QUESTION 3 (20 Marks) REQUIRED Use the information provided below to prepare the Cash Flow Statement for the year ended 30 June 2020. INFORMATION The information given below was extracted from the books of Siyakha Limited for the financial year ended 30 June 2020. 1. STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE: 2020 2019 R R ASSETS Property, plant and equipment (See note to the financial statements below.) 14 826 000 13 998 000 Inventory 1 539 000 1 638 000 Accounts receivable 6 243 000 4 572 000 Bank 861 000 480 000 23 469 000 20 688 000 EQUITY AND LIABILITIES Ordinary Share Capital 9 300 000 8 220 000 Retained Income 2 031 000 1701 000 Loan: OVS Bank 8 100 000 5 940 000 Accounts payable 3 795 000 3 549 000 Company tax payable 150 000 564 000 Dividends payable 93 000 714000 23 469 000 20 688 000 2. STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020 Depreciation on Vehicles Depreciation on Equipment Operating profit Interest on Loan Profit before tax Profit after tax R 1 233 000 1 083 000 3 801 000 1 404 000 2 397 000 1 236 000 3. STATEMENT OF CHANGES IN EQUITY AS AT 30 JUNE 2020 Ordinary Share Dividends for the year R906 000 4. NOTE TO THE FINANCIAL STATEMENTS AS AT 30 JUNE: Property, plant and equipment Vehicles (Cost) Accumulated Depreciation on Vehicles Equipment (Cost) Accumulated Depreciation on Equipment 2020 R 7 350 000 2 508 000 15 906 000 5 922 000 2019 R 8 340 000 1 443 000 11 940 000 4 839 000 Note: Some of the vehicles were sold at carrying value during the year, but no new vehides were bought. Equipment was purchased for cash during the year, no equipment was sold. QUESTION 4 (20 Marks) REQUIRED 4.1 Use the information provided below to calculate the following ratios for the financial year ended 31 December 2019. (Where applicable, express answers to two decimal places.) 4.1.1 Gross margin (2 marks) 4.1.2 Current ratio (2 marks) 4.1.3 Return on equity (2 marks) 4.1.4 Inventory tumover (2 marks) 4.1.5 Debt to assets (2 marks) 4.1.6 Earnings per share 4.1.7 Debtors collection period (2 marks) (2 marks) 42 Comment on the following ratios that have been calculated for Mersat Limited. Provide two significant comments for each Ratio 2019 2018 4.2.1 Return on assets 23.15% 20.25% (2 marks) 4.22 Creditors payment period 68.32 days 59.56 days (2 marks) 4.2.3 Acid test ratio 2.36:1 0.87:1 (2 marks) 3 INFORMATION Excerpts of the financial data of Mersat Limited for 2019 are as follows: STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 Sales Cost of sales Operating profit Interest expense Profit before tax Profit after tax R 6 600 000 4614 000 1 446 000 240 000 1 206 000 868 320 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019 R ASSETS Non-current assets Inventories Accounts receivable Cash 3 840 000 342 000 1 440 000 624 000 6 246 000 EQUITY AND LIABILITIES Ordinary share capital Retained earnings Long-term loan Accounts payable 600 000 516 000 4254 000 876 000 6 246 000 Additional information 1. Inventories on 31 December 2018 amounted to R276 000. 2. All purchases and sales of inventory are on credit. 3. 250 000 ordinary shares have been issued by the company. 4. The credit terms offered by suppliers are 60 days