QUESTION FOUR [25]

The following information was extracted from the accounting records of Mode Ltd for the financial year ended 30 June 2020.

Extract from: Statement of Profit or loss and other comprehensive income of Mode Ltd for the year ended 30 June 2020

	R
Gross profit	1 440 000
Dividends received	43 000
Profit on sale of machine	75 000
Depreciation	(15 000)
Interest expense	(180 000)
Distribution, administration and other expenses	(403 000)
Taxation	(420 000)
Profit for the year after taxation	540 000

Extract from: Statement of financial position of Mode Ltd as at 30 June 2020:

ASSETS	30 June 2020 R	30 June 2019 R
Land and buildings	925 000	890 000
Machinery at carrying amount	875 000	250 000
Investments	235 000	385 000
Inventory	170 000	480 000
Trade debtors	140 000	400 000
Receiver of revenue income tax	10 000	Nil
Bank balance	30 000	15 000
Total assets	2 385 000	2 420 000
EQUITY AND LIABILITIES	1565 000	940 000
EQUITY
Ordinary share capital	745 000	480 000
Retained earnings	820 000	460 000
LIABILITIES	820 000	1 480 000
Long term Borrowings	750 000	1 050 000
Trade creditors	60 000	352 000
Receiver of revenue income tax	Nil	43 000
Shareholders for dividends	10 000	35 000
Total equity and liabilities	2 385 000	2 420 000

Additional information:

1. Shares were issued for cash during the year.

2. Dividends of R180 000 were declared during the current financial year.

3. On 31 October, machinery with a carrying amount of R110 000 was sold for cash. A replacement machine as well as additional machinery was purchased for cash.

4. No long term borrowings were made during the year.

5. Investments were sold during the year. No new investments were purchased.

Required:

Take all the above information into account and prepare the statement of cash flows for Mode Ltd for the year ended 30 June 2020. Use the indirect method. Your answer must comply with the International Financial Reporting Standards (IFRS) appropriate to this type of business.

Show all workings. Round off all workings to the nearest Rand.