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 720 000 Cost of sales (484 800) Gross profit 235 200 Other income: Profit on sale of equipment 12 000 Operating expenses: Depreciation: equipment 72 000 Depreciation: vehicles 10 800 Loss on sale of a vehicle 2 400 Credit losses 1 800 Discount allowed 1 600 Sundry expenses 97 400 Operating profit 50 400 Interest and finance costs: Interest received 12 000 Interest paid (14 400) Profit for the year 48 000 TRUE-WORTHS DEALERS STATEMENT OF FINANCIAL POSITION ON 28 FEBRUARY 2020 2020 2019 R R ASSETS Non-current assets 672 000 230 400 Equipment al cost 576 000 240 000 Accumulated depreciation equipment (96 000) (72 000) Vehicles at cost 148 800 134 400 Accumulated depreciation: vehicles (76 800) (72 000) Investment 120 000 Current assets 190 400 124 000 43 200 48 000 Inventory Trade debtors 72 000 36 000 Bank 73 200 36 000 Accrued income 2000 24 000 TOTAL ASSETS 862 400 354 400 EQUITY AND LIABILITIES Equity 630 000 294 000 558 000 264 000 Capital Retained earnings 102 000 54 000 Drawings (30 000) (24 000) Non-current liabilities Long-term loan 144 000 Current liabilities 88 400 60 400 Trade creditors 24 000 48 000 Accrued expenses 64 400 12 400 TOTAL EQUITY AND LIABILITIES 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