Question 1

You are given the following financial statement of ABC (Pty) Ltd to prepare cash flow statement.

Statement of Comprehensive income for the year ended 31 March 2021

Continuing operations	$000
Revenue	7,755
Cost of goods sold	(4,233)
Gross Profit	3,522
Profit on sale of non-current assets	78
Distribution costs	(868)
Administration expenses	(619)
Profit from operations	2113
Finance costs	(208)
Profit before tax	1905
Tax	(436)
Profit for the period from continuing operations	1,469

The Statement of Financial Position as at 31 March 2021

	2021 $000	2020 $ 000
Assets
Non-Current assets	4599	3493
Property, Plant and equipment	4599	3493
Current assets	3898	3153
Inventories	2585	1958
Trade and other receivables	1293	1195
Cash and cash equivalents	20	0
Total assets	8497	6646
Equity and Liabilities
Equity	3921	2135
Share capital	2143	1629
Share Premium	343	0
Retained earnings	1435	506
Non-current liabilities	2604	2849
Long-term loans	2604	2849
Current liabilities	1972	1662
Trade and other payables	1536	1123
Tax liability	436	422
Bank overdraft	0	117
Total liabilities	4576	4511
Total Equity and Liabilities	8497	6646

Further information

1. A dividend was paid for $540,000 during the year.

2. The total depreciation of $ 432,857 was charge for the year. A non-current asset was disposed which costing $311,145 with accumulated depreciation of P148,286.

Required:

a. Prepare the reconciliation of profit from operations to cash from operating activities for ABC (Pty) Ltd for the year ended 31 March 2021. (12 marks)

b. Prepare the statement of cash flow for ABC (Pty) Ltd for the year ended 31 March 2021. (13 marks)