QUESTION 2 (40 marks) The financial statements of True-Worth Dealers are presented below. TRUE-WORTHS DEALERS STATEMENT OF PROFIT OF LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDING 28 FEBRUARY 2020 R Net sales Cost of sales Gross profit 720 000 (484 800) 235 200 Other income: Profit on sale of equipment 12000 72 000 10 800 2 400 1 800 Operating expenses: Depreciation equipment Depreciation: vehicles Loss on sale of a vehicle Credit losses Discount allowed Sundry expenses Operating profit Interest and finance costs: Interest received Interest paid Profit for the year 1 600 97 400 50 400 12 000 (14 400) 48 000 TRUE-WORTHS DEALERS STATEMENT OF FINANCIAL POSITION ON 28 FEBRUARY 2020 2020 R 2019 R 672 000 576 000 ASSETS Non-current assets Equipment at cost Accumulated depreciation equipment Vehicles at cost Accumulated depreciation: vehicles Investment 230 400 240 000 (72 000) (96 000) 148 800 134 400 (76 800) (72000) 120 000 190 400 124 000 43 200 48 000 72 000 36 000 Current assets Inventory Trade debtors Bank Accrued income TOTAL ASSETS 73 200 36 000 2000 24 000 862 400 354 400 630 000 294 000 EQUITY AND LIABILITIES Equity: Capital Retained earnings Drawings 558 000 264 000 102 000 (30000) 54 000 (24000) Non-current liabilities Long-term loan 144 000 88 400 60 400 24 000 48 000 Current liabilities Trade creditors Accrued expenses TOTAL EQUITY AND LIABILITIES 12 400 64 400 862 400 354 400 Additional information: 1. Equipment with a cost price of R120 000 and a carrying value of R72 000 was sold during the year, and new equipment was purchased to replace the old equipment. 2. A vehicle with a cost price of R24 000 and a carrying value of R7 200 was sold during the year, and a new vehicle was purchased to replace the old one. REQUIRED: MARKS Prepare the statement of cash flow, with the relevant notes for True-Worths Dealers for the year ended 28 February 2020. 40 TOTAL MARKS 40