The following information pertains to Dolly Limited.

1. Extract from ledger account balances as at 28 February:

	20.21	20.20
	R	R
Share capital: Ordinary shares	308 600	251 200
Share capital: Preference shares	254 100	239 100
Retained earnings	50 900	41 200
Long-term loan - ABC Bank	84 700	121 000
Land and buildings at cost	399 300	375 100
Machinery and equipment at carrying amount	228 600	219 700
Inventory	83 100	74 100
Trade receivables control	104 800	95 000
Listed investments	146 900	-
Bank	17 200	30 000
Trade payables control	63 900	61 200
SARS (income tax)	62 700	43 000
Dividends payable	41 000	36 500
Dividends receivable	30 000	25 500
Accrued expenses (wages)	18 000	13 000
Prepaid expenses	10 300	3 700
Revenue	887 600
Cost of sales	416 600
Administrative, distribution and other expenses	157 100
Fair value gain on listed investments	7 500
Dividends income	18 900
Loss on sale of machinery and equipment	7 800
Income tax expense	48 700
Depreciation	13 600
Wages	82 300
Insurance expense	11 400

2. Additional information

2.1 The following pertains to property, plant and equipment

2.1.1 During the year machinery and equipment with a carrying amount of R35 000 was sold. This transaction has been correctly recorded.

2.1.2 Land and buildings with a cost price of R50 000 were sold for cash at the same amount. Land and buildings are not depreciated.

2.1.3 All purchases of property, plant and equipment pertained to replacements and were paid in full.

2.2 On 29 February 20.21 Dolly Limited declared ordinary shares dividend of 38 cents per share whilst the preference share dividends amounted to R20 800.

2.3 The interest expense on the long-term loan amounted to R8 500 and was added in the administrative, distribution and other expenses amount above.

2.4 On 31 August 20.20, when the total number of ordinary shares issued were 120 000 shares, the shareholders approved the capitalisation issue of one (1) ordinary share for every four (4) ordinary shares held. The capitalisation issue was done from retained earnings at R0,50 per share. All other issued shares were paid for in cash.

QUESTION 1

Which of the following alternatives represents the correct amount that must be disclosed as cash receipts from customers in the cash generated from operations section according to direct method in the statement cash flows of Dolly Limited for the year ended 28 February 20.21?

• A.

  785 400

• B.

  695 000

• C.

  776 000

• D.

  877 800

• E.

  686 000

• F.

  887 600

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Question 2 of 17

6.5 Points

QUESTION 2

Assume the correct cash receipts from customers is R800 000. Which of the following alternatives represents the correct amount that must be disclosed as cash generated from operations in the cash flows from operating activities section according to direct method in the statement of cash flows of Dolly Limited for the year ended 28 February 20.21?

• A.

  333 900

• B.

  205 900

• C.

  267 900

• D.

  280 900

• E.

  133 200

• F.

  218 400

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Question 3 of 17

1.5 Points

QUESTION 3

Which of the following alternatives represents the correct amount that must be disclosed as interest paid in the cash generated from operations section according to direct method in the statement cash flows of Dolly Limited for the year ended 28 February 20.21?

• A.

  (8 550)

• B.

  45 800

• C.

  8 500

• D.

  8 550

• E.

  (45 800)

• F.

  (8 500)

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Question 4 of 17

2.5 Points

QUESTION 4

Which of the following alternatives represents the correct amount that must be disclosed as income tax paid in the cash flows from operating activities section according to direct method in the statement cash flows of Dolly Limited for the year ended 28 February 20.21?

• A.

  (47 200)

• B.

  (29 500)

• C.

  (29 000)

• D.

  (29 800)

• E.

  (48 700)

• F.

  (45 800)

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