Hi.

Please assist me with revision question 3 in preparing the Cash Flow Statement. I am having some difficult in answering this question.

Please may all calculations and explanations be provided for learning and revision. Where possible, small notes and summaries will be highly appreciated. Vague and basic answers will not be helpful.

Answers should be well formatted, explained and according to IFRS/IAS Accounting Standards and Principles.

The cash flow statement is required using the indirect method. There is only one question (to prepare the cash flow statement). All information is given as provided to us.

Additional Information:

South Africa Company Tax Rate is 28%

South Africa VAT Rate is 15%

Question 3 (48 marks) Arabian Nights Ltd is a restaurant franchise that is known for its traditional dcor and exotic cuisine. The following are extracts from Arabian Nights Ltd's Statement of Comprehensive Income as well as the Statement of Financial Position for the financial year ended 31 December 2021. Statement of Financial Position of Arabian Nights Ltd at 31 December 2021 ASSETS 2021 2020 Non-current assets 12 130 000 10 145 000 Property, plant and equipment (see (b) below] 11 560 000 9 745 000 Investments 570 000 400 000 Current assets 2 090 990 1 417 008 Inventory 430 000 370 000 Trade and other receivables 27 000 30 000 Prepaid insurance 36 000 45 000 Cash and cash equivalents 1 597 990 972 008 Total assets 14 220 990 11 562 008 EQUITY AND LIABILITIES Equity attributable to owners Share Capital (R1 ordinary shares) (see (a) below] Retained earnings Revaluation Surplus (see (b) below] Total equity 13 740 768 10 340 000 3 330 768 10 994 000 10 000 000 994 000 70 000 0 Current Liabilities 480 222 568 008 124 000 345 000 Trade and other payables Current tax payable 223 008 356 222 480 222 Total liabilities 568 008 Total equity and liabilities 14 220 990 11 562 008 Extracts from the Statement of Comprehensive Income (SCI) of Arabian Nights Ltd for the financial year ended 31 December 2021 Profit before tax ? Income tax expense 947 632 Profit for the year ? Additional information: a) Shares issued during the year were as follows: Bonus (capitalization) shares were issued in June 2021 to existing shareholders where 1 additional share was issued for every 100 shares held. There were 10 000 000 ordinary shares in issue at 1 January 2021. . A new issue of ordinary shares occurred in October 2021. The share issue costs associated with this issue amounted to R30 000 and were paid in the same month b) The following relates to transactions relating to PPE. Land was purchased for the first time during the year and it was decided to report it using the revaluation model. At 31 December 2021, the fair value of the land was higher than its cost. Other PPE consists of Furniture and Vehicles, both of which are meas- ure and reported using the cost model. . Furniture with a carrying value of R220 000 was completely destroyed when a fire broke out at one of Arabian Nights Ltd's restaurants. Pro- ceeds received from the insurance company relating to this amounted to R250 000 and was credited to the Gain on disposal of furniture account No other disposals of furniture took place during the year. . A vehicle with a carrying value of R380 000 was disposed of for R360 000 cash. This was the only disposal of vehicles during the year. Total depreciation for vehicles and furniture amounted to R1 275 000 for the year. Land is not depreciated. c) Dividends received from the investments amounted to 35 000. d) No dividends were declared during the year. REQUIRED: Prepare the statement of cash flows for Arabian Nights Ltd for the financial year ended 31 December 2021, using the indirect method. (48 marks)