Question
ACCOUNTING FROM THE QUESTION ABOVE, COMPLETE THE FOLLOWING CASH FLOW STATEMENT: UMHLALI LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED 3 1 DECEMBER 2020 Cash
ACCOUNTING
FROM THE QUESTION ABOVE, COMPLETE THE FOLLOWING CASH FLOW STATEMENT:
UMHLALI LIMITED | ||
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2020 | ||
Cash flows from operating activities | ||
Profit before interest and tax/Operating profit | ||
Adjustments to convert to cash from operations | ||
Add: Depreciation | ||
Profit before working capital changes | ||
Working capital changes | ||
Cash generated from operations | ||
Interest paid | ||
Dividends paid | ||
Company tax paid | ||
Cash flows from investing activities | ||
Cash flows from financing activities | ||
Net increase (decrease) in cash and cash equivalents | ||
Cash and cash equivalents at beginning of year | ||
Cash and cash equivalents at end of year | ||
QUESTION 1 (20 Marks) REQUIRED Use the information provided below to prepare the Cash Flow Statement of Umhlali Limited for the year ended 31 December 2020 INFORMATION The following Information was extracted from the records of Umhlali Limited for the past two years: STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER: 2020 (R) Sales 1 856 000 Cost of sales (1 280 000) Gross profit 576 000 Operating expenses (291 200) Depreciation 30 000 Other operating expenses 261 200 Operating profit 284 800 Interest on mortgage loan (24 000) Profit before tax 260 800 Company tax (90 240) Profit after tax 170 560 2019 (R) 1 200 000 (750 000) 450 000 (212 000) 26 000 186 000 238 000 (72 000) 166 000 (58 100) 107 900 2019 (R) 2 444 000 2 444 000 336 000 250 000 64 000 22 000 2 780 000 Information extracted from the Statement of Financial Position for the past two years: STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: 2020 (R) ASSETS Non-current assets 2464 160 Fixed assets 2464 160 Current assets 356 000 Inventories (all Trading inventory) 120 000 Accounts receivable 40 000 Cash & cash equivalents 196 000 2 820 160 EQUITY AND LIABILITIES Equity 2437 560 Ordinary share capital 2 180 000 Retained income 257 560 Non-current liabilities 200 000 Mortgage loan (12% p.a.) 200 000 Current liabilities 182 600 Accounts payable 98 000 SARS (Company tax) 8 600 Shareholders for dividends 76 000 2 820 160 1 980 000 1 760 000 220 000 600 000 600 000 200 000 138 000 6 000 56 000 2 780 000 Additional information The issue price of all the shares is R10 each. New shares were issued on the first day of the financial year. Interim and final dividends for the year ended 31 December 2020 amounted to R133 000. Fixed assets were sold at carrying (book) value during the year for R144 000. Fixed assets were also purchased UMHLALI LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2020 Cash flows from operating activities Profit before interest and tax/Operating profit Adjustments to convert to cash from operations Add: Depreciation Profit before working capital changes Working capital changes Cash generated from operations Interest paid Dividends paid Company tax paid Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year
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