QUESTIONS 4 AND 5 ARE BASED ON THE FOLLOWING INFORMATION: The information given below was obtained from the books of Libra Limited: A. STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER: 2019 R 2018 R ASSETS Non-current assets 1 008 000 636 000 Property, plant and equipment (cost) 996 000 648 000 Accumulated depreciation (252 000) (192 000) Long-term investments 264 000 180 000 Current assets 1 224 000 1 140 000 Inventories 420 000 516 000 Trade and other receivables 504 000 360 000 Bank 300 000 264 000 2 232 000 1 776 000 EQUITY AND LIABILITIES Equity 2 040 000 1 663 200 Ordinary Share Capital 1 440 000 1 200 000 Retained Income 600 000 463 200 Current liabilities 192 000 112 800 Trade and other payables 180 000 91 200 Income tax payable 12 000 21 600 2 232 000 1 776 000 vmc B. EXTRACT FROM THE STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2019 R Sales 1 680 000 Cost of sales (1 060 800) Gross profit 619 200 Depreciation (84 000) Other expenses (235 200) Operating profit 300 000 Interest income 24 000 Profit before tax 324 000 Company tax (96 000) Profit after tax 228 000 C. ADDITIONAL INFORMATION All purchases and sales of inventories are on credit. Equipment was purchased for cash. A vehicle with a cost price of R144 000 and accumulated depreciation of R24 000 was sold at carrying value. Interim dividends paid during the year amounted to R91 200. No final dividends were declared. The issued share capital for the year ended 30 September 2019 consisted of 500 000 ordinary shares. Trade and other payables consisted of trade creditors only. vmc

QUESTION 4 (20 MARKS) REQUIRED Use the information provided above to prepare the Cash Flow Statement of Libra Limited for the year ended 30 September 2019.

QUESTION 5 20 MARKS REQUIRED 5.1 Use the information provided above to calculate the following ratios for the financial year ended 30 September 2019. (Where applicable, round off answers to two decimal places.) 5.1.1 Profit margin (Net profit margin) (2 marks) 5.1.2 Acid test ratio (2 marks) 5.1.3 Return on equity (2 marks) 5.1.4 Inventory turnover (2 marks) 5.1.5 Debt to assets (2 marks) 5.1.6 Dividends per share (2 marks) 5.1.7 Creditors payment period (2 marks) 5.2 Comment on the following ratios that have been calculated for Libra Limited. Provide two significant comments for each ratio. 2019 2018 5.2.1 Return on assets 13.44% 18.78% (2 marks) 5.2.2 Earnings per share 45.60 cents 50 cents (2 marks) 5.2.3 Current ratio 6.38:1 10.11:1 (2 marks) TOTAL: 100

Information given below was obtained from the books of Libra Limited 4 A STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER: 2019 R 2018 R 636 000 ASSETS Non-current assets Property, plant and equipment (cost) Accumulated depreciation Long-term investments Current assets Inventories Trade and other receivables Bank 648 000 (192 000) 180 000 1 008 000 996 000 (252 000) 264 000 1224 000 420 000 504 000 300 000 1 140 000 516 000 360 000 264 000 1 776 000 2 232 000 2 040 000 1 663 200 1.440 000 EQUITY AND LIABILITIES Equity Ordinary Share Capital Retained Income Current liabilities Trade and other payables Income tax payable 1 200 000 600 000 463 200 192 000 112 800 180 000 91 200 12 000 21 600 2 232 000 1 776 000 EXTRACT FROM THE STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2019 R Sales Cost of sales Gross profit Depreciation Other expenses Operating profit Interest income Profit before tax Company fax Profit after tax 1 680 000 (1 060 800) 619 200 (84000) (235 200) 300 000 24 000 324 000 (96 000) 228 000 C. . ADDITIONAL INFORMATION All purchases and sales of inventories are on credit. Equipment was purchased for cash. A vehicle with a cost price of R144 000 and accumulated depreciation of R24 000 was sold at carrying value Interim dividends paid during the year amounted to R91 200. No final dividends were declared. The issued share capital for the year ended 30 September 2019 consisted of 500 000 ordinary shares. Trade and other payables consisted of trade creditors only QUESTION 4 REQUIRED (20 MARKS) Use the information provided above to prepare the Cash Flow Statement of Libra Limited for the year ended 30 September 2013 20 MARKS 5.1 QUESTION 5 REQUIRED Use the information provided above to calculate the following ratios for the financial year ended 30 September 2019. (Where applicable round off answers to two decimal places.) 5.1.1 Profit margin (Net profit margin) 5.1.2 Acid test ratio 5.1.3 Return on equity 5.1.4 Inventory turnover 5.1.5 Debt to assets 5.1.6 Dividends per share 5.1.7 Creditors payment period (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) 52 Comment on the following ratios that have been calculated for Libra Limited. Provide two significant comments for each ratio 2019 2018 5.2.1 Return on assets 13.44% 18.78% (2 marks) 5.2.2 Earnings per share 45.60 cents 50 cents (2 marks) 2.3 Current ratio 6.38:1 10.11:1 (2 marks) TOTAL: 100 END OF PAPER