in the statement cash flows of Dolly Limited for the year ended 28 February 20.21? . A. (45 800) B. 8 500 . C. 8 550 . D. (8 550) E. (8 500) F. 45 800