STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021 Cash flows from operating activities Profit before interest and tax/Operating profit Adjustments to convert to cash from operations Non-cash flow adjustments Depreciation Loss on disposal of equipment Profit before working capital changes Working capital changes Decrease in inventory Increase in receivables R 1 504 000 10 136 000 6 176 000 6 000 000 176 000 16 312 000 (4 112 000) 264 000 (3 712 000) Decrease in payables Cash generated from operations Interest paid Dividends paid (664 000) 12 200 000 (3 744 000) ? (2 880 000) Income tax paid Cash flows from investing activities (8 384 000) (10 576 000) 2 192 000 Non-current assets purchased Proceeds from sale of equipment Cash flows from financing activities Proceeds from issue of ordinary shares Increase in long-term borrowings Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at the end of year 8 640 000 2 880 000 5 760 000 ? 1 440 000 ? QUESTION 1 REQUIRED Study the statement of cash flows given below and answer the following questions: (20 Marks) 1.1 Calculate the following: 1.1.1 Dividends paid (2 marks) 1.1.2 Carrying value (Book value) of the equipment sold (2 marks) 1.1.3 Cash and cash equivalents at the end of year (2 marks) 1.2 Identify TWO (2) items from this statement of cash flows that improve cash flow but do not increase profit. (2 marks) 1.3 Explain why depreciation is added to operating profit in computing the cash flow from operating activities. (2 marks) 1.4 There is a combination of a positive cash flow from operating activities of R1 504 000 and a negative cash flow from investing activities of R8 384 000. Is this favourable for Sinclair Ltd? Provide THREE (3) reasons for your answer. (6 marks) 1.5 Comment on the following: 1.5.1 Decrease in inventory, R264 000 1.5.2 Increase in receivables, (R3 712 000) (2 marks) (2 marks)