QUESTION $1$

Cape Tech Ltd$.$ which is based in South Africa is a manufacturing firm that also invests

in various assets. Below are the events that took place during the year ended $31$

December $2023$:

Sale of Property, Plant, and Equipment $($PPE$)$:

On $15$ March $2023,$ Cape Tech Ltd$.$ sold one of its old manufacturing machines that

was no longer in use. The machine, originally bought for R$2000000,$ was sold for

R$500000.$ The carrying value of the machine was R$1250000$ on $15$ March $2023.$

Sale of Long$-$Term Investments:

Cape Tech Ltd$.$ also invests in the JSE market. On $30$ June $2023,$ they sold some of

their holdings in a tech company. The shares were originally purchased for R$1000$

$000$ and were sold for R$1400000$ which created a profit of R$400000.$

Purchase of Intangible Assets: Purchase of Intangible Assets:

Cape Tech Ltd$.$ recognised an opportunity to streamline its manufacturing process by

acquiring a new patent from another firm. An agreement was reached on $1$ September

$2023,$ to purchase this patent for a total of R$1000000.$ However, the terms of the deal

stipulated that Cape Tech Ltd$.$ would only make a down payment of R$200000$ in the

current year, with the remaining R$800000$ to be paid in the $2024$ year.

Maturity of a Non$-$Trading Financial Asset:

The company had invested R$1600000$ in debentures of another firm as a non$-$trading

financial asset. On $15$ October $2023,$ the debentures matured. The company received

the principal amount of R$1600000$ on the maturity date.

Insurance Settlements:

Cape Tech Ltd$.$ received an insurance settlement of R$300000$ on $30$ November $2023.$

This relates to damages to a piece of equipment that occurred during the year. The

repair cost was estimated to be R$450000$ and commenced in January $2024.$ Repayment of Long$-$Term Debt:

On $15$ February $2023,$ Cape Tech Ltd$.$ made a repayment on its long$-$term loan,

representing $30\%$ of the initial R$15000000$ loan balance.

Payment of Dividends:

On $30$ April $2023,$ Cape Tech Ltd$.$ paid dividends to its shareholders, amounting to

R$3000000.$

Redemption of Bonds:

On $31$ July $2023,$ Cape Tech Ltd$.$ redeemed bonds $($debt instruments$)$ payable worth

R$4000000.$

Decrease in Short$-$Term Borrowings:

Due to a strong cash position towards the end of the year, Cape Tech Ltd$.$ reduced its

short$-$term borrowings by R$500000$ on $15$ December $2023.$ Decrease in Short$-$Term Borrowings:

Due to a strong cash position towards the end of the year, Cape Tech Ltd$.$ reduced its

short$-$term borrowings by R$500000$ on $15$ December $2023.$

REQUIRED:

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.

$(12$ marks$)$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.