Answer all questions in this section. [100 MARKS] QUESTION 1 (20 Marks) REQUIRED Study the statement of cash flows given below and answer the following questions: 1.1 Calculate the following: 1.1.1 Dividends paid (2 marks) 1.1.2 Carrying value (Book value) of the equipment sold (2 marks) 1.1.3 Cash and cash equivalents at the end of year (2 marks) 1.2 Identify TWO (2) items from this statement of cash flows that improve cash flow but do not increase profit. (2 marks) 1.3 Explain why depreciation is added to operating profit in computing the cash flow from operating activities. (2 marks) 1.4 There is a combination of a positive cash flow from operating activities of R1 504 000 and a negative cash flow from investing activities of R8 384 000. Is this favourable for Sinclair Ltd? Provide THREE (3) reasons for your answer. (6 marks) 1.5 Comment on the following: 1.5.1 Decrease in inventory, R264 000 (2 marks) 1.5.2 Increase in receivables, (R3 712 000) (2 marks) INFORMATION SINCLAIR LTD STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021 R Cash flows from operating activities 1 504 000 Profit before interest and tax/Operating profit 10 136 000 Adjustments to convert to cash from operations Non-cash flow adjustments 6 176 000 Depreciation 6 000 000 Loss on disposal of equipment 176 000 Profit before working capital changes 16 312 000 Working capital changes (4 112 000) Decrease in inventory 264 000 Increase in receivables (3 712 000) Decrease in payables (664 000) Cash generated from operations 12 200 000 Interest paid (3 744 000) Dividends paid ? Income tax paid (2 880 000) Cash flows from investing activities (8 384 000) Non-current assets purchased (10 576 000) Proceeds from sale of equipment 2 192 000 Cash flows from financing activities 8 640 000 Proceeds from issue of ordinary shares 2 880 000 Increase in long-term borrowings 5 760 000 Net increase in cash and cash equivalents ? Cash and cash equivalents at beginning of year 1 440 000 Cash and cash equivalents at the end of year ?