Question 1 The following are the post-closing trial balances of Crazehill Ltd as at 30 June 2014 and 30 June 2015: 2014 2015 Credits Ordinary share capital 375,000.00 750,000.00 6% preference shares 172,500.00 151,125.00 Revaluation surplus - 75,000.00 Retained earnings 23,730.00 33,330.00 8% mortage bond 142,500.00 30,000.00 Accounts payable 135,750.00 37,800.00 Bank overdraft 12,600.00 - Proposed ordinary dividend 7,500.00 15,000.00 Taxation provision 3,150.00 6,300.00 Accumulated depreciation: Plant 90,000.00 117,000.00 Accumulated depreciation: Vehicles 24,000.00 29,940.00 986,730.00 1,245,495.00 Debits Goodwill 24,000.00 - Land and buildings (at cost/valuation) 300,000.00 360,000.00 Plant ( cost) 228,000.00 291,000.00 Vehicles ( at cost) 63,000.00 74,400.00 Inventory 214,200.00 282,000.00 Accounts reeivable 157,500.00 153,000.00

14 Share issue expenses - 16,125.00 Cash at bank - 68,970.00 986,700.00 1,245,495.00 Additional information: 1. In March 2015, the company sold a vacant stand that cost N$ 15 000 for N$ 30 0000 cash and had the remaining property revalued by a sworn appraiser. The directors decide to show the property in the books at the increased value. 2. Included in the profit before tax is interest paid of N$ 9 000 and interest received of N$ 5 400. 3. Revenue for the year amounted to N$ 504 000. 4. During July 2014, the company purchased additional plant and traded in this asset in part settlement of the purchase price of the plant. Cost Accumulated Depreciation Trade in value Plant 48,000.00 28,800.00 24000 The company doesnt depreciate non-current assets sold during the year. 5. Profit and loss account for the year ended 30 June 2015: General Ledger of Crazehill Ltd Final Accounts Section PROFIT OR LOSS ACCOUNT Dr. Cr. Jun. 30 Taxation GJ6 38,400.00 Jul 1 Retained earnings GJ6 23,730.00 30 Goodwill GJ6 24,000.00 Jun 30 Profit before tax GJ6 96,000.00 30 Preference dividends proposed GJ6 9,000.00 30 Ordinary dividends proposed GJ6 15,000.00 30 Retained earnings GJ6 33,330.00

15 119,730.00 119,730.00 6. During January 2015, the company issued the balance of its shares. Issues expenses of N$ 16 125 were incurred. In terms of the directors resolution, the issue expenses must be written off. You are required to: 1.1 Prepare the statement of cash flow for the company, using the indirect method, for the year ended 30 June 2015. This statement must in all aspects comply with the requirements of AIS 7 (IFRS) and Companies Act 71 of 2008. [25 marks] 1.2 Explain the main objective and advantages of a statement of statements of cash flows. [5 marks