Question 2 MJs draft financial statements for the year ended 30 June 2020 and financial statements for the year ended 30 June 2010 are as follows: Statement of Financial Position as at 30 June 2020 2019 Other Information R000 R000 Non-current assets Property, plant & equipment (i) to (v) 5,675 4,785 Deferred development expenditure (vi) 170 69 5,845 4,854 Current assets Inventory 95 80 Trade receivables 190 145 Cash and cash equivalents 95 160 380 385 6,225 5,239 Equity and liabilities Equity Share capital (vii) 910 760 Share premium (vii) 665 400 Revaluation reserve 600 0 Retained earnings 2,899 1,982 5,074 5,239 Non-current liabilities Deferred tax 410 0 Long-term loans 250 1,500 660 1,500 Current liabilities Trade payables 60 85 Income tax 321 305 Interest payable 5 32 Provision for restructuring costs (ix) 0 100 Provision for legal claim (viii) 105 75 491 597 6,225 5,239 Statement of comprehensive income for the year ended 30 June 2020 R000 Revenue 2,300 Cost of Sales (450) 1,850 Administration expenses and distribution costs (200) Loss on disposal of plant (15) Profit from operations 1,635 Interest payable (95) Profit before tax 1,540 Income tax (455) Profit after tax 1,085 Other comprehensive Income Revaluation of property, net of deferred tax 600 Total comprehensive income 1,685 Other information: (i) Non-current assets property, plant and equipment, balances at 30 June 2019 were: Cost or valuation: R000 R000 Property 4,150 Plant 2,350 Equipment 985 7,485 Depreciation: Property 450 Plant 1,350 Equipment 900 2,700 Net book value 4,785 (ii) Equipment was purchased during the year at a cost of R275,000 and plant was purchased for R215,000. (iii) During the year MJ disposed of plant with a book value of R30,000 and accumulated depreciation of R60,000. (iv) On 1 July 2019 property was revalued to R4,500,000. At that time the average remaining life of property was 90 years. Property is depreciated on a straight line basis. (v) Depreciation for the year was R280,000 and R40,000 for plant and equipment respectively. (vi) Development expenditure incurred during the year to 30 June 2020 was R114,000. Deferred development expenditure is amortised over its useful economic life. (vii) MJ issued equity shares during the year at a premium. (viii) Provision was made by MJ for outstanding legal claims against the entity at the year end. (ix) The restructuring costs relate to a comprehensive restructuring and re-organisation of the entity that began in 2018. MJs financial statements for the year ended 30 June 2019 included a provision for restructuring costs of R100,000. Restructuring costs incurred in the year to 30 June 2020 were R160,000. No further restructuring and re-organisation costs are expected to occur. MJ treats restructuring costs as a cost of sales. Required: Prepare a statement of cash flows, for MJ for the year ended 30 June 2020 using the indirect method, in accordance with the requirements of IAS 7 Statement of Cash Flows. (25 marks)