Question 3 (10) Tramway Ltd has made a loss before tax of $37,500 for the period ending 31 July 2021 The following figures have been provided for your use $ Increase in trade payables 2,200 Decrease in inventories 1,500 Finance costs 3,700 Depreciation charge 4,200 Increase in trade receivables 6,100 From the above, you are required to calculate the cash generated from operations for the year ended 31 July 2021 (5) The financial statements are required as they serve an important purpose With specific examples, outline the general purpose of financial statements 5) Question 4 (10) A company has a legal issue at the courts, which has been dragging for some time now, for which its being sued for substantial damages The solicitor has advised that the company is likely to lose this case According to IAS 37 Provisions, Contingent Liabilities and Contingent Assets , explain how the likely future cash outflow should be treated (5) A company has purchased a new machine with the following expenditure $ Invoice price of the machine 28,500 Delivery costs 800 Cost of testing the machine 1,200 General overhead costs 1,500 Total 32,000 According to IAS 16, Property, Plant and Equipment , show the necessary calculations the company has to include in its property, plant and equipment (5)

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Question 3 (10) Tramway Ltd has made a loss before tax of $37,500 for the period ending 31 July 2021. The following figures have been

Question 3 (10)

Tramway Ltd has made a loss before tax of $37,500 for the period ending 31 July 2021. The following figures have been provided for your use.

	$
Increase in trade payables	2,200
Decrease in inventories	1,500
Finance costs	3,700
Depreciation charge	4,200
Increase in trade receivables	6,100

From the above, you are required to calculate the cash generated from operations for the year ended 31 July 2021. (5)

The financial statements are required as they serve an important purpose. With specific examples, outline the general purpose of financial statements. 5)

Question 4 (10)

A company has a legal issue at the courts, which has been dragging for some time now, for which its being sued for substantial damages.

The solicitor has advised that the company is likely to lose this case.

According to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, explain how the likely future cash outflow should be treated. (5)

A company has purchased a new machine with the following expenditure:

Invoice price of the machine	28,500
Delivery costs	800
Cost of testing the machine	1,200
General overhead costs	1,500
Total	32,000

According to IAS 16, Property, Plant and Equipment, show the necessary calculations the company has to include in its property, plant and equipment? (5)