TUR LIMITED

1.1 Why was depreciation included in computing the cash flow from operating activities?

1.2 Calculate the cash balance on 31 December 2019 if there was a bank overdraft of R460 000 on 31 December 2020

1.3 Based on the cash flow information above, how does the company appear to be performing? Explain by referring to at least five items in the cash flow statement.

1.4 Long term loans were increased during 2020. Was this the most appropriate way of financing the purchase of assets?

1.5 What cash receipts increase cash but not profits?

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019 Cash flows from operating activities Profit before interest and tax Non-cash flow adjustments Add: Depreciation Profit before working capital changes Working capital changes Decrease in inventory Decrease in receivables Increase in payables Cash generated from operations Interest paid Dividends paid Company tax paid R 2 540 000 7 700 000 700 000 700 000 8400 000 690 000 180 000 310 000 200 000 9 090 000 (150 000) (4 900 000) (1 500 000) Cash flow from investing activities Land, buildings and equipment purchased 14200 000) 14200000 1 100 000 1 100 000 Cash flow from financing activities Increase in long-term borrowings Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year