THIS IS THE FULL INFORMATION THAT WAS PROVIDED FOR THE QUESTION BELOW

QUESTION

Use the information provided below to prepare the Cash Flow Statement of Harmony Limited for the year ended 31 December 2020. (20 Marks

INFORMATION

The information provided below was extracted from the accounting records of Harmony Limited on 31 December 2020

Harmony Limited

Extract of Statement of Comprehensive Income for the year ended 31 December 2020

	R
Sales	6 600 000
Cost of sales	(3 900 000)
Gross profit	2 700 000
Operating expenses	(1 710 000)
Selling and administrative expenses	1 260 000
Depreciation	450 000
Operating profit	990 000
Interest expense	(270 000)
Profit before tax	720 000
Company tax	(240 000)
Profit after tax	480 000

Extract of Statement of Changes in Equity for the year ended 31 December 2020

	Retained earnings
	R
Balance on 01 January 2020	1 500 000
Profit after tax	480 000
Dividends paid and proposed in 2020	(180 000)
Balance on 31 December 2020	1 800 000

Balances extracted from the Statement of Financial Position as at 31 December:

	2020	2019
	R	R
Plant and equipment	3 750 000	3 000 000
Investments	210 000	240 000
Inventories	1 290 000	1 230 000
Accounts receivable	1 140 000	1 050 000
Cash and cash equivalents	300 000	210 000
Ordinary share capital	1 860 000	1 860 000
Retained earnings	1 800 000	1 500 000
Long-term loan	360 000	210 000
Accounts payable	2 520 000	1 962 000
Dividends payable	120 000	150 000
Income tax payable	30 000	48 000

Note:

(a) Plant and equipment was purchased but there was no disposal.

(b) The number of ordinary shares in issue was 930 000.

(c) All purchases and sales of inventory were on credit.

(d) Credit terms to debtors are 30 days. Debtors took approximately 28 days to settle their accounts during 2019.