Prepare the Cash flows from investing activities and Cash flows from financing activities section of Cape Tech Ltd$.\text{'}$s statement of cash flows for the year ended $31$December $2023,$ using the direct method. QUESTION $2$

$(25$ marks$)$

Delta Pharmaceuticals is a company operating in the pharmaceutical sector. The

company's financial year ends on $31$ December. Below are some details extracted

from the company's financial records for the year ended $31$ December $2023.$

Profit before tax for the year ended $31$ December $2023$ was R$909645.$

Delta Pharmaceuticals purchased their main building at the beginning of the

year in $2019$ for R$12012500.$ The building is expected to have a residual value

of R$2500000$ at the end of its useful life of $25$ years. The company uses the

straight$-$line method for depreciation.

During the year, Delta Pharmaceuticals received R$25000$ in dividends from an

investment in another company's shares.

Delta Pharmaceuticals has a loan outstanding at the beginning of the year

amounting to R$5000000.$ This loan attracted an annual interest rate of $9\%.$

The loan is repayable in full in $3$ years from now. Delta Pharmaceuticals' inventory decreased from R$800000$ at the beginning of

the year to R$200000$ at the end of the year.

Trade receivables increased during the year from R$200000$ to R$655000.$

Trade payables decreased during the year from R$759820$ to R$559450.$

The company paid out R$65000$ in dividends during the year.

Delta Pharmaceuticals made additional investments in a new medical patent,

costing R$2000000.$

Old lab equipment was disposed of during the year, with total proceeds of R$665$

The company raised additional short$-$term borrowings of R$1000000$ and repaid

R$110000$ of existing short$-$term borrowings during the year.

Tax paid during the year amounted to R$314700.$

The company commenced the year with a bank overdraft amounting to

R$340060$ on $1$ January $2023,$ but successfully turned it around, ending the year

with a favourable bank balance of R$70015$ on $31$ December $2023.$ REQUIRED:

Prepare the Statement of Cash Flows of Delta Pharmaceuticals for the year ended $31$

December $2023$ using the indirect method.

Instructions:

Compute the net cash flow from each of the three activities: operating,

investing, and financing.

Determine the net increase or decrease in cash and cash equivalents and

reconcile this with the beginning and ending balance of cash and cash

equivalents.