QUESTION 3 (25 Marks) The following information was extracted on 31 December 2021 from the records of Koekashop (Pty) Ltd, after the gross profit was determined for the year: Pre-adjustment trial balance on 31 December 2021 Inventory Trade debtors Allowance for credit losses Land and buildings Petty cash Equipment@cost Accumulated depreciation on equipment Vehicles cost Accumulated depreciation on vehicles Fixed 30-day notice deposit Bank 15% Long term loan (no repayments during current year) Ordinary share capital (N$2,50 par value shares) Preference share capital (N$1 par value shares) Retained earnings Trade creditors Income tax payable to NAMRA Gross Profit Income taxation expense Administrative expenditure Other operating expenses Distribution costs Ordinary share dividends Depreciation Credit losses Debit (N$) 85 000 Credit (N$) 105 000 3 000 350 000 500 100 000 50 000 120 000 44 000 250 000 190 935 200 000 500 000 100 000 108 595 21 275 41 598 550 000 41 598 11 971 294 248 10 672 5 000 49 000 4 544 1 618 468 1 618 468 Additional information: 1. The long term loan was acquired on 1 June 2021. The interest was paid on 31 December 2021, but no entry has been made for it yet. 2. On 31 December 2021 a vehicle, with a cost of N$25 000 (accumulated depreciation balance N$20 000), was sold for N$10 000 cash to Win-Win Motors. No entry has been made for this transaction yet. 3. 4. The correct amount paid to suppliers and employees can be accepted as N$2 671 926. The GP% for the year was 25% on cost price. Final closing trial balance on 31 December 2020 Land and buildings Equipment@cost Accumulated depreciation on equipment Vehicles @ cost Accumulated depreciation on vehicles Inventory Trade debtors Allowance for credit losses Bank Petty cash Ordinary share capital (RN$.50 par value shares) Retained earnings Trade creditors REQUIRED: Debit (N$) Credit (N$) 350 000 100 000 25 000 120 000 20 000 65 000 60 000 2 500 132 595 500 250 000 108 595 156 810 695 500 695 500 Prepare the statement of cash flows for the year ended 31 December 2021 in accordance with IAS 7: Statement of Cashflows. Make use of the direct method and show the following two notes: Reconciliation of profit before tax to cash flow from operations Cash & Cash equivalents