The following information was extracted from the accounting records of Tutima Traders on 30 April 2021, the last day of their financial year. Information Extract from the Statement of Comprehensive Income R Depreciation 16 000 Interest expense 18 000 Income tax for the year 15 000 Net profit after tax 26 100 Extract from Statement of Financial Position R R 30 April 2021 30 April 2020 Tangible assets at carrying value 310 000 220 000 Inventories 50 000 35 000 Trade debtors 60 000 65 000 Cash on hand 3 000 15 000 Bank overdraft 32 000 0 Prepaid expense (Interest on loan) 2 000 1 000 Ordinary share capital 160 000 100 000 Share premium 45 000 30 000 Retained income 81 000 75 000 Loan from Pinetown Bank 58 000 49 000 Trade creditors 45 000 59 000 Shareholders for dividends 12 000 9 000 SARS income tax (Receivable) 8 000 (Payable) 14 000 Page 5 of 5 1. Additional information A. Some fixed assets were sold for R37 000 cash at carrying value and additional fixed assets were purchased during the year. B. Interim dividends at R8100 was declared and paid on 31 October 2020. C. Final dividends were declared on 30 April 2021 and will be paid on 19 May 2021.

Required:

4.1 Prepare the note for reconciliation between profit before taxation and cash generated from operations for the year ended 30 April 2021. (12)

4.2 Prepare the cash flow statement for the year ended 30 April 2021. (9)

4.3 Discuss the purpose of a cash flow statement? (4)