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QUESTION 1 (20 MARKS) REQUIRED Study the Statement of Cash Flows provided below and answer the following questions: 1.1 Calculate the depreciation for the year
QUESTION 1 (20 MARKS) REQUIRED Study the Statement of Cash Flows provided below and answer the following questions: 1.1 Calculate the depreciation for the year ended 31 December 2022. ( 2 marks) 1.2 Calculate the cash balance as at 31 December 2022 if there was a bank overdraft of R24 000 on 31 December 2021. State whether the balance is favourable or unfavourable. ( 2 marks) 1.3 Based on the cash flow information, how does the company appear to be performing? Explain by referring to FIVE (5) items on the statement. (10 marks) 1.4 The long-term loan was increased on 01 July 2022. Was it prudent for the company to have taken the loan? Explain. ( 2 marks) 1.5 Suggest FOUR (4) ways in which the company can improve its liquidity. (4 marks) \begin{tabular}{|l|r|} \hline Increase in receivables & (960000) \\ \hline Increase in payables & 2400000 \\ \hline Cash generated from operations & 924000 \\ \hline Interest paid & (300000) \\ \hline Cash flows from investing activities & (1200000) \\ \hline Acquisition of plant and equipment & (1200000) \\ \hline Cash flows from financing activities & 720000 \\ \hline Increase in long-term loan (interest rate 25\% p.a.) & 720000 \\ \hline Net change in cash & ? \\ \hline Cash balance (31 December 2021) & ? \\ \hline \end{tabular}
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