2. Additional information

2.1 The following pertains to property, plant and equipment:

During the year machinery and equipment with a carrying amount of R95 000 was sold for cash. This transaction has been correctly recorded.

Land and buildings with a cost price of R110 000 were sold for cash at the same amount. Land and buildings are not depreciated.

All purchases of property, plant and equipment pertained to replacements and were paid in full.

2.2 On 29 September 2022 Honey Limited declared ordinary shares dividend of 50 cents per share whilst the preference shares dividends amounted to R40 800.

2.3 The interest expense paid on the long-term loan amounted to R16 800 and is not yet recorded.

2.4 On 31 August 2022, 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

Assume the correct cash receipts from customers is R920 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 Honey Limited for the year ended 30 September 2022?

1. 253 900

2. 267 900

3. 268 800

4. 270 200

5. 300 000