ALL questions. [100 MARKS] The information and questions that follow pertain to Hemrock Ltd for the period 01 January 2018 to 31 December 2020. QUESTION 1 REQUIRED Study the information provided below and answer the following questions: (25 Marks) 1.1 Explain the changes that possibly took place during 2019 in respect of: 1.1.1 Financing activities (2 marks) 1.1.2 Investing activities. (4 marks) 1.2 Calculate the distribution costs for 2019. (2 marks) 1.3 Of what significance is the statement of comprehensive income to potential investors? (2 marks) 1.4 If the interest rate on loans was 15% whilst the return on assets was 22%, how are the shareholders likely to interpret this? (3 marks) 1.5 Critically assess the performance of the company from the information provided. (12 marks) INFORMATION The statements of comprehensive income of Hemrock Ltd for 2019 and 2018 are provided below: HEMROCK LTD STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER: 2019 (R) 2018 (R) Sales Cost of sales 4 500 000 (1950 000) Gross profit Other operating income 2 550 000 150 000 4 000 000 (1 700 000) 2 300 000 140 000 Distribution costs ? ? Administrative expenses (600 000) (550 000) Operating profit 600 000 540 000 Interest income 5 500 2 700 Interest expense (4 350) (8 800) Profit before tax 601 150 533 900 Company tax (180 345) (160 170) Profit after tax 420 805 373 730 Additional information 1. Depreciation for the year is as follows: 2019: R200 000 2018: R300 000