The trial balance, adjustments and additional information given below were obtained from the records of Pentel Traders on 29 February 2020, the end of the financial year. PENTEL TRADERS PRE-ADJUSTMENT TRIAL BALANCE AS AT 29 FEBRUARY 2020 Debit (R) Credit (R) Balance sheet accounts section Capital 681 800 Drawings 82 000 Land and buildings 489 000 Vehicles at cost 190 000 Equipment at cost 63 000 Accumulated depreciation on vehicles 32 000 Accumulated depreciation on equipment 23 400 Trading inventory 46 000 Debtors control 34 000 Provision for bad debts 1.900 Bank 1 100 Petty cash 100 Creditors control 30 400 Loan: Met Bank (15%) 30 000 Nominal accounts section Sales 420 000 Cost of sales 233 000 Sales returns 5 000 11.000 Wages Wages 41 000 Bank charges 3 000 Rent income 27 000 Packing materials 12 000 Advertising 6 000 Rates 4 000 Bad debts 1 000 Discount allowed 2 000 Discount received Stationery Interest on loan 700 9 000 4.000 Water and electricity Insurance Telephone 7 000 9 000 7 000 1 247 200 1247 200 Tools Adjustments and additional information A physical count revealed the following inventories on 29 February 2020: 1 11 Trading inventory 1.2 Packing matenals 2 3 4 R43 000 R1 000 Received an account from Wheel Centre for replacing the tyres on the motor vehicle, R6 000. No entry has been made for this. The account of debtor, J. Parsons, who owed R1 000 must be written off as irrecoverable. A debtor whose account of R3 000 was overdue for one month must be charged interest at a rate of 12% per annum. 5 The provision for bad debts must be reduced to R1 700. 6 Provide for outstanding interest on loan, R500. 7. The telephone account for February 2020 was due to be paid on 03 March 2020, R700. 8 The insurance account includes the annual building insurance premium that was paid for the period 01 June 2019 to 31 May 2020, R2 400. 9 10 11. 11.1 11.2 The bookkeeper did not record an amount of R200 that was reflected on the March bank statement for service fees Rent has been received for March 2020. Note: The rent was increased by R500 per month with effect from 01 February 2020. Provide for depreciation as follows: On vehicles at 20% per annum on the diminishing balance On equipment at 10% per annum on cost. Note: A computer with a cost price of R10 000 was purchased on 01 September 2019. The purchase has been recorded. Answer ALL questions below QUESTION 1 REQUIRED [100 MARKS] (20 Marks) Use the information provided below to prepare the Cash Flow Statement of Umhlali Limited for the year ended 31 December 2020. INFORMATION The following Information was extracted from the records of Umhlali Limited for the past two years: STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER: Sales Cost of sales Gross profit 2020 (R) 2019 (R) 1 200 000 (750 000) 1856 000 (1 280 000) 576 000 (291 200) 450 000 (212 000) Operating expenses Depreciation 30 000 26 000 Other operating expenses 261 200 186 000 Operating profit 284 800 238 000 Interest on mortgage loan (24 000) (72 000) Profit before tax 260 800 166 000 Company tax (90 240) (58 100) Profit after tax 170 560 107 900 Information extracted from the Statement of Financial Position for the past two years: STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: ASSETS Non-current assets Fixed assets Current assets Inventories (all Trading inventory) Accounts receivable Cash & cash equivalents EQUITY AND LIABILITIES Equity Ordinary share capital Retained income Non-current liabilities Mortgage loan (12% p.a.) Current liabilities Accounts payable SARS (Company tax) Shareholders for dividends 2 444 000 2020 (R) 2019 (R) 2464 160 2 444 000 2464 160 356 000 336 000 120 000 250 000 40 000 64 000 196 000 2 820 160 11 2437 560 22 000 2 780 000 1980 000 1 760 000 2 180 000 257 560 220 000 200 000 600 000 200 000 600 000 182 600 200 000 98 000 138 000 8 600 76 000 2 820 160 6 000 56 000 2 780 000 Additional information The issue price of all the shares is R10 each. New shares were issued on the first day of the financial year. Interim and final dividends for the year ended 31 December 2020 amounted to R133 000. Fixed assets were sold at carrying (book) value during the year for R144 000. Fixed assets were also purchased