Additional information: i. Dividends paid were P66,000. ii. During the year, the company paid P90,000 for a new piece of machinery. Required: Prepare the statement of cash flows for Kgotso Co for the year ended 31 December 2021 using the indirect method. (25 marks)

QUESTION 2 Kgotso Co's income statement for the year ended 31 December 2021 and statement of financial position at 31 December 2021 and 2020 are as follows: KGOTSO CO INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021 P'000 P'000 Sales 720 Raw materials consumed 70 Staff costs 94 Depreciation 118 Loss on disposal of non-current asset 18 300 Operating profit 420 Interest payable 28 Profit before tax 392 Taxation 124 Profit for the year 268 KGOTSO CO STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 2020 P'000 P'000 Non-current assets 1.596 1,560 Cost (318) (224) Depreciation 1.278 1,336 Current assets Inventory Trade receivables Bank 24 76 48 148 1.426 20 58 56 134 1.470 Total assets Equity and liabilities Equity Share capital Share premium Retained earnings 360 36 716 1,112 340 24 514 878 200 500 Non-current liabilities Long-term loans Current liabilities Trade payables Taxation 12 102 114 6 86 92 1.470 Total equity and liabilities 1.426